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Written by Lisa Shepherd
on July 03, 2018

VAR and Channel Partner Image

The importance of channel partners is growing for technology OEMs. Over 70% of tech sales will come through channel partners this year1. To support their channel partners, tech vendors allocate billions of dollars to co-op advertising and MDF (Market Development Funds) every year.

But there is a lurking problem for both OEMs and their partners: nearly half of the MDF and co-op advertising funds go unspent every year.2

With billions at hand to generate demand, nurture leads and grow relationships, why are channel partners not making the most of the MDF and co-op advertising funds available to them?

There are a few reasons.

 1. Lack of awareness about MDF and co-op advertising programs

In a recent survey, over half of channel partners were unaware that they even had access to MDF and co-op funds.3  Despite the size and importance of these programs, there’s a gap in how well they are promoted and understood in the channel. 

2.  Limited in-house digital marketing skills 

OEMs are increasingly moving towards digital marketing. Unfortunately, these skills are rare within VARs and MSPs, particularly the smaller companies. Because they don’t have easy access to the skills necessary to fulfill the requirements of MDF programs, resellers miss out.

 3.  Complexity of programs and requirements

Co-op and MDF programs have a reputation for complex requirements and approval processes. At the same time, vendor programs are all different and managing several programs means staying on top of changes. This is challenging for both the OEMs, to constantly communicate about updates, and for channel partners to receive, digest and act on the changes.

How VARs and MSPs can narrow the gap between channel marketing funds available, and funds deployed

When partner marketing funds go unused, it’s a problem for OEMs. They need their channel partners to be successful in order for their own revenues to grow. And when resellers don’t make use of available MDF and co-op dollars, it’s a missed opportunity for those businesses.

Here are two steps that VARs and MSPs (and all channel partners) can take to narrow the gap:

1.  Commit to building knowledge about channel marketing funds.

Awareness of MDF programs is a problem, but it isn’t one that OEMs are (likely) going to solve for their partners. VARs and MSPs will have to do the work to understand their vendors’ MDF programs.

The good news is that once a company has successfully navigated a vendor’s program, it’s much easier to keep using the program. As well, because this is a gap across all resellers, it’s an opportunity for resellers who dedicate the resources to accessing funds to gain an advantage in their field – because their competitors likely aren’t.

 

2.  Get the skills and tools to make use of MDF and co-op marketing funds.

MDF programs are increasingly digital-marketing focused. If the skills for implementing digital marketing programs don’t reside within your company, find other ways to obtain them. Options for obtaining the skills include outsourcing partners who are savvy about channel marketing, and freelancers.

Since this is a road block for many channel partners, the companies who solve their limited digital marketing skills will open the door to more funding (and better sales and marketing) than their competitors. Even if it isn’t for an MDF program, your company will need these skills sooner rather than later, so now is a great time to start.

There’s a $25 billion opportunity for channel partners who want to make better use of the MDF available to them. And bridging this gap means they’ll be making their own businesses more successful, as well as supporting the growth of their vendor partners. It’s a clear win-win proposition.

 

1.  Salesforce

2.  Wikipedia

3.  ChannelAssist

 

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