Marketing Development Funds (MDF) & CO-OP – possibly two of the most misunderstood and misused sales incentive and enablement tools around. Instead of using an MDF and CO-OP program as a strategic marketing and sales resource, too many vendors still look at it as little more than a cost of doing business – with reimbursements for a golf game here, a coffee mug there. Measurable ROI is nowhere to be found.
If designed and executed effectively, MDF/Co-Op is a stellar tool to use to boost channel sales and drive real, behavioral change. However, if misunderstood and poorly executed, this valuable resource can be squandered – resulting in a variety of pain points for both vendors and partners - the most significant being the difficulty tracking ROI and spending accountability.
In this blog, we discuss how to truly optimize MDF/Co-Op efforts in the post-COVID era of digital transformation:
Mining ROI from effective MDF/Co-Op Execution
Channel leaders should rethink how they approach their MDF/Co-Op programs to align with other incentive programs that are about influencing behaviors, which lead to more sales. Understanding those behaviors and then allowing you to track the impact on those behaviors will provide the basis of MDF/Co-op accountability, program objectives and the KPIs. Properly designed, the attainment of the KPIs will define program effectiveness and provide the ROI marketers’ are looking for.
The outcomes of said MDF objectives won’t be fully realized unless they align with your go-to-market plans (that are packaged to be mutually beneficial to you and your partners). Ensure that MDF is used to promote new products or solutions, as well as to help penetrate new geographic or vertical markets for competitive displacement and net new business and accounts. Ideally your MDF/C-op program should be an extension of your own go-to-market goals.
For example, if you’re onboarding a new partner, a “Jumpstart Fund” is an excellent way to align your objectives to shorten the time to initial sale with your go-to-market strategy. Plus, these types of MDF programs offer real-time sales metrics you can use to see how well the programs are going.
On the flip side, if you’ve been working with a partner for a while and they’re not optimizing sales of your product or their opportunity close ratios are not where they should be, a Sales Enablement MDF campaign can work wonders. You know the program is working based on your aligned metrics: if the average deal size is going up and the close ratio is also going up, then you know the enablement efforts is paying off.
Automation and Digital MDF in a Post-COVID World
In a recent 2112 Group Report, 51% of channel professionals rated MDF as the most effective means of influencing partner behavior and performance. That perception isn’t changing amid COVID-19 disruptions. What is changing is the shift from events and certification, to using those funds to initiate long-term behavioral modification campaigns around sales and marketing enablement, as well as short-term digital marketing and training support.
MDF can create significant ROI for organizations and their partners, but automating the process is key. Yet more than half of B2B and B2C organizations are still using spreadsheets to manage their MDF and CO-OP programs.
Covid was a trigger for many progressive to focus MDF spending away from events and SWAG and redirect them to accelerate digital transformation efforts with the time and existing budgets that are available from non-existent events, golf outings, trade shows and dinners. Channel leaders have the unprecedented opportunity to invest in and improve channel automation systems, including sales incentive platforms, partner portals, digital training programs and Through-Channel Marketing (TCMA). The fact is, digitizing and automating key processes cut costs, while also increasing valuable program, partner and consumer insights. That’s a win-win.
Sales Enablement Across Verticals
Engagement best practices have evolved over the past year. Building a plan and a program to drive partner engagement, and then understanding how to reward correctly for participation in sales and marketing enablement has become the standard. Progressive marketers’ understand the advantage of tailoring their programs to the needs of varying channel segments or geographies—aligning the programs to the varying go-to-market models of their indirect channels. It’s all about driving demand and preparing to sell well at every stage of the customer buying cycle. Strategic and purposeful MDF/Co-Op programs provide the enablement boost partners need.
These critical enablement efforts are happening across a wide-variety of industries and verticals – not just tech sales as traditionally thought. From HVAC to Auto, channel leaders are having conversations about how to make the most of available MDF and CO-OP funds by making Demand Generation easier for their partners with TCMA (Through Channel Marketing Automation). Channel leaders are looking to understand how they can effectively leverage Incentives and Rewards to drive behavior modification that leads to higher engagement in all automation platforms.
In conclusion, MDF/Co-Op is a versatile and adaptable incentive tool that has evolved over the last few years. As in-person events and outings have decreased in frequency, today’s progressive channel leaders have evolved too – leveraging MDF/Co-Op to influence behavior, increase sales intelligence and drive strategic sales growth. From lead generation to close of sale, making long-term investments in your partners’ needs and their specific strength is mutually beneficial. Automating that process to create greater ROI is today’s modern MDF/Co-Op standard.
To discover how 360insights can help you with your journey of understanding how to measure the ROI of MDF /Co-Op utilizing The Channel Success Platform, simply get in touch and request a demonstration.
