PRM Best Practices: Re-Thinking Marketing Development Funds

Updated March 22, 2023
Published in Channel Marketing Strategy, PRM (Partner Relationship Management)

Do you see marketing development funds (MDF) as a cost to control or a tool to be taken advantage of?  How you see it has direct bearing on how much success you’ll have.

An effective MDF program is not about control. It’s about measuring and building marketing strategy that works for your industry.

Create an MDF Program That’s Easy for Partners to Use
Vendors structure MDF as a “use it or lose it” proposition, which is not a terrible thing in itself – until they get overly precise about it. If the purpose of those funds is ultimately to sell more product, automatically cutting them off at the end of the year also cuts off partners’ ability to strategically plan around the utilization of those funds.

Partners usually have their own marketing budget and marketing plan and if you get too meticulous about controlling funds, you’re making it difficult for your partners to use them effectively.

Link Co-Op MDF to Deal Registration
MDF is a tool for strategically planning market penetration and that’s your metric for measuring success. But that also means you need to be able to measure penetration. The way to get partners on board with this is to present it this way: “If you want MDF dollars from us, we require that you register deals.”

This has three impacts:

  1. It can give you visibility into the deals.
  2. You can track the result. Was this deal a result of an MDF activity that we have in the system?
  3. Better than giving your partner a discount or check or monetary incentive that they can go do anything with, you’re doubling down on your marketing program so that they can generate even more business.

Measure ROI and Allocate Funds to Activities That Work

The money most companies allocate to MDF is a small price to pay for the results they could be getting.
The money most companies allocate to MDF is a small price to pay for the results they could be getting.

Trying to control how it’s spent is misdirected energy. What vendors do need control over is the activities they know will or will not work. They need control over the timing of spend, and that’s where the workflow comes in. That’s where having a tool like Channeltivity to streamline the MDF management comes in. You need to be able to measure the business.

ROI dictates which activity you want to do more of and which activities you’re going to do less of. Don’t waste resources and funds nickel-and-diming your partners, worrying about the expiration of stuff, calculating it monthly.

Instead, think about your partners. They’re running a business and can’t plan for an unknown amount of money every month. How can your MDF program give you the info you need while also helping them sell more?


Deal Registration Best Practices


Channel Management ROI