Market Development Funds (MDF) programs
Market Development Funds (MDF) programs are ubiquitous in the technology industry. Most tech companies have an MDF program where they provide funds to their partners, or consume funds from another vendor's MDF program, or both.
Despite advances in digital tools and collaboration platforms, today most MDF programs are managed manually using spreadsheets and emails, frequently resulting in under-utilization of funds, claim misuse, compliance and audit issues, reporting challenges, and more. In addition, organizations make significant investments in time and resources to orchestrate the complex requirements of each MDF program.Often, companies hire third-party service providers as a program requirement expert and neutral party to work between the two partners and process all of the manual steps.
Recommended Watch: [On-demand Webinar] 5 Ways to Boost your MDF Program with WorkSpan
WorkSpan digitizes MDF partner programs, resolving many of the challenges you and your partners face every day. With WorkSpan, you can run every MDF motion--proposals, proof of performance, reimbursements, compliance, reporting, and more--all in a single collaboration space, shared with your partners.
Please let me introduce you to one of our MDF program experts, Lisa Sonntag. Lisa has been helping our MDF customers digitize their programs on WorkSpan for over 2 years, and brings with her 30+ years of experience in high tech, including at IBM and at Lenovo. She has 6+ years of experience working with MDF programs, and is passionate about driving efficiency, effectiveness, and helping our customers accelerate revenue through well-orchestrated MDF execution.
I asked Lisa to share a few words of advice based on her experience.
“MDF is a very effective marketing tool, but can also be a significant compliance risk if not managed effectively. No publicly traded company wants to land in front of the SEC, and MDF mismanagement can be a cause for this. Most MDF programs have developed processes to assure compliance (aka keep you out of trouble!), but trying to manage those processes can be extremely complex and time and resource consuming. I’ve seen some companies using dozens of siloed tools to manage their MDF programs! A few tips I’ve picked up over the years:
- Whether you are receiving funds or providing funds, review internal processes to ensure you have the tool(s) needed to track the funds through the entire lifecycle, including working within the terms and conditions (T&C’s) of each of the funds. These can vary widely from program to program (even within the same funding partner), and a seemingly minor detail can cause significant issues at claim (or audit) time.
- If you are providing funds to your partners, clearly define exceptions to the T&C’s and the exception process. There are always exceptions, and knowing how to manage these can save significant time and ensure you are still meeting compliance and audit requirements even when providing flexibility. If you are receiving funds, understand the guidelines that are in place to ensure you will not have to ask for an exception.
- Know when to say no! As I mentioned above, you need to provide for an exception process, but that doesn’t mean you have to say yes to all cases. I’ve seen situations where partners have not followed the defined guidelines but still request the funds or the reimbursement, leaving the funds owner in a difficult spot. When this happens, you’ll want to first push back on the request, and may even need to engage your legal team to ensure you aren’t in violation of the legal terms of the program.”
One of WorkSpan’s MDF customers, Joan Richards, Director, Global Alliances and Partner Marketing at Red Hat, shared her experience and learnings at our recent Customer Advisory Board meeting.
Prior to digitizing their MDF programs on WorkSpan, the Red Hat team was experiencing many of the challenges associated manually managing MDF programs. After digitizing on WorkSpan, the program’s campaign volume increased by 62% and funds managed increased by 22%--with no increase in headcount! Built-in real-time reporting improved decision-making by increasing the number of measurable program data points by 6x. Six steps have been removed from the process, reducing campaign cycle times by 75%, and Red Hat no longer needs the third party vendor!
If you’re interested in learning more about how digitizing your MDF program can help your organization manage your MDF programs, join Joan and myself for a live webinar on July 14th at 10am PT. Joan will talk about her experience and results, and I’ll demo an MDF program on WorkSpan.
If you can’t make it, please register and we’ll send you the recording. Register here
Amit is passionate about driving ecosystem growth through co-selling programs. He co-founded WorkSpan after experiencing firsthand the success of SAP HANA's ecosystem approach, which led to it becoming the fastest-growing SAP product to reach $1B in sales. He now oversees all Sales, Marketing, Services, Partnering, Customer Success, and Support teams at WorkSpan.
