MSPs have been urged to grab their fair share of the “astonishing” amount of unused vendor market development funds (MDF) wasted each quarter.
MSP marketing expert Jay Janes has made it his mission to educate MSPs on how to unlock these free – and often unclaimed – growth funds.
According to a recent survey by channel management platform Zinfi, as much as 60% of MDF is not used on a quarterly basis.
“If there’s one thing I feel super-passionate about, it’s that MSPs should be accessing these growth funds,” Janes told IT Channel Oxygen.
“Most of that money goes back onto the bottom line because MSPs aren’t coming forward with marketing plans that Vendors and Distributors can get behind.
“MSPs need to know about them, as they are one of the biggest drivers of growth, I’ve seen across the 6,000 or so MSPs I’ve had oversight of over the years.”
‘The amount of unused MDF is astonishing’.
Having held high-level roles in cloud distribution for five years, Janes set up dedicated IT marketing agency xpandly in March.
xpandly has an edge over the competition because its employees know the intricacies of vendor and distributor programmes inside out, he claimed.
Chief among these is the MDF pots vendors hand out to distributors each year.
“Most distributors and vendors are crying out for MSPs to come to them and say ‘this is my plan, can you support it with some funding’?” Janes said.
“They want to use this pot to grow, as that’s what it’s there for. But more often than not the vast majority of those funds in that pot are put back into the P&L.
“The amount of unused MDF is astonishing. And if you’re a vendor with a realistic expectation of a two or three-to-one return on your MDF, you’re going to be disappointed.”
‘Having a non-marketing savvy person writing a marketing plan is never a good idea’.
To access MDF funding programmes, MSPs need two things, namely a relationship with the supplier and a well-written marketing plan spelling out exactly how they intend to spend the money, Janes explained.
“In order to put that plan together, they need an expert agency. If they do it themselves, it’s going to be a non-marketing savvy person writing a marketing plan – which is never a good idea,” he said.
“At xpandly, we will help MSPs create the plan so they can access that funding.”
Janes added: “The other key thing is to understand where the supplier is focusing.
“To take Microsoft as an example, right now they have a very clear focus on Azure, E5 licensing upsell, Defender and Copilot. If you as an MSP go to your distribution partner and say ‘I want to run a campaign on Copilot but don’t have any budget, this is how I’m going to execute it and this is my expected ROI, do you have any funding?’, nine times out of ten the distributor is going to say ‘absolutely’.
“If you want to grow as an MSP, you have to engage with your suppliers, but you also have to align your growth strategy with theirs.”
Although some vendors have pulled back on the generosity of their funding in 2023 due to the tech downturn, the amount of MDF up for grabs will always hinge on the strength of the MSP’s plan, Janes stressed.
“No vendor is going to turn down the opportunity to win lots of new customers. It’s always available,” he emphasised.
‘Our edge over other agencies, is that we are IT industry only, and experts in MDF’.
Janes said he started xpandly partly with the aim of helping MSPs navigate the complexities of vendor and distributor programmes.
“Other agencies don’t know the intricacies of MDF programs. That’s one of the areas where we really differentiate being an IT only agency. We’ve worked with the vendors and distributors and know their programs inside out. That’s why we are huge advocates for MSPs being close to their suppliers. There is a lot on offer to help them grow,” he said.
“There are so many MSPs wasting money on generalist marketing agencies or agencies who have simply niched in IT but never actually worked in it. But it’s not just the retainers they are wasting, it’s the opportunity. Generalist agencies can’t advise MSPs on the programs available in the IT channel because they just don’t know they exist, it’s not their specialism.
“This is why we’re doing it – it’s the right thing for the sector.”
Janes – who walked away from a top job in distribution to found xpandly – concluded: “In the UK, if I had to put a number on it, probably less than 5% of all MSPs are utilising MDF programs the way they ought to be.”
“Some MSPs think they’re not big enough to access these funds, but if you don’t access them, you’re likely never going to be big enough. The Distributors and vendors want to help you, but they need to be engaged.”
This article was produced in association with xpandly and is classified as partner content. What is partner content? See more here.
Doug Woodburn is editor of IT Channel Oxygen
