Scaling up your IT business with vendor funding

One, often overlooked, way that vendor partners can scale their business is by leveraging vendors’ market development funds (MDF).

This is funding that vendors offer to aligned partners to support their marketing and lead generation efforts, and it can be worth tens of thousands of dollars per year to those partners who are willing to apply for it. Yet, many partners never do, in spite of the relatively low thresholds needed to qualify.

In fact, most vendors struggle to allocate their available funds due to the low numbers of applications they receive from partners. Literally, vendors (or the distributors who often manage the funds) can’t give their money away.

For those partners in the know, MDF is considered a low risk, fast-to-access, significant source of business finance, and a sensible way to boost marketing and build revenue pipeline.

While there are rules that govern the use of these funds, these rules primarily (and rightly) ensure the money is used by the partner wisely. In nearly every case, the conditions of funding are far less onerous than a bank loan or other formal financial instrument. The fact is, vendors want their partners to apply for and use these funds.

Normally, there is a requirement for the partner to co-fund any supported marketing and lead generation programs at a ratio of 50:50 or similar, which ensures the partner is focused on concrete outcomes from the program as they have some of their own skin in the game.

So why don’t partners apply for available funds? There are a few reasons.

• Lack of awareness about available funds. In many cases, partners don’t think to ask and their vendor account manager doesn’t bring it up regularly either. This is sometimes related to the fact that vendor channel account managers are often not marketers and, outside of pre-existing portal-driven programs, aren’t really sure what to suggest when it comes to partner marketing support.

• Limited marketing capability or competency. Many partners, particularly mid-tier firms have grown successfully through word-of-mouth and direct sales efforts and haven’t needed to deploy more structured, continuous marketing programs. As a result they haven’t got the in-house expertise to commence marketing programs or to set marketing strategy and focus on it as a key component of operations. That makes it hard to apply for vendor funds, because nearly every application asks for a marketing campaign or program outline, anticipated results and a reasonably detailed execution plan. That can stop partners from ever applying for funds. Particularly if they’re already busy looking after existing clients.

• Limited focus on vendor products because the partner is services led. Understandably, many IT services firms don’t lead with product. They lead with a customer value proposition, and a vendor product is just one part of the equation. Mistakenly, many partners feel that vendor funding comes with an expectation that vendor logos will feature on every market-facing communication or that they will be required to run cookie-cutter, product-oriented campaigns which work against their brand. The fact is, most vendors recognise that partners who lead with services need their brand to be the hero, and are happy to find ways to support partners that aren’t necessarily product or vendor-brand led.

• Increased desire by vendors to fund multi-quarter, integrated digital marketing programs, particularly during the pandemic. The world has moved quickly to digital marketing as the primary way to secure new business and many partners lack the technical expertise to create integrated campaigns that encompass website optimisation, search engine optimisation, search engine marketing, LinkedIn organic and paid programs, email marketing, content creation and other Google-based advertising programs. Unsurprisingly, mid-tier IT firms struggle to frame and deliver programs like these due to the technical expertise required and general B2B marketing experience needed.

Our marketing consultants at Outsource have worked with IT vendors, distributors and partners for many decades. We help partners secure vendor funds and we build and execute integrated campaigns on their behalf that meet vendor requirements. We do the marketing heavy lifting for partners, giving them access to our team of digital marketing experts, content writers, designers and marketing consultants - all as a managed service.

This lets partners build scale and velocity when it comes to building brand awareness and new business pipeline without taking on the additional fixed costs in their business.

Likewise, Outsource builds curated programs for vendors who want to offer partners a high-value, customised marketing solutions that meet their MDF requirements and support their partners in a way that partners want.

For more information, click here or contact us today.