In prior blogs, attention was drawn to the transformative dynamics occurring within partner investment funds (such as Market Development Funds – MDF, and Business Development Funds – BDF) in direct response to the evolution of the indirect channel. This evolution encompasses the integration of partner ecosystems, synchronization with the customer buying journey, prioritization of partner success, and heightened contention for partner mindshare.

To effectuate the metamorphosis of partner investment funds, organizations are confronted with the imperative task of reevaluate and realign the strategic blueprint, organizational framework, allocation, enablement, and measurement of these funds.

In this blog I will highlight best practices for optimizing utilization of partner investment funds. It is not unreasonable to expect 80 to 90% utilization rates even though the industry average for fund utilization is less than 50%.

These best practices include:

  • Compelling value partner proposition for program and activities
  • Easily understood, standardized activities that are efficient to utilize
  • Flexibility in policies and procedures that allow for quarterly adjustments
  • Management and allocation of funds on a quarterly basis
  • Successful utilization of previous awarded funds prior to awarding new funds
  • Continued collaboration through the execution of the activity

Many partners are more concerned about getting the funds than they are about getting results.  These partners are generally slow to conduct activities, produce limited results and provide inadequate reporting.  When partners see a clear and compelling value proposition the activities are conducted in a timely manner with exceptional results and the ROI is easily reportable.   Activities with compelling value propositions are aligned with the partners long-term strategy and short-term goals. During the joint planning process, identify and prioritize activities that align with the partner’s business goals (i.e. building a practice in X) while enabling quarterly goals (grow revenue by X% in a particular market). This methodology creates a ‘flywheel’ effect in which partners are even more eager to start the next activity when they achieve good results from the previous activity.

Activities are not the goal, they are the means to an end. Good partners focus on the potential results of an activity they want to achieve and the results as efficiently as possible.  Do not force your partners to navigate through a complex list of activities with varying rules and requirements.  Keep in mind they must do this with all their vendors.  Standardize your activities and remove redundancies and scarcely used activities.  Standardization can be accomplished by providing some flexibility in how activities are conducted.  This will allow you to potentially consolidate many activities.

Top MDF programs also provide pre-packaged activities that require minimal set-up by the partner, allowing them to conduct the activity quickly and with less of a burden on their organization.  Pre-packaged activities also work well for partners who do not have the competency or capacity for setting-up the desired activities.

Vendor and partner priorities may change from quarter to quarter (i.e. focus on markets, products, services).  Ensure your MDF policies and procedures allow for real-time adjustments to allocations and plans. Joint business planning and MDF management should be reviewed quarterly at a minimum.  Adjustments should be made based on previous MDF results and changes to product and market priorities.

To ensure the effective use of funds and to provide flexibility in prioritizing products and markets, some vendors utilize a ‘gated’ or ‘milestone’ approach in which funds may be allocated to a partner on an annual basis, but activities are approved quarterly. This provides vendors with the ability to ensure previously approved activities have been executed effectively before approving the next activity. This also gives the ability to ‘expire’ funds if the partner does not execute the activity in a timely manner.

Managing funds on a quarterly basis also ensures that funds are not locked up for an entire year and then go unused. Expired funds can be reallocated to partners that will utilize them effectively and timely. While this may be seen as a negative by some partners, your strategic partners will realize it may open additional funds to them if they execute activities effectively and timely.

Vendors should also continue the collaboration with partners through the execution of the activity.  This includes tips and best practices for setting up and running the activity.  They should leverage the lessons learned from successful activities conducted by other partners.  Vendors should also review activities and results with the partner on a regular basis to identify areas in which the vendor can provide assistance.  This will improve the effectiveness of the activity and demonstrate to the partner that the results of the activity are important to the vendor and that MDF activities are a collaborative partnership.

Leverage these best practices to improve your investment funds utilization and to optimize the return on your partner investments. Stay tuned for the next blog highlighting best practices for joint planning of activities based on the partners engagement maturity and  business strategy. Did you miss Part 3 of the series? Click to read now.

Lead against your competitors with AchieveUnite Strategic Insights. Learn more today.