It is estimated that over $10 billion dollars are spent every year on Market Development Funds (MDF), Cooperative Funds (Coop), or Business Development Funds (BDF) to support the marketing and growth efforts for partners and resellers in the indirect channel industry. All channel executives agree that the ROI on these funds is not nearly what it should be and the measurement and management of these programs need to dramatically improve. The problem starts with a poorly designed end-to-end process for requesting funds, forecasting marketing outcomes, approving programs, and tracking and measuring program ROI.
Channel executives need to assess their MDF management processes to figure out where they need to improve in order to generate better return on their investment. There are four key steps in any high performance MDF management and measurement process.
Each step needs to be designed to help guide the participant on how to generate better outcomes:
- Partner MDF Request Process: Must be designed to help guide the partner with the selection of tactics, estimate the sales leads, and estimate revenue to be generated from each marketing activity.
- MDF Review & Approval Process: Must provide channel executives with a ranked set of ROI estimates for each partner MDF request to help them prioritize which partner programs to invest in and which ones to reject.
- Marketing Program Execution: Partners and marketing vendors that manage the execution of the programs need to focus on achieving the goals that were approved for this plan.
- Marketing ROI Dashboard: This MDF dashboard system must show the actual outcomes from each investment to effectively measure performance.
Each step in a best practice MDF management process has to be setup with the user in mind to guide them through a more successful process.
There are a lot of steps to navigate within the end-to-end MDF management and measurement process. Use the assessment below to objectively evaluate where the biggest gaps are in your current MDF management system.
Each of these 27 dimensions above are important parts of a successful MDF management process. Below is a sample assessment of an MDF process from a fictitious company called RapidTech to help guide your own evaluation.
The first step is the attempt to find potential gaps in your MDF and partner marketing management processes. The gaps identified above for “RapidTech” are due to lack of user focus on the design of each step. For example, in the “Partner MDF Request Process” the partner is not provided pre-packaged marketing programs organized around priority “sales plays” for a partner to execute. Additionally, the partner is not provided an automatic calculator and simulator to model the leads, revenue, and ROI to be generated from different marketing plan scenarios and how these values shift with changes in the marketing plans.
Improvements to most MDF processes usually help make it easier to use and show the partner how improved marketing programs can generate higher ROI. After you assess your MDF program on these 27 dimensions, you can implement changes for achieving greater partner satisfaction, greater partner marketing performance, and greater MDF ROI for all of your channel marketing investments.