If you are a manufacturer that has devoted a portion of your marketing budget to an MDF program for your channel partners, you understand the difficulty in making this program a success. Some partners see MDF funds as nothing more than a way to improve the bottom line. Others are much more effective at putting these funds to use to increase opportunities and close more business.
Whether it’s because MDF is seen as “free money” or because they just don’t plan ahead, some of your partners may not be giving you the most bang for your MDF buck.
Without channel management best practices in places, you can’t hope to get very far with those companies that are supposed to be bringing in extra revenue and building a market for your products.
While there is no one set of channel management best practices, there are definitely some tenets every business in every industry should follow. This includes constantly reviewing how your channels are performing and to what degree that success can be tied to your MDF program. This requires having specific goals and objectives and holding your partners accountable as part of the process.
With PRM (Partner Relationship Management) software, you’ll have a much easier time not just monitoring your channels, but also contacting them effectively through the programs you offer.
If you don’t already have channel management best practices in place, now is definitely the time to do so.
According to the Pareto Principle, you get about 80% of your results from just 20% of your actions. That means you should start by knowing where each partner stands in terms of sales effectiveness and create parameters to receiving MDF funds that are tied into actual sales results. In order to do so, you will need to know not only which partners are using the MDF you have allocated, but what new business opportunities they derived from those funds.
This isn’t to say you should ignore the other 80% of your channels or even necessarily deny them their MDF funds, but make sure that you have ways to measure the use of those funds more effectively.
Send product managers, engineers and members of your sales team to conduct joint sales calls with your partners to get a feel for their customer base and what opportunities exist within their market. The problem could simply be that they’ve missed important benefits your products can provide or advantages they offer. Or, you may have specific marketing materials and strategies that are a better fit for their customer base than what they have been using.. Either way, you’ll have a much better idea by paying them a visit (this will also ensure they understand that MDF isn’t guaranteed to them) and that you are taking an active interest in their success.
On the other side of the coin, it’s definitely worth spending time with your partners that are successful and find out what they’re doing right. You’ll learn plenty by asking them for honest feedback about how they think you could improve as a vendor. It might be that they have some excellent suggestions for your channel management best practices or important customer feedback that can help you improve your support strategies.
If you have too many partners to meet with, pick the ones that bring you the most profits and the ones that are the fastest growing. These will serve as the foundation for a strong channel program.
The important thing about getting more return from your MDF funds is that you think a bit outside the box. Not all your channels will benefit from the same amount right now. Think about how the money you have available could be spent to help them improve as a partner and maybe next year they’ll be in a better place to use MDF funds for their own sales.