Market Development Funds are meant to fuel partner growth. In reality, they often sit unused, under-measured, or stuck in approval limbo.
If you’re managing MDF today, this probably feels familiar:
- Budgets allocated… but not fully claimed
- Partners confused about what’s eligible
- Claims delayed by manual reviews and missing documentation
- ROI conversations that stall before they start
These aren’t execution failures. They’re symptoms of an MDF model that hasn’t kept pace with modern partner ecosystems, something we explore in more detail in our guide to modern MDF program design and strategy.
That was the central theme on our recent webinar, “Frictionless MDF: The AI Playbook for High-Velocity Channel Growth”, moderated by Kenneth Fox, CTO at Channelscaler, with insights from:
- Laura Evans, Head of Global MDF Program, Strategy & Incentives, Zoom
- Karlene Alameda, Senior Manager, Channel Field Marketing, Barracuda
- Louise Grant, Founder & Director, Loucerna
Together, the panel unpacked what’s really holding MDF programs back and how AI is starting to remove the friction that stalls growth.
The Real Problem Isn’t Budget. It’s Friction.
One of the strongest signals came from the live audience polls.
42% of attendees are still managing MDF via emails and spreadsheets.
Another 24% rely on basic partner portals, often without true workflow or visibility.
That matters, because MDF is inherently process-heavy:
- Requests
- Approvals
- Proof of performance
- Claims
- Payments
- ROI tracking
When those steps are manual, fragmented, or unclear, friction compounds fast. A pattern we see repeatedly in the most common MDF challenges facing channel teams today.
As Kenneth Fox put it:
“There’s nothing worse than getting to the end of the quarter and realizing you have a chunk of budget left. Not uncommon – but avoidable.”
Ease of Doing Business Is the New Competitive Advantage
Partners don’t choose vendors based on MDF generosity alone. They choose vendors who are easy to work with.
“Partners are dealing with five or more vendors. If your program isn’t easy to understand, they’ll gravitate to the one that is.” – Kenneth Fox
The panel was aligned on a simple truth: Friction kills participation. Clarity drives adoption which is why optimizing MDF execution for partner success has become a competitive differentiator in mature channel programs.
That means:
- Clearly defined MDF activities
- Proof of performance (PoP) explained up front
- Guided, visual submission experiences
- Fast, predictable payments
Laura Evans was clear on the risks of getting this wrong:
“There’s no quicker way to create a bad partner experience than letting them do the work and then not paying them because expectations weren’t clear.”
Why Allocating MDF Without Intent or Alignment Doesn’t Work
One of the most repeated and important messages from the session was this: MDF works best when it’s collaborative, not transactional.
“You can’t just have a bucket of money and say, ‘have at it’. You’ll get nowhere,”
– Louise Grant
High-performing programs don’t just publish activity lists. They:
- Jointly plan with partners
- Learn what’s worked before
- Leave room for partner-led innovation
- Treat MDF as part of an ongoing relationship and not a one-off reimbursement
Karlene Alameda shared how partner feedback directly shaped Barracuda’s MDF evolution:
“We hosted roundtables with key partners to understand what worked, what didn’t, and where the friction was. That feedback shaped everything.”
AI’s Role: Removing Bottlenecks, Not Replacing Judgment
Despite all the AI hype, 76% of attendees haven’t yet implemented AI into their MDF programs.
That hesitation makes sense. MDF is high-risk, finance-sensitive, and deeply operational.
But the panel was clear about the fact that AI isn’t about replacing humans. It’s about removing the lowest-value, highest-friction work. Thereby freeing team members up to perform more high-value, strategic tasks that require a human touch.
AI is already delivering value in:
- Automated claims review
- Invoice and proof-of-performance validation
- Faster approvals and payments
- Cleaner data for ROI analysis
As Louise Grant explained:
“Claims and payments are often forgotten about and that’s where the experience falls apart. AI can take that manual pain away.”
What This Means for Channel Leaders
If your MDF program feels heavy, slow, or under-utilized, you’re not alone.
But the gap between traditional MDF and frictionless MDF is widening and partners can feel it.
The winners are already:
- Designing MDF around partner reality
- Automating the process layers that don’t need human judgment
- Measuring ROI from the start, not after the fact
MDF isn’t broken. The way it’s been run for years is.
Want to learn more about Market Development Funds? Check out our eBook on What’s Happening with MDF in 2026!
For more info, schedule a demo with Channelscaler today!
