MDF Funds for MSPs

What’s the Best Path To MDF for MSPs?

There are many ways for your MSP to qualify for vendor MDF, or market development funds.  (Also called joint marketing funds.)

Today, some vendors and MSPs share their advice on how to secure MDF for MSPs, and Carrie is excited to announce that some vendor partners are making MDF available for calling programs with Managed Sales Pros.

How Can My Vendor Partners Help My MSP Grow?

Vendors offer all kinds of incentives to their MSP reseller partners, including:

  • access to free training and certifications,
  • no or low-cost marketing platforms with pre-set marketing cadences and collateral
  • guest speakers and sales presentation experts for community and virtual events that you host
  • private communities where you can share tips and tricks with your peers
  • money to help you with your sales and marketing initiatives

What Is MDF?

Market Development Funding, simply put, is money that your vendor partners invest in your marketing initiatives so that you can sell more. This benefits them – when your managed services business grows, so does their revenue!

If you ask around, you’ll hear stories about the “good old days” of MDF, when vendors required less accountability and significantly less paperwork before they offered up funding to partners.

Now, most large vendors include MDF in their higher tiers (or leads, which are like money, so don’t refuse them!), but most don’t offer financial incentives to less active or lower tier partners.

Who Offers MDF for MSPs?

Mid-sized or emerging vendors have varying channel partner programs, so it benefits you to evaluate new partners not only on how they can help you support your clients, but on their commitment to helping you find new ones.  As new vendors show up, they’re going to have to compete for your wallet share, and there’s nothing wrong with asking them to sweeten the deal.  If you’re going to make a big investment in them, it’s not unrealistic to expect them to make a commitment to helping your business succeed.

Joseph Landes Getting MDF for MSPsJoseph Landes, Chief Revenue Officer of Nerdio cautions partners on asking for funding without understanding the goals of their vendor:

“The best way to go about asking for and obtaining MDF is to make sure that your priorities are aligned with those of the company providing the MDF.  You need to be perfectly aligned, or there is really no reason for them to even entertain your request!”

How Can I Use Vendor MDF for MSPs?

Most vendors will require you to use their funding as outlined in their agreements.  Most won’t pay up front, they’ll require proof of your marketing initiative and results that are measureable before they reimburse you.  In the past, we have seen vendors provide MDF for:

  1. Defined ongoing marketing initiatives like cold calling
  2. One-time marketing initiatives like on-site or virtual events
  3. Swag or other co-branded marketing items

Every vendor has a different policy around who receives marketing funds, and how much funding they qualify for.

How Do I Ask My Vendor for MDF?

Before you ask any of your vendors for MDF, check yourself and ask yourself some questions about whether or not you would consider your own request!

Kevin Damghani, IT Partners CEO

Kevin Damghani, CEO of ITPartners+ says that the best way to get MDF for MSPs is to “just ask for it!”

Kevin has successfully received MDF funding from several vendor partners as his MSP has grown.  His point is valid – you don’t get what you don’t ask for.

“We were turned down a lot before we understood how vendors offer MDF,” says Kevin.  “Now we try to work with vendors that have clearly defined partner programs – if the MDF program is confusing, or hard to apply for, we look for a vendor with a program that is simple.”

 

How Much of Their Product Do You Actually Sell?

If you’ve only been a partner for one year and you’ve sold 20 seats of their solution, a vendor will be far less inclined to fund your next marketing campaign.  After you’ve been a partner for two years and you’re adding 50 seats a month? That’s a relationship that the vendor will want to grow and maintain.  You’ve already shown them you can grow a business, and market effectively.

Giving more money to people who already know how to make money makes sense. Offering MDF to a partner that hasn’t grown in the past two years is bad business.

The better you are at sales and marketing before you ask for MDF, the more likely you’ll receive some love from your partners!

Are You Putting All Your Eggs In One Basket?

When you represent multiple vendors for the same solution, it’s less likely that one of them is going to give you funding.  When you’re hedging your bets, so will your vendor.

Can You Demonstrate Your Marketing Competency?

Show your vendor partner a previous track record of success that is linked to your increased spend with their business.  Don’t come to the conversation unprepared.  Come armed with facts and a plan.

If you’ve never run a marketing event or campaign before, don’t ask to learn on the vendor’s dime. Instead, ask your vendor partner to teach you how to run a marketing event.  Most vendors do hundreds of events annually, and they’ll be happy to share their knowledge. It’s possible they may even help you organize and execute your next marketing event.

What Will You Need To Include In Your Request for MDF?

  • What is the total number of prospects you can target with this initiative?
  • What do the prospects look like?  (Size, vertical, interest)
  • What percentage of the total number of prospects will attend/engage/complete the “call to action” request?
  • What’s your closing ratio on leads generated from similar events?
  • What’s the potential upside to the vendor?

Jim Turner shares his strategy on securing MDF for MSPs

Jim Turner, EVP Business Development for Frontline Managed Services, has plenty of experience asking vendor partners for marketing support.  As the former CEO of Hilltop Consultants, he grew his MSP to 20MM, and he did this with the support of his partners.  Jim tears a page out of his marketing playbook and shares with us his strategy for securing MDF:

  “Find out how your vendor wants you to submit the MDF request.

  Find out what type of partner events or campaigns have been successful.  

  Ask how the vendor calculates ROI or measures success.

  Find out if your vendor partner will help you plan, or will want to attend the event to assist.

  Find out how much lead time your partner needs after your request has been submitted.

  Only submit requests that meet the requirements of that vendor partner.”

What Should I NOT Do When I Apply For MDF?

Justin Gilbert, Senior Director of Channel Marketing for Zix/App River, cautions against inflating your potential ROI when asking for MDF:

Justin Gilbert App River MDF for MSPs“If it is a partner’s first time interacting with a vendor around an MDF engagement there is an understandable tension there, as neither party has engaged with the other before.  In order to set a vendor at ease in giving up the funds, a partner needs to showcase an in-depth understanding of their marketing activity, possible outcomes, risks, and ROI.  While a partner may want to overstate their potential ROI, I’d advise against it.  Most vendors have run hundreds of engagements with partners, and they know what a typical return on investment will be.  Instead, be conservative with your estimate.  If you blow it out of the water, you’ll get even more engagement from the vendor in the future!”

(Check out Zix’s free sales and marketing masterclasses for MSPs here!)

Ready to Find Some MDF?

Managed Sales Pros partners with several leading and emerging vendors that offer funding for cold calling campaigns. We’re happy to help you show the value of cold calling to your existing partners!  If you’re considering cold calling for your MSP, let’s talk about options. To better understand the upside of cold calling for MSPs, check out our ROI Calculator!

Interested in finding some MDF and starting on the path to successful cold calling?  Fill in the form below, we’ll get back to you right away!

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