When I wrote The Ugly Truth About MDF a few years ago, we were in the thick of it. For some clients, we were executing all the marketing their market development funds were intended for. For some partners, we were packaged with their MDF as a way to increase the ROI of the funds they distributed. So we’ve seen it from both angles.
What we’ve learned over the years of building MDF-funded programs is that the ugly truth hasn’t gone away. However, we’ve gotten very good at bypassing the ugly part to extract the maximum value from MDF.
Let’s do a quick review of the MDF paradox. Market development funds are typically given out by a brand to promote a specific product, service or initiative they want to emphasize to the market. Value-added resellers receiving those funds, however, are not differentiated by product. All of the MDF recipients’ competitors sell the same products they do. The only real aspect of a VAR that differentiates it is the value adds. So, the paradox is you are receiving free money to focus on the vendor, the MDF giver, which is the only thing that doesn’t differentiate you while ignoring everything that does.
Keep in mind that the MDF provider doesn’t need everyone to win. They just need a high enough ROI on total spend to keep giving it out. Some sellers will win, some sellers will lose, and they don’t really care which. Why would they? The MDF provider always wins. The only way for you to win in your market against all your competitors is to differentiate yourself via your value adds. What if we could give you a way to do that?
Since the publication of The Ugly Truth About MDF, we’ve refined a process to utilize MDF dollars and still focus on your value adds, all while fulfilling the objectives of the brand partners that give you those funds. It involves some nuanced and sophisticated messaging about how your MDF partners’ products align with your audiences’ very specific problem sets.
In doing so, you can still increase sales around a specific product set. But instead of starting with a solution and searching for customers with a matching problem, you start with the problem and attract all of the relevant customers who have it.
That might sound like the same thing, but it’s not at all. Most customers don’t seek products; they seek solutions to their problems. So changing the approach meets them where they are instead of dragging them to your watering hole and trying to make that horse drink.
A side benefit is that, by starting with the problem, we found great success in combining MDF from multiple partners to reach a larger market, talk about new and insightful things your prospects care about and actually push out competition using MDF. That never happens under the traditional approach to using MDF.
Let’s look at an obvious example we can all understand. The early days of COVID-19 created a firestorm of IT security concerns surrounding the mass exodus of employees from secured, firewalled, perimeter-protected and micro-segmented office environments to the wild west of work-from-home, BYOD, Internet for connectivity, distributed collaboration and more.
Businesses were absolutely scrambling just to figure out what the new issues would be. They hadn’t even started solving them, nor did most know where to start. “How to gracefully transition to a distributed workforce” was on almost every customer’s radar but in none of the MDF solicitations. WTF, right?
So, we took that exact hot button and presented it to manufacturing partners on behalf of our VAR client as a lead-in for a suite of security and collaboration solutions that didn’t conflict across manufacturers. Some SD-WAN here, some SEIM there, sprinkle in some remote access, collaboration or UCaaS with some secure cloud management, and we had a ready solution for the problem most businesses were desperate to solve quickly.
Instead of running five different $25,000 MDF marketing programs pitching individual products, we got committed funds of $10,000/quarter/partner for a year to run a steady and more comprehensive $200,000 marketing effort to capture all that pent-up remote work demand that was waiting for a hero.
This is how you win with MDF. And we mean win for you and your manufacturer partners. It’s (still) simply not enough to take your MDF, run the canned ads or do bad cold calling and hope for the best. Well, it’s not enough to make MDF pretty again, anyway.
