Best Practices Articles

Leveraging Unutilized Market Development Funds (MDF) to Drive Partner Marketing

Leveraging Unutilized Market Development Funds (MDF) to Drive Partner Marketing

“Use the money you already have.” Are you familiar with this age-old piece of advice? The common rejoinder, of course, is that you have no funds left. But are you sure? Have you looked at your overall marketing scope and activities? Have you utilized all available market development funds (MDF) or co-op dollars? In our experience, when organizations sit down and take a close, detailed look at their finances, nearly 9 times out of 10 they discover leftover or unused partner marketing funds.

Most organizations selling through the channel allocate top 1% to 2% of their revenue—referred to as contra-revenue—to market development funds (MDF) or co-op funds. Surprisingly, most channel companies discover that the amount allocated to channel marketing funds is equal to or more than the amount allocated to corporate team members. Typically, those channel marketing funds cannot be used for direct marketing. They can be used either by a distributor for partner recruitment, training, enablement and demand generation, or by a channel partner for end-user for activities like demand generation and training.

Now, the reality is that in most cases these market development funds (MDF) are not allocated at a corporate level; instead, they tend to be managed by the regions. However, in almost every case—with proper coordination by corporate sponsorship—significant value can be provided to the regions by rolling up channel marketing funds and driving global initiatives that are relevant for the region. In this scenario, the region does not give up control of their funds, and from a financial perspective the market development funds (MDF) show up in their regional or country-level financial books. However, if corporate teams lay out programs that can be easily comprehended and used and delivered within a region—i.e., if they embrace a point, click and release methodology—funds can be allocated to global programs that can drive regional- or country-level impact.

If you are trying to roll out channel programs by leveraging market development funds (MDF) globally, then you will need to find a channel marketing agency that can help you do this in multiple markets. To be successful, this agency will have to be able to accept payments in various currencies and comply with various tax jurisdictions. The agency will also need to have legal standing and be able to satisfy all necessary contractual requirements.

ZINFI is uniquely positioned with its global channel marketing automation and service delivery infrastructure based on 11 legal entities around the world supporting 26 languages, enabling customers like you to plan globally but act locally by properly deploying your unused channel marketing funds.

ZINFI has experts at a global, regional and corporate level who can discuss with you how to put together programs that you can fund via distributors or local resellers by using your unutilized or underutilized market development funds (MDF) and generate demand via partner recruitment, training and multi-partner demand generation.

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