Recently we were asked to review the MDF program for a vendor who was concerned that they were not getting the best return for their marketing dollars.
Part of the brief was to look at ideas that were “outside the box”, but could still be implemented rapidly across multiple regions. In addition, any solution had to be able to be measured sufficiently at senior executive level, as well as at a field or line manager level, because they felt that part of the problem was the current program had an internal disconnect of objectives.
In order to understand how we went about solving this issue, it is worth firstly taking a moment to review some of the general MDF programs issues that we have observed over the years (and this vendor was no exception to many of these).
- MDF often remains unspent resulting in under utilised or funds lost from the financial period, which starts the process of some people questioning the value of MDF
- Goal misalignment i.e. vendor vs partner objectives often don’t align leading to a potential standoff, animosity or poorly executed program that just misses the mark
- Administrative overhead by both partner and vendor required to manage the program efficiently. Sometimes the overheads or cost gets too great for partners to want to engage
- MDF is often too small compared with other channel initiatives or rewards such as deal registration, stretch rebates etc thereby gaining limited channel engagement/buy in
- Quarterly spend & activity requirements of a lot of vendors where everything related to a MDF campaign has to neatly fit into a quarter can stifle innovation for campaigns that need more time (or money) to gain the desired result
- Limited partner marketing capabilities. It is often difficult for partners to execute activities that align or drive desired results as they don’t have the required skills or the resources
- Program rules abused by channel, often because they either do not understand or the rules are so complex the partner will look for ways around the rules can end up with funds wasted or potential collateral damage to vendor brand or program
- ROI often not able to be easily quantified. Senior executives want hard numbers, but at a partner level often they are just happy that the campaign or activity has been completed.
Some of the ideas we came up with to solve the above problems were different from the rules around the majority of MDF programs we see, but not that difficult to implement as most did not require significant investment, just a commitment to change and improve.
Here are three of the main ideas that can be applied to most vendor MDF programs:
- Instead of having quarterly goals for the MDF program have 12 months overall goals, but if required break down into quarterly reports with KPIs to satisfy management, accounting or compliance requirements. Partner MDF activity needs to be aligned and complement with the overall corporate marketing plan and activities. Therefore with key partners where a vendor conducts business planning process the vendor goals and partner activities should align and complement each other to create a synergistic message to the targeted customer. The end result should be more creative and well thought through activities where MDF spend is far more likely to generate a positive return.
- Automate as much as possible. Every time a person has to do something manually it adds time, cost and potentially complexity or errors. There are numerous in house server based or cloud based applications available today that can log, track and report on the key processes and metrics required to manage and maintain a productive MDF system.
- Communicate regularly clear and simple program objectives, criteria, eligibility, payment mechanisms, and performance metrics that partners can understand, use examples and reward excellence. If the partners can clearly understand what the rules are, and have relevant examples that they can reference, they are more likely to be able to replicate to their customer base. Finally if a partner does a great campaign, recognise their effort appropriately.
Many vendor MDF programs we see have become stale, rigid and complex resulting in partners that are either not taking advantage of the funds available to firstly and fore mostly help promote their own business, as well as the vendors product, or funds are being spent in a reckless manner damaging both brands and reputations in the process.
Take the time to review the existing rules and outcomes of the MDF program you are running as a vendor or participating in as a partner and challenge the status quo to deliver a better outcome for all.