What are Co-Op Funds & How do They Benefit Channel Partner Programs?Posted on June 3rd, 2022 by Cameron Schulz
What are Co-Op Funds:
Co-Op funds, also known as Marketing Development Funds (MDF), are financial resources that distributed marketers may offer to subsidize the cost of partner marketing materials and reduce the expenses incurred by the partner.
Benefits for your Channel Partner Program
Incurring another cost isn’t typically considered a benefit, especially for a department whose budget is often easily cut. However—when executed well—marketing budget allocated to co-op and marketing development funds has the potential to return benefits that are critical to channel partner growth and success.
New Opportunities & Closed Deals:
According to one report, over half of channel marketers believe co-op funds are the most effective strategy for influencing partner behavior. The funds are an incentive to participating partners—encouraging them to execute specific campaigns, utilize featured assets, and complete advanced training.
Boosting engagement in these specific marketing and sales activities is key to maintaining a consistent brand, disseminating accurate and relevant offer information, and ensuring partners have the skills to effectively present your offering to their local audience. All of which play a significant role in creating sales opportunities and closing new deals.
Partner Loyalty & Competitive Advantage:
A recent power shift enabled partners to be more strategic about who they do business with—considering aspects of the relationship such as the costs associated with being a partner and how current or potential vendors invest in partner growth.
With the purpose of subsidizing the cost of local marketing and/or incentivizing participation in training, offering co-op funds is a clear vendor investment in both reducing partner costs and fostering partner growth. Offering co-op funds is a notable competitive advantage for vendors regarding partner loyalty and partner deliberation.
Strategic Guidance & Program Alignment:
Channel partner program success is often challenged by insufficient management and guidance. Vendors struggle to align partner activities with program objectives—lacking the control to engage them in special initiatives and educate them on how and why they should focus on a particular offering.
In managing a co-op funds program, distributed marketers can assign funds to specific campaigns, tactics, and training that support changing business goals. The endorsement of the co-op funds will shift partner focus to taking actions that will move the needle on current initiatives.
Co-op Funds: The Next Step in Developing a Successful Channel Partner Program
As the vendor-partner relationship continues to evolve, co-op funds will be a key strategy for strengthening the partnership and maintaining a balance between encouraging partners to pitch your offering in a way that is meaningful and relevant to their unique audiences and ensuring that your channel partner program is performing the way you intended to deliver the outcomes you need.