When It Comes To MDF, Waste Not Want Not

Every year, 25 percent of the $1 billion in MDF available to the channel goes unclaimed and is added back to the bottom lines of vendors and distributors, according to estimates from CMP Media. How does that make you feel? If you're frustrated but don't know what to do it about it, you're not alone.

Vendors and distributors don't like wasting that money because it indicates that their programs are not as valuable or complementary as they should be. Certainly they need to know if you're not finding value in their programs, but let's leave that challenge for 2005. Your immediate marching orders: Claim the MDF you have accrued in 2004 and save it from reabsorption on Jan. 1.

My non-scientific survey of more than a dozen solution providers, vendors and distributors in October indicates that roughly 75 percent of VARs will squander some MDF this year, simply because they don't know what they may have accrued. What an incredible waste!

I consulted for one leading VAR that successfully built a national event marketing strategy primarily on MDF. This company has a large in-house marketing team, however, and is able to dedicate staff to tracking MDF. Few partners can support the resources required to track MDF and create strategies to maximize the MDF use. That's when you need to rely on automated tools and resources provided by your vendor or distributor. Or at the very least, lean on your regional channel manager to find out what funds are available.

MDF exists to help build channel revenue, so most vendors are only interested in supporting initiatives that can directly drive sales. That means brochures, Web sites and other broad messages aren't likely to be covered. Vendors are more likely to fund programs with maximum revenue potential.

Through my experience with organizations on all sides of the channel, I've developed a list of marketing initiatives that you could execute this year to optimize your MDF opportunity.

Awareness: Print, e-mail and telemarketing campaigns that target a specific market with a clear message are the best way to spend 2004 funds and deliver the greatest chance for reimbursement. The campaigns could help you kick off 2005 with a bang.

Briefs: Reports showing executives the business-level benefits of a technology solution are valuable—and more likely to be read. Remember, be long on vision and short on spin.

Communications: The newsletter is a valuable component of an integrated marketing strategy. Successful customer newsletters open up a specific computing topic for a wide audience and help customers realize the depth of your solution set. Consider shorter, targeted communications back to your vendors and distributors. These reverse channel briefs go a long way toward building relationships.

By the way, vendors and distributors seem perfectly willing to work with partners who still have MDF available and want to spend it this year. In the words of one availability management software channel manager, "I love to help our partners spend free money!"

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