MDF is the one that is least utilized. This can happen because it requires tight coordination with the Partner Sales representative, Field Marketing Representative and a plan that must include expected outcomes not just in terms of marketing yields (milestone events at points in time) but in terms of prospective and real dollars.
This presents a path that few resellers and Partner sales reps want to go down. It means that any dollars spent in MDF will require a series of people to report back on results. It means more corporate engagement – and in the end, judgements about the value of the program or worse, the partner themselves. We all know that sometimes it’s best to not get the spotlight shined upon us. We all know that at the next QBR with that OEM the question will be asked:
“What results did we get from the MDF Funds we gave you?”
The wrong answer always is: “We received over XX deliverables that we are still working.” This is probably the more honest answer as many forget that the first sale to a net new customer in a complex and expensive (for the customer) sale generally takes more time than the quarterly revenue goal expectations can handle.
The answer that is more palatable always is: “We closed $XXX,XXX in sales. We have $X,XXX,XXX in pipeline. We are forecasting to close $XXX,XXX of that within the next XX or XXX days.”
The more palatable answer is the only answer that most want to hear. Yet, this answer sometimes displays an incredible ignorance of the net new sales process; expectation management; and an overall lack of understanding of what it takes to get a new pipeline of prospects for sophisticated products/services closed. (This will be the subject of a follow-on blog)
How to get around this conundrum? I don’t have a great answer for that. No VP of Sales from an OEM wants to report back that they gave out funds and got nothing but a spreadsheet of opportunities back. Their management doesn’t accept that answer so while they may ask for more detail from you for their report, what they need is numbers of closes. That’s all they really care about because in the quantitative inspired world of selling today, we’re all supposed to follow formulaic answers to all things sales.
A CEO of a large reseller once told me, “Don’t fight the Colorado River by walking upstream and not expect to get your knees broken. Turn around and go with the current.”
So why should you use MDF even if it is going to require you to report back to the OEM? One reason might be that according to an article published in the fall of 2013, over half of all MDF funds go unutilized. That’s over 50% of all MDF Funding winds up unused and uncollected. I don’t know if that number is true (I don’t believe everything I read online) but I do know that over the past decade I have seen a reluctance by Partners to even apply for MDF programs.
What if you used those MDF funds and got results that the OEM themselves marveled at? Now you have some leverage and lots of people talking to you about “expanding” the program or scaling it in North America and beyond. (Maybe a great idea, maybe not – yet another blog)
For most resellers or partners, a successful demand gen campaign should help fill pipelines for all sales reps; help promote the OEM’s products; get you into net new accounts by using the OEM product as a “wedge”; bring more attention and resources from the OEM; and increase field engagement with the OEM’s own direct and channel field teams as well as corporate teams.