3 Marketing Development Funds Best Practices That Work

Updated February 16, 2024
Published in Channel Marketing Strategy, PRM (Partner Relationship Management)

If you’re looking for marketing development funds best practices, the first question to ask is whether you see 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.

MDF is one of the most discounted, yet valuable parts of a partner program. An effective MDF program is not about control. It’s about measuring and building channel marketing strategy that works for your industry.

Best Practice #1: 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.

This brings us to the first best practice of making your marketing development funds program easy:

  • Simple, clear rules that make sense and don’t create an undue burden on your partners or channel team.
  • MDF approval and fund expiration rules that facilitate good and effective channel co-marketing.
  • An easy, accessible online partner portal that supports your marketing development fund workflows and includes the features to drive results.

Best Practice #2: 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.”

Linking MDF to deal registrations 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.

The best practice of linking MDF to deal registration strengthens your overall channel program by providing benefits all around.

Best Practice #3: 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 MDF is 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 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? Giving partners a reasonable amount of freedom while tracking results is the final best practice in running an MDF program that works.


Deal Registration Best Practices


Channel Management ROI