November 18, 2022

MDF programs: four common challenges for IT vendors

B2B marketing, IT channel marketing, MDF, Strategy, Vendor marketing

Length: 8-minute read.

Quick Summary: Marketing development funds are often misunderstood and face challenges in engagement. This article looks at the benefits of MDF programs and how overcoming these challenges can strengthen the vendor-partner relationship to support growth across your business.


MDF programs provide significant benefits, yet several challenges can stand in the way of success

Market development funds (MDF) can form a key part of the business strategy for organisations that operate, at least in part, within the IT channel ecosystem. MDF programs provide a great opportunity to promote vendor and channel businesses while strengthening their business relationships. Organisations can increase both market share and revenue by working collaboratively.

MDF programs can lead to significant benefits for vendors and partners alike. However, to be successful, both parties need to understand these benefits and work together. This is the key to taking full advantage of what is effectively a great marketing opportunity.

What is an MDF program?

An MDF program is a marketing program that is developed and either partially or wholly funded by a vendor to support its channel partners in growing their sales.

Vendors provide funding as an incentive for partners to access optimised marketing activities aimed solely at promoting their products. By supporting their partners in growing their sales, vendors can strengthen their relationships with these partners, as well as ensure their own success.

Some examples of MDF programs include:

  • lead generation

MDF programs must be mutually beneficial to vendors and channel partners and should be treated as an extension of the business. When developing a vendor marketing fund program, the process for implementation must incorporate the following:

  • defined funding structure
  • alignment on marketing goals
  • a budget
  • qualification process for partner approval
  • investments and return on investment (ROI) tracking
  • funnels to help process payouts.

What are the benefits of MDF marketing?

While MDF programs can be structured in different ways, they often result in similar benefits.

Some of the major benefits that MDF programs to include:

  • lead generation and increased revenue and business opportunities
  • targeted campaign opportunities that let vendors and partners reach more potential buyers together
  • stronger partnerships between vendors and partners for the companies’ mutual benefit.

In addition to the above, MDF programs also create a competitive advantage, generate quantifiable returns, and enhance channel partner marketing capabilities.

Despite the benefits, some vendors and their channel partners may experience challenges around engaging with MDF programs. A lack of education and awareness around available funding can be a major contributing factor as can the lack of time and resources available for partners to invest in MDF programs.

Fortunately, it is possible to overcome these challenges and deliver successful MDF programs for both vendors and their partners.

MDF program obstacles faced by vendors

There are four common challenges that vendors may experience when engaging in MDF programs:

1. Lack of awareness

One of the biggest challenges that you will need to overcome when starting an MDF journey is a lack of awareness and potential miscommunication with partners. Your partners may not understand what a marketing development fund or MDF program is, what its benefits are, or that there are even funds available that they’re eligible for.

2. Unclear messaging

Some partners may be hesitant to engage with MDF programs over concerns they’ll need to lead with vendor messaging in their marketing collateral, which may not align with their business objectives or how they want to be perceived in the market.

3. Under-resourcing

Even when your partners are aware of and eligible for MDF programs, they may lack the resources they need to participate. Regardless of size, even partners with dedicated marketing teams often find this challenging.

4. Lack of support

MDF programs can fail over perceived a lack of support between the vendor and partner. For example, vendors may perceive MDF programs to be time-intensive and require handholding for their partners to develop lead generation programs and content.

Overcoming the challenges of implementing MDF programs

MDF programs are meaningful resources in accelerating a channel partner’s sales and marketing efforts; however, it’s not uncommon for challenges to occur and impede the success of the program.

Here are some ways to overcome the challenges listed above:

  • Communicate regularly with clear and simple program objectives

To avoid unused MDF funds, regular communication between the vendor and the channel partner is essential. Maintaining ongoing engagement with channel partners can ensure they retain relevant information and grow more familiar with the MDF program process. Doing so will mutually benefit both businesses in the long term.

  • Develop a detailed campaign plan

The more unclear they are on the benefits and mechanics of MDF, the more partners will be hesitant to engage with MDF programs. Developing a detailed campaign plan for the MDF usage, the campaign purpose, target audiences, and monitoring metrics will give your partners assurance that the program aligns with their objectives and is related to the products and services relevant to them.

  • Offer continuous support to your eligible channel partners 

Vendors should support their channel partners to implement MDF programs to reach new audiences or gain a greater share of wallet with existing audiences; however, the support shouldn’t stop there. Continuous support to your eligible channel partners will lead to stronger partnerships and better outcomes.

As you begin to frequently run successful marketing development fund programs, you’ll be able to learn from the mistakes that were made previously to improve future programs.

 Reap the benefits your MDF programs sow

Accessing marketing development funds and building MDF programs can be complex, involving lots of moving parts and stakeholders. Many vendors and partners need some added IT channel marketing support to achieve maximum success with their MDF programs.

Engaging the services of a third-party provider like Outsource to support channel partners with dedicated marketing support services can help to significantly streamline the MDF marketing process and boost outcomes.

For more information on how to solve these challenges and better leverage MDF programs for greater success and business growth opportunities, read our whitepaper. And, to find out how we can help you streamline your MDF programs, click the button below to contact the Outsource team today.


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