Market development funds (MDFs) and Co-op funds are a vital component of the modern business’s marketing toolkit, especially for companies looking to streamline and grow their channel.
They can also be a major headache if you’re trying to manage them in-house—with everything they take to handle, some businesses consider them not worth the trouble. That can be especially true for smaller businesses who don’t have the headcount to leverage their market funds management process to be competitive.
That’s unfortunate, because they’re one of the most useful, versatile ways to both nurture channel partner relationships and drive sales.
Basically, MDF/Co-ops are a solution for co-marketing with your reseller partners—your business provides funds for marketing activities that partners use to promote your brand. Everybody wins with a market fund, and we mean that: according to Forrester, high-performing businesses invested 23% more in market funds than low-performers did.
So, how do you reap the benefits of an MDF/Co-op fund without getting bogged down in the administrative tasks that can waste time and people power?
In this article, we’ll cover a few of the major pain points businesses typically have when it comes to MDF/Co-ops, and what to do about them.
Headache #1: Lagging Approval Times
When it comes to marketing, timing is everything. Maybe you have a new product line to promote, or maybe there’s a holiday or other event coming up and you’d like to seize the moment with some special marketing activities. Whatever the case, if your approval workflow isn’t streamlined, it can cause things to grind to a standstill and you might miss out on that timely opportunity for both you and your channel partner.
The solution:
It’s vital to make sure your market fund is being operated through a system that’s intuitive, automatable, and responsive. While managing your funds in-house can seem like the simplest solution, operating through a fund management platform can help your team run things way more efficiently, ensuring that you’re not missing out on any key marketing opportunities.
For example, a fund management platform can help you:
Headache #2: Ensuring Brand Compliance
MDF/Co-op programs, and other pricing programs, are regulated by the Federal Trade Commission to ensure that businesses aren’t using them to violate anti-trust laws. If you’re trying to manage an MDF or Co-op yourself, there’s often a lot of legal jargon to wade through and compliance hold-ups that are time consuming at best and legal liabilities at worst. You’ll also need to loop in your legal team and keep them up-to-date on compliance regulations, which can lead to even more hang-ups if your inter-team communication isn’t streamlined.
The solution:
That means from the outset you’ll want to operate your fund management program with communication across all involved parties within your company. If your legal and financial experts aren’t on the same page as your program managers from jump, it’s going to create some major problems down the road. Outsourcing your fund management to a third-party platform also ensures that the legal admin work will be taken care of by seasoned experts who are used to navigating MDF/Co-op compliance.
This includes:
Headache #3: Slow payout processes
MDF/Co-op programs are great, but there’s no point in running them if your channel partners don’t use them. And if your program doesn’t have an easy, smooth and fast reimbursement process, your partners will be far less inclined to do so. To get your partners on board with and committed to using your market fund program, you’ll want to eliminate as many barriers to a fast and easy payout as possible.
The solution:
A platform that allows for a seamless experience for your channel partners from approval to payout is your key to a successful market fund. That’s especially important if you’re working across multiple countries, as a platform enables you to:
Conclusion
The idea of starting an MDF or Co-op program can seem overwhelming if you don’t have the headcount or experience it takes to run one, and trying to manage it yourself can quickly get out of hand. These programs can be great opportunities for growing sales and building business relationships, but they come with challenges. Missing out on marketing opportunities due to a slow approval process, navigating the uncertain waters of compliance, and trying to make your payout system user-friendly can feel like major barriers to success here.
Fortunately, there are easy workarounds. Outsourcing the work of fund management to a third-party platform like 360 Insights is a great way of lightening the administrative load they can carry.
Got questions about how a third-party fund management platform can ease your administrative headaches? Talk to a 360insights team member today!