Channel Business How-To

How to get the most out of market development funds

By Yuval Shavit, Features Writer

Good marketing is an important part of running a business, but constantly running campaigns can strain your budget. Many vendors offer market development funds (MDF), but getting the most out of them isn't always easy. MDF allows you run a marketing campaign on your vendor's dime, so you need to be political about how you spend the money. In this article, we'll show you how to secure MDF and use the funds as effectively as possible.

Every vendor's partner program is different, but many offer some money -- known as cooperative marketing dollars -- based on a percentage of your revenue. Higher partner levels may offer better percentages, depending on the vendor, but it's often not negotiable. If you have a specific campaign or event in mind, though, your local channel manager may be able to get additional market development funds to help pay for it.

Vendors look for partners who are willing to work hard to get new clients, so it's important to demonstrate that you put effort into selling your vendor's products, said Marc R. Potter, senior vice president of business development at Marvin Huffaker Consulting Inc. in Chandler, Ariz. You should be prepared to work on your own before you can expect your vendor to help out with MDF, Potter said. But if you show effort, vendors will usually start supporting you even if your work hasn't paid off yet, he said -- once you start hitting your goals, they'll step up their support.

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It's easiest to get additional market development funds if the campaign you're planning aligns with the vendor's marketing strategy, said Paul Franco, executive vice president at Zibiz Data Management, a storage consultancy in Ronkonkoma, N.Y. Regardless of how you develop your marketing campaign in general, you should approach the vendor with a specific plan for the MDF you're requesting. Be prepared to show the plan's value and how it will help the vendor. If you can demonstrate a good ROI from previous campaigns, that's even better, Franco said.

Using your market development funds effectively

Aside from providing leads and mailing lists, vendors can help you by either giving you money or giving you access to their marketing resources. For instance, a vendor may provide prepackaged HTML and bulk mailers for a direct-mail campaign, or the resources to put together a webinar, Potter said.

Vendors often get most excited about events or seminars, so keep an eye out for any in your area. A vendor will often help pay for your space at a meeting or travel costs, and some will provide equipment for your booth. It comes down to effort again, Potter said. If you send some of your engineers to talk to potential clients face to face, a vendor is more likely to provide MDF for the event.

It's common practice to share your slides with your vendor before an event, Potter said. The message you want to get across may be different from the message the vendor is pitching, and sharing slides lets you resolve potential problems ahead of time. Make sure the presentation doesn't sound too much like a sales pitch, or customers will be turned away. Focus more on the technology and the problems it solves. Vendors may threaten to pull market development funds if a presentation doesn't have enough of a sales focus, but they may also pull out if it's so sales-oriented that people won't listen, Potter said.

You should also agree on how you're going to divide leads the event generates. Larger vendors may be harder to work with, Franco said. Those vendors often have a more developed direct sales team, but if you ask them to focus just on the largest customers, they'll often respect that, he said.

Working with multiple vendors

It's easiest to get market development funds from several vendors for the same event if those vendors complement one another, but that's not always possible. For instance, server virtualization often requires advanced storage, like a SAN, so a virtualization vendor and storage vendor may be amenable to funding an event together. You can work this to your advantage if one vendor has an especially hot technology; other vendors will be eager to tap into the potential clients it will draw in, Franco said.

If you can't avoid vendor competition, try differentiating between vendors' products. For instance, one company may focus more on production storage while another is primarily a backup storage vendor. Although their products will probably have some overlap, vendors will often understand if you explain that you'll be emphasizing different aspects of each vendor's line, Franco said. Of course, there are cases when two vendors are serious competitors, and there's no easy way to separate them. In those cases, you may be better off talking on a product-agnostic level and not requesting market development funds at all, Potter said.

It's important to remember that even with a vendor's market development funds, a marketing campaign is going to take a significant amount of work on your part, Franco said. MDF is a great way to pay for marketing campaigns, but they shouldn't be an excuse to get one going.


This was first published in May 2008

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