What is MDF and why every B2B marketer should know about it

If your marketing department is like most, you probably beg, borrow and bleed for every dollar you receive.  This is a guide to getting more money.

Do I have your attention now?

MDF stands for “Marketing Development Funds” and it is the bomb.com! (Yes, I just dated myself)

Essentially, think of it as free marketing budget from another company.  Is your mind officially blown?

Why would some other company want to give you money to throw events and write whitepapers?

Answer: They have a vested interest in your success.

Here’s how MDF works.

Your company sells a solution to the market.  You – as a marketing manager – market said solution.  Sometimes it’s a physical solutions, sometimes it’s software, sometimes its a service.  Regardless, your company pays other companies in the supply chain for pieces to make your solution. Thus the supplier has an interest in you selling more of your solution.  The more solution you sell, the more you buy from them to sell more solution.

Let’s break this down another way.

Example #1: Your company has a SaaS solution.  It lives on servers somewhere.  The bigger you grow the more servers you have to buy to run your SaaS product.  The server manufacturer wants you to sell more software, so you can buy more servers.

Example #2: Your company does pharmaceutical testing.  You buy tons of equipment and test tubs to do all this testing.  The more testing work you get, the more equipment you buy.  It’s in the equipment manufacturer/distributor’s best interest to help you get more testing orders.

I could go on and on.

How to get these companies to fund your marketing?

1. Pull a list of the vendors with which your company spends the most money annually to deliver your product/service.
2. Schedule meetings with them to discuss your marketing vision and how they can benefit from your growth.
3. Ask if they have an existing MDF program – note that it may have a different name.
4. If not, see if they would be interested in partnering with you in the form of MDF dollars (pounds, euros, whatever).  This could be in the form of a spend commitment or shared lead generation or something completely different.  Get creative.

Things to keep in mind

• Expect more than 1 logo. Most companies footing the bill will want their logo on anything they pay for.  That usually comes in the form of co-branding.
• Bring your A-Team.  Be sure to pull in your accounts receivable and accounts payable teams so that everyone is on the same page – depending on how deals are structured.  Legal is also a good person to have at the table.
• Be vigilant about communicating the value of the program.  If your MDF partner is not used to doing this type of engagement it will be important to meet with them semi-regularly (I’d say once per quarter) to discuss how the program’s going and it’s ROI.  Remember that they have bosses to answer to too.

Getting funding for your projects can feel like hunting sometimes.  Hopefully this gives you a new weapon.