Parnter Angst: Where's my MDF?

The marketing development fund (MDF) is an essential tool for supporting channel partners and driving lead generation activities. When used effectively, funding offers a boost for both parties to jointly generate net new business opportunities and leverage existing partner relationships

However, if you don’t fully get behind an activity – bearing in mind leads don’t often perform within the funded quarter - it makes it difficult to justify future funding. Of course, whether or not you get funding can also be outside your control.

Here’s 9 reasons why vendors may not allocate MDF to you and how to increase your chances in the future.

1. Performance concerns

One of the main reasons vendors don’t invest in partners is when they have concerns about past or current performance. If a partner hasn’t effectively utilised MDF in the past, or has a history of low returns on marketing investments, it’s not surprising vendors are hesitant to allocate additional funds.

2. Lack of strategic alignment

Vendors prioritise channel investment on partners with marketing strategies and objectives closely aligned with their own. If partner's don’t align marketing initiatives to a vendors positioning, don’t expect them to invest.

3. Limited marketing expertise

Many partners lack the marketing expertise or resources needed to create and execute effective marketing campaigns. Vendors will be nervous about investing in these partners as they’ll be unable to maximise the impact of marketing activities.

4. Financial constraints

Vendors often have budget limitations or financial constraints that prevent them from fully allocating their marketing development funds to partners, such as a need to spread the investment or focus it on specific strategic initiatives.

5. Risk management

Vendors use marketing development funds as an incentive to encourage partners to invest in marketing activities. By requiring a co-investment from partners, vendors ensure that partners have a vested interest in the success of any marketing initiative.  It's quite reasonable to expect both parties to have skin in the game to share the cost.

6. Focus on key partners

In some cases, vendors prioritise on key strategic partners who play a critical role in driving significant sales volumes or have a substantial market presence. This approach allows vendors to concentrate resources on partners with the greatest potential impact. If you don’t fall into the category, you’ll need to find an angle that does.

7. Incomplete or unclear proposals

Partners are often required to submit marketing plans or proposals to access MDF and if the proposal’s incomplete, lacks a clear strategy, or doesn’t demonstrate a strong potential for positive ROI, the vendor may choose not to fully fund the initiative.

8. Compliance and reporting requirements

Vendors may have strict compliance and reporting requirements for marketing development fund usage. If a partner fails to adhere to these guidelines or provides inadequate documentation of fund utilisation, the vendor may withhold further funding.

9. Market conditions and business priorities

Vendors may adjust their MDF allocations based on changing market conditions and their overall business priorities. Factors such as product launches, market expansion or shifts in competitive landscape may influence how vendors allocate their marketing funds.

Take your ideas to them!

Competition for funding across the board is fierce, especially in a climate of budget cuts. Make sure you’re a priority by taking them a co-fundable programme that offers them visibility and performance guarantees throughout.

We can even help you to put together your funding request that could make it more cost effective all round in a solution play where include more than one vendor selling complementary technologies.  You'll be onto a winner and all the heavy lifting will be done for you.

If you have any questions about this or on the subject of lead generation in general, we are happy to help!

Frequently Asked Questions