Intelligent Tech Channels Issue 57 | Page 24


Part of the Lynchpin Media team , Manda Banda has more than 20 years of experience working for channel publications . He shares the knowledge he has learnt during that time in this monthly column for Intelligent Tech Channels .

The challenges with market development funds

Manda Banda , Managing Editor , Intelligent Tech Channels
Manda Banda is also Lynchpin Media ’ s Managing Editor of Intelligent CIO Middle East and Intelligent CIO Africa magazines .
Market development funds ( MDF ) have long been used to help channel partners by vendors with promoting their products , solutions and services . But like most good initiatives , MDF is subject to some level of abuse and challenges if it ’ s not properly managed . So , what challenges do channel managers face when it comes to MDF management ?

Market development funds or MDF as they commonly known in the channel are used in indirect sales channels whereby funds are made available by IT vendors to help channel partners ( resellers , VARs , solution providers , systems integrators and distributors ) sell its products by contributing to marketing materials and other related activities .

MDF , like most good things , is subject to some level of abuse and challenges . Channel managers know they need to provide partners with some level of marketing assistance as partners have limited marketing resources or none at all . Of their available budget , partners allocate most to either hiring new staff in sales or technical fields . Consequently , most channel partners have very little in the way of marketing expertise or budget for such activities . The average channel partner across the Middle East and Africa too often typically views marketing as , at best , a sales support function .
No direct correlation
When marketing gets treated as little more than a sales addition , the more limited the return on those investments become . There might be some value to be gained from a sales event involving , for example ,
contracting a music or sports legend to appear at a customer event . But usually , there ’ s no direct correlation between those events and increased revenue for a vendor . End customers may view the channel partner that funded the event more warmly . But the odds are low they will sign a contract just because they got to shake hands with a sports or music personality .
Today , most sophisticated channel firms are now looking to maximise investment in market development funds in a
As marketing increasingly becomes a science , marketing professionals are being held accountable for the return on every penny spent . programmatic way that goes well beyond a one-time sales event . To push channel partners in that direction , savvy channel managers are more aggressively measuring the results of any given marketing effort a channel manager makes .
Channel managers are now making concrete recommendations relative to what types of marketing programmes they are willing to fund . These recommendations are based on data they can now collect concerning how useful different types of marketing initiatives are .
The challenge
The challenge channel managers face is in dynamically allocating limited marketing budgets across those activities . As marketing increasingly becomes a science , marketing professionals are being held accountable for the return on every penny spent . The wild spending days like at the peak of the IT channel business in the mid 1990s and 2000s in the regional are long over . Decisions on where to allocate marketing funds are being made in near real-time , based on data generated within marketing automation systems . As a logical extension of those systems , most vendors nowadays are working with strategic media houses and demand generation platforms across the region to provide channel managers with both the data demanded by corporate marketers to justify allocations as well as the actionable insights required to optimise the distribution of marketing funds across a range of classes and partner
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