HP partners urged to buck up MDF ideas
Changes to how HP allocates MDF will hit home in the next few weeks, marketing agency warns
HP resellers have been urged to think smarter about their marketing activities for the coming quarter or risk losing out on market development funds (MDF).
As revealed by ChannelWeb, HP has ditched its laissez faire approach to MDF allocation and will instead now dish out funds only to those who demonstrate loyalty and can prove ROI.
Andrew Cross, sales director of Channel Recruitment Solutions (CRS), said this "step change" would hit home over the coming weeks as HP allocates its MDF budget for its fiscal third quarter beginning 1 May.
He also claimed the change would play into the hands of specialist channel marketing agencies such as his own firm and Xact Marketing. After starting off as a channel recruitment firm, CRS recently branched into lead generation, focusing solely on HP's Enterprise Servers, Storage and Networking (ESSN) division.
"HP wants to ensure it gets a good return on investment," he said. "My advice to resellers would be to take the process seriously and work with an agency that understands their business and the channel.
"If you are a virtualisation specialist and the telemarketing company cannot spell VMware, or doesn't know what VSphere is, do not work with them."
According to this week's CRN poll, at the time of going to press 91 per cent of readers believe vendors in general are becoming stricter over MDF allocation, a view seconded by Ian French, founder of channel consultancy Siceo.
"It is quite clear that funding is getting tighter but it is absolutely available for the right things," French (pictured) said. "Woolly, non-specific funding - where you automatically get given a percentage - will certainly dry up very quickly."
Cross, who joined CRS from HP Gold partner Sol-Tec in March, said all CRS' agents are HP-accredited. As part of its package, CRS will send progress reports on the campaigns it runs to HP after 30 and 365 days.
"There is a level of confidence that we understand the HP story," he added. "We are not generalists; we don't even do PSG or IPG, just ESSN. And we can assist with MIF [marketing investment funding] applications and take out some of the pain."
Cross said HP would move from a system of allocating funds almost automatically to one where the resellers must pitch directly to HP.
"Before, HP would say ‘here's $5,000'. Now it's a case of telling them, ‘we are a virtualisation specialist, we want to sell HP servers, targeting mid-market accounts in the south-east and our services offering is this. If you give us $5,000, within 12 months we will have returned this amount as revenue and quoted pipeline'."
Lee Ganly, chief technology officer at HP partner Acora, was unconcerned that HP's shift in strategy may hit the more vendor-agnostic VARs such as his firm.
"We are staunchly independent and HP may not like this," he said. "But if we are penalised, that is fine. We have a marketing team that does not rely on vendor marketing money as the messages the vendors want to take to market are not the same as ours."