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No free lunches for Kiwi channel as HP changes marketing rules

By Sean Mitchell, 17 Apr 2015
FYI, this story is more than a year old

HP is changing its marketing funding for channel partners, in a move that means that partners will now need to pitch their ideas for funding, rather than automatically receiving the funding based on previous sales.

Other changes to the market development funds see it moving from quarterly to six-month projects.

In the past only HP’s top tier Platinum and Gold partners were able to access MDF funding. Kim Mckay, HP PPS New Zealand channel marketing manager, says the funding has now been opened up to Silver partners as well – a move that means the number of eligible partners in New Zealand increases to 100, and which provides further incentive for partners to become Silver certified.

The MDF will be managed through an updated portal in Salesforce.

A key move is the abandoning of the old accrual-based funding, which will be replaced by ‘planned MDF’ – a meritocracy where only the marketing pitches which drive the best results will be funded.

HP has said that under the previous volume based MDF programme, marketing dollars were disproportionately available to the company’s largest partners. Under the new offering, activities which promise the best return on investment for HP and the partner will be funded, not directly related to the size of the partner pitching the idea – or the size of their last quarter sales.

The vendor warned partners last year that it was ‘sunsetting’ accrued funds and opting instead for the initiative based ‘best pitch’ model.

Partners at the recent HP Global Partner Conference were told the new programme, which kicks in at the start of the new HP second half on May 01, will be ‘simple, predictable and profitable’.

The new model reduces the opportunity for partners to take advantage of the funding – some partners have been known in the past to use the funding for staff events, eDMs and other events that would have happened without the funding, anyway.

Booking ads and including logos from other vendors in the advertising, claimed against their HP MDF, will also be avoided under the new model.

Partners will also be required to show proof of execution and proof of cost before receiving the funding from HP.

The ‘planned MDF’ will see HP working with partners on half year plan specific metrics for success, with activities executed on a quarter-by-quarter basis.

At least half of the MDF must go on what HP calls ‘true marketing initiatives’ to grow the business, such as lead generation.

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