5 Ways to Max MDF and Sales SupportBy Kathleen A. Martin | Posted 2009-03-06 Email Print
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MDF and coop marketing money is getting hard to come by as vendors cut their support budgets. Here are a few tips for getting the most out of market development funds and vendors' sales support programs.
According to the Channel Insider 2009 Market Pulse Report, 53 percent of solution providers believe market development funds (MDFs) will become harder to get over the next 12 months. In addition, 51 percent expect a decrease in vendors and distributors technical and presales support.
This isn’t good news for solution providers who are looking to augment their tight marketing and sales budgets. Before you decide to ax your marketing plans, consider these tips on how you can earn greater shares of vendors' MDF and co-op marketing support.
1. Review and Assess MDF Programs. Not every program is right for
every solution provider. Understanding how much a program will pay out
before you invest can save you time and money. If the payout is 5
percent but requirements eat up 10 percent of your business resource,
you’re upside down with the program. The terms and conditions of most
MDF programs can be found on vendors Web site or partner portals. If
you don’t have time to read all the fine print, ask your distributor.
Distributors are well versed in a variety of programs and can assist
you in finding the right program for your business.
2. Complete Certifications. Understand the certification requirements for the products you choose to offer. The incentives for business partners who complete training are substantially more than those who do not. Look for programs that are offered online or where time out of the office is kept to a minimum. Consider incentives and salary increases for your sales team members who complete certifications. Do the ROI calculation, first, since you don’t want to invest a lot of time if you’re only going to get a minimal return on MDF allocations.
3. Utilize Special Bid and Meet Comp Programs. When it comes down to winning business, any manufacturer will assist you with the best price on their product. Be sure to understand the special bid process for the products you offer and be ready to submit requests before you are in a bidding war with a competitor.
4. Stack Your Program Offerings. Special bids can often be combined with rebate programs; upfront discounts cannot. Talk with your channel account manager, field sales rep or distributor to understand where you can increase your payouts by taking advantage of unadvertised floor days, special incentives or stacked program offerings.
5. Do the Math. There is often a difference between manufacturer’s suggested retail price (MSRP) and what you pay for a product. Do not automatically assume that you will always sell your product at MSRP and pocket the difference. Understand the math for your business offerings and price your products accordingly. Choosing to take inventory on products that you can purchase at a reduced price can increase your profits if you are in a position to do so. Conversely, drop shipping from a distributor to your customer can also allow you to increase your profits by limiting the space you need for inventory and saving on shipping.
Review your program findings with your distribution and vendor sales representatives. Including your representatives as key members of your business operations team can bring the needed support you are seeking.
Kathleen A. Martin is special projects coordinator for Channel Insider.