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Co-op/MDF Program: 50% of partners disincline to take advantage of a Coop/MDF program
Before deciding on any solution for your Co-Op/MDF Program, consider this: In a recent survey of 102 US technology channel partners, they voted Co-op/MDF as the least effective channel program for sales. This statistic comes as quite a surprise for vendors, who encourage their partners to promote products by literally giving them free marketing money. While numbers may vary depending on the source, some estimate that as much as 50% of marketing funds go unused. Why throw so much effort into an incentive program that would yield less than desirable results for both vendor and partner? Allow me to enlighten you on the facts.
To have a deeper understanding of the process, let’s shift our viewpoint to the partner perspective. Although reasons vary by industry, there are two recurring issues that explain why partners are disinclined to take advantage of the Coop/MDF process. The first is that they just aren’t aware that these funds are available. With vague reporting and obscure timelines, it’s difficult to get a clear idea of what kind of money is left on the table.
The second reason is that partners feel so pressured to be in compliance with their vendors’ laundry list of rules that this outweighs any benefits of marketing subsidies. This feeling can be described similar to that of mail-in rebates, where retail outlets bank on the fact that you’ll never follow their process all the way through and in turn, forego reimbursement. Both of these issues will negatively alter your partners’ perception of the trustworthiness of your company.
Should you have an MDF program? The answer is based on how much effort you choose to dedicate before implementing your program. It is worth the time to sit back and discuss how these standards are going to be laid out so that it’s clearly understandable for both vendor and partner.
Every company has their own twist of how their Coop/MDF program will play out. While deciding on yours, consider the specifications (e.g. what is the accrual percentage? What is the timeframe for approval?) to leave no margin of confusion of what the responsibilities are for all parties. To help you pave the foundation for your Coop/MDF, take a glance at our whitepaper “Best Practices to Optimize Co-op/MDF ROI” to ensure that no stone has been left unturned. It will save you extraordinary amounts of time and effort through the planning stage, and the relationship payoff between you and your partners will be huge.