Those of you who have recently indulged in the world of co-selling will want to know more about the tools used in funding them. Two of these tools include market development funds and partner funds. These are two areas of capital which are set aside to help the progress of the collaborative partnership ecosystem. When used correctly, they can spur on a world of collaborative contentment.
Let us talk about market development funds and partner funds. What are they? Why do you need them? And can you use them to drive revenue to your business?
What is a Market Development Fund?
A market Development Fund is a fund set aside by sellers which they use to create an indirect sales channel. Sales from that area will funnel back into the fund, creating an ecosystem of balance. Marketing development funds help affiliate links and partners, as well as resellers and distributors to keep their product funds in one solitary system.
Market development funds are abbreviated to MDFs. Sources estimate that there are around 4500 programs such as these in the US. This product classification represents some $50 billion in sales each year. A large proportion of your Market Development Fund is likely to remain unused, particularly if you are a co-seller. The reason it goes unused is so that it can feed back into future products. Like a budget, which rolls around to next year if it goes unspent.
Marketing development funds are set aside so that partners can pay for training, pay for marketing or any other activities which are beneficial to both partners.
What is a Partner Fund?
A partner fund is similar to a Market Development Fund, except that the partner fund is shared by more than one partner. There are many types of partner fund, each of which aims at driving better relationships with your partners. A Marketing Development Fund is a type of partner fund, for example. There are other types of partner fund, too. These include the following:
Sales campaign funds
These funds are set aside for the duration of a marketing campaign. They drive quarterly gains on sales and ROI. They are specific to individual campaigns.
Outcome based funds
Outcome based funds are set aside for partnership project when partnership projects need incentives. They pay out more budget allocation per target met, or achievement unlocked.
Enablement fund for Partners
A partner enablement fund sets aside allocated budget for those who need further training or certifications which will advance the joint project. It ‘enables’ progress by investing into the team members and projects’ future.
Lifecycle funds
These funds last for the life cycle of the goods, activity, or service? The Life Cycle Fund provides incentive for partners to work closely to create opportunities in renewal or expansion.
Partner rebate funds
The more a partner sells using this fund, the better the discount that they get on their next number of items. This boosts profitability and increases their ROI potential.
Partner infrastructure funds
By sponsoring a partner’s infrastructure, you can bring them up to your level, while you simultaneously experience innovation and solutions in your field that you would not have otherwise had access to.
Funded heads
Using this model, you would fund per head on your team.
Who do I Drive Market Development Funds and Partner Funds to my Business?
We live in a digital world where we can drive market development on partner funds to our own businesses using the internet. Of course, it is not as easy as it looks, and you will need all the help you can get. Learn why co-innovation, co-investment, and collaboration are transforming the partner ecosystem at https://www.workspan.com/market-development-funds-and-partner-funds-definition/.
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