Free-ish Money For the Picking

Consider the following: The Institute for Partner Education & Development (IPED), the vendor training outfit owned by CMP Media, VARBusiness' parent company, estimates that there are $1 billion in MDF funds available in the industry each and every year. A recent survey of solution providers conducted by IPED's research affiliate, Channel Intelligence & Analysis (CIA), found that 25 percent of those dollars are unclaimed and go back into vendor coffers. That's a cool $250 million, or roughly $2.7 million for every solution-provider organization in the United States. I defy you to find a partner who wouldn't gladly accept that kind of cash.

So where's the disconnect? CIA's recent study found that one out of every two solution providers felt that marketing was "very important" to the future of their organizations, and 75 percent said they would like to increase their marketing activities. Coincidentally, when asked what they spend their MDFs on, nearly one-third of solution providers said marketing; from there, fewer than 10 percent cited training, and another 6.4 percent mentioned research. So if demand generation and expansion are top of mind, why not let the vendors foot the bill?

The problem should surprise no one working in our belt-tightened industry -- a lack of internal resources. In fact, solution providers responding to the CIA survey cited that as the single greatest impediment to leveraging available MDFs. Seems channel partners are too busy running their organizations to actually concentrate on growing their businesses.

What makes this a problem in search of a solution is that most vendors actually want their partners to spend their accruals. At least, that's what they tell us. Their motivation is surely not magnanimous. It's pure and simple economics. IT product vendors recognize that they have an existing investment in their partners, and that to support those solution providers in their growth is less costly than to identify, recruit and reinvest in new partners.

A solution to this dilemma has finally arrived -- Channel Marketing Services -- a new offering and another affiliate of IPED. Channel Marketing Services was launched to take all the work out of spending accrued MDFs. The start-up already has a client, though the customer's legal eagles won't allow Channel Marketing Services to use its name. Suffice it to say, the company is a Big 3 provider of systems, networking solutions and software. And the program was rolled out to the vendor's top partners at an event last month.

Why should this program work when the vendor's own efforts haven't? After all, Channel Marketing Services is offering a fairly typical menu of demand-generation activities, including seminars, direct mail templates, e-mail templates, and targeted customer lists, along with market research and access to industry-leading consultants who can help a solution provider solve his or her business challenges.

The secret sauce is that all the services are turnkey. Sure, the solution provider has to accrue the dollars and get the activity approved by the vendor. But after he works with an assigned program manager to define his goals, objectives and budget, everything else is handled by Channel Marketing Services. All the partner has to do is reap the rewards.

To the solution providers who saw the program, it makes all the sense in the world. And I'd be very interested in your view, so drop me an e-mail. After all, the program is really designed to help you get your entitlements, without the hassle.