Market Development Funds

MDF are funds held by vendors and offered to select partners based on the specific needs of the vendor and the potential for
success of the partner. A vendor wishing to increase sales for a specific product or looking to enter a new vertical market may
discuss the possibility of receiving additional funds with a partner who has proven their expertise or sales prowess or one where
the vendor sees potential for growth and future sales. They are given at the vendor’s discretion to select channel partners prior
to any sales taking place and the amount can vary from partner to partner. Specific sales and marketing plans are discussed before
the funds are given and detailed reporting of leads received and customers converted must usually be provided by the partner
to the vendor.

As a growing company, one is likely to set aside marketing development funds. Now one must decide how to strategically allocate
them to receive the highest return on investment(ROI), which includes driving sales, developing new business prospects and
attaining overall market share.

Key components in MDF are,

Having a concrete program guidelines, better communication: This is usually the heart of the program to facilitate sustainable
growth in a way that every aspect of opportunity needs to fit together. The objective should be of a strong program which will
have a strong set of metrics behind it. The best way to establish those metrics is to benchmark manufacturers that have the
programs already in place. Often there is no clear path of participation, incorrect partner contact approach and poor customer
service. Communication is one of the key factor in this program which mandates a strategy for engaging better with opportunities.

Recommendation: This can be addressed digitally if there is a platform created by the Manufacturers/Brands for all their partners
where they can talk to each other and share the best practices across regions for better lead generations. There can be profiles
created and saved which would help in hassle free onboarding experience of partners.

Organizing Events & Partner Engagement: Paying for an event where the purpose is to build the manufacturer and partner brand
generating awareness. There can be defined sponsorship packages that must be identified and the benefit must be open to
manufacturers with all activities featuring specific branding products, services and/or solutions. As per current market standards,
digital & print are contributing towards lead generation with the help of online assets, banners, online campaigns, social media
campaigns, PR campaigns and multi touch campaigns such as emails, direct mailers and so on.

Recommendation: Conducting events like Partner event enablement can help manufacturer to train/enable a better
understanding of new/high sales products, services and/or solutions among all the partners in single forum. There can be
webinars, demo day, whiteboard event respectively. Also, to seek out solutions that adjust with digital technology and provide
them with the marketing analytics on ROI to effectively outperform their competition.

Developing a tool for all the products to deliver and distribute business intelligence/data analytics for showcasing products,
services and/or solutions. This should digitally provide an understanding and insight into the partner’s customer base, such as
buying patterns and/or opportunity pipeline.

By encouraging partners organizing events regionally (sponsored by manufacturer) during the peak season like how “Black
Friday/Cyber Monday” sales happen. Also, encouraging by providing roadshow for the products and sales from previous year to
make them understand market demand. Digital signage, electronic banners, electronic flyers in public forums like shopping malls
and other most visited joints having an associate to explain and advertise products with its features.

Misc. (Claim/Reimbursement process): Recommendation: If there can be one platform build to have partner and customer’s
information would help gaining more visibility into every stage of channel marketing process. Resellers must be able to submit
prior approvals, upload claims, and access reimbursement information easily. Pre-approved, templat marketing materials can be
easily customized and implemented by channel partners.

Centralizing data and resources using web based applications help in time consuming and measuring digitally with the help of
PRM SaaS tool that graphically depicts partner feeds and convert it into scalable and accurate. More and more businesses today
are moving their software solutions to the Cloud. It is a best practice to adopt web based solution that provides fund visibility
from one interface and helps tremendously with forecasting for future marketing expenditures. An automated program should
support instant communication capabilities and display all available data in real time like access to MDF balances YTD, total
earned YTD, total claims YTD, pending claims and claims paid. This data should be instantly retrieved and reviewed. This would
majorly contribute towards programs efficiency.

Track results and document sales: ROI is critical for ensuring future market development funds. It is very important to clearly
show how marketing efforts directly impacts vendor sales.

Recommendation: Ultimately, to understand the effectiveness of financial investment, one must have closed loop reporting. This
means that you collect and analyze, marketing sales reporting data to determine the ROI (Return on Investment) and modify
activities accordingly to attract and close the most qualified leads. Require that channel partners provide an estimated ROI when
submitting an initial request for marketing funds or a specific campaign. The partner’s sales team should also be reporting back
to its marketing colleagues on the quality of the leads and the number of qualified leads which eventually converted to sales.

This collected data can be used across all partners to develop a road map of successful campaigns and an understanding of the
types of customers who are more likely to convert – developing a more accurate buyer persona. Thus, you may choose to adjust
how MDF and co-op marketing funds can be used to ensure that partners attract more qualified leads and sales can close them
more quickly. This entire process can be stored and tracked in database for better analysis and reporting.

Conclusion:

These changes to the program will further simplify like providing the ability to track future activity or planning requests and
decreasing MDF administration with much scalable and accessible data handling process. We can also remove front-end
documentation and proof of execution requirements, and grant the ability to upload multiple activities at once using digital tools
and technology. We can offer a balanced model strategy and continue to offer the predictability of earned MDF as well as
proposal-based MDF to our partners. In turn, vendors can quickly add partners and communicate to forge relationships that
contribute to opportunities that are more profitable, developing stronger partner loyalty and mindshare as well as higher
productivity, lower labor costs and can focus on generating the most ROI from their channel marketing budget.