MDF: Confetti or Capital?

In the world of tech, most companies—whether it’s Microsoft, Cisco, or a software as a service (SaaS) model—sell through channel partners like value-added resellers (VARs) or managed service providers (MSPs) to extend the reach of their products. Market development funds (MDF) are co-marketing funds allocated to those channel partners to grow sales.

MDF can be a real amplifier. Yet too many marketers treat it like confetti—tossed into the air for show, scattered with no real impact, and forgotten after the party. Smart marketers know better. They treat MDF like capital—strategic fuel to grow pipelines, build trust, and drive measurable growth. And, as a bonus, those who spend those dollars wisely often end up with a larger share of MDF because they’ve produced solid results.

There are many ways to squander MDF, but here are three examples of fatal mistakes:

1. Spending on the wrong audience for vanity metrics

In marketing, we call this “spray and pray.” Marketers who cast a net too wide or target a generic audience experience low engagement and poor conversion rates. For example, investing in expensive social media campaigns to generate impressions, likes, or follows isn’t at all effective if your SaaS product serves CFOs. And without a clear conversion path, those followers or boosted posts don’t move the needle on sales.

2. Neglecting the landing page experience

Spending money to drive traffic is a wise move, but it becomes a doomed effort if the page a customer reaches is generic, confusing, off-brand, or doesn’t have a clear conversion strategy. Smart marketers employ clever tactics like having a strong visual hierarchy, a clear and compelling call to action, and minimal form fields. Additionally, they continuously A/B test headlines, images, CTA, wording, and layouts.

3. Swag, tchotchkes, and events at the wrong stage of the funnel

It’s tempting to create “cool” logoed giveaways, clothing, and other kinds of swag—and certainly a small portion of any marketing budget needs to cover items like this—but without a real plan, this can just be fluff. Marketers are trying to convince potential buyers that they NEED a product; giving them stuff that they don’t need isn’t the best way to go about this at the outset. Top-of-funnel events (trade shows, sports sponsorships, etc.) might seem like a better, more experiential use of MDF, but they can’t successfully drive bottom-of-funnel goals if little to no thought has been given to follow-up infrastructure to nurture and convert potential buyers.

MDF isn’t free, it’s fuel! Spend it chasing clicks, swag, and noise, and you’ll burn through your budget with nothing to show. Invest it wisely, and you’ll build momentum that lasts long after the campaign ends. So, what will it be…. confetti or capital?

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