Gross Margin Management

MDF channel incentives

Automate and streamline the MDF and Co-Op cycle

Entomo automates and streamlines the entire “request-approve-claim-validate-authorize-payment cycle for Market Development Fund (MDF) and co-operative (co-op) advertising incentive programs. For both MDF and co-op programs, the process starts with the partner requesting or registering for an incentive through Entomo’s SmartHub® Partner Portal. The request is then auto-routed to the appropriate administrator(s) for approval. Once the approved activity has been performed, claims are submitted via the Partner Portal and automatically validated and authorized for payment or credit. If an MDF claim is rejected by the system, authorized administrators can review the claim details and perform a manual override if necessary, with comments and an audit trail. Payment authorizations are automatically transmitted to the appropriate ERP or other financial system for payment.

full co-op / MDF Program management

Configure multiple global MDF, co-op, or other channel incentive programs directly in SmartHub, based on partner type, product type and other criteria. There is no limit to the number of global or partner-specific programs that can be configured.

Program parameters that can be defined within Entomo include but are not limited to:

  • Product
  • Time period
  • Accrual rates
  • Thresholds
  • Payment caps

These program definitions are used along with transaction data to determine fund accruals.


  • Streamlined and automated process for request-approve-claim-validate-authorize-payment cycle
  • Configure co-op and MDF programs based on partner, product or other criteria
  • Capture proof of performance
  • Understand true performance of MDF and other channel marketing programs
  • Eliminate claims overpayments
  • Accrual and payment authorizations


automate your CO-OP and MDF PROCESS

For co-op and MDF programs, the process starts with the partner requesting approval using Entomo’s SmartHub® Partner Portal. Along with the request, a business plan or other backup material can also be submitted. The request is then auto-routed to the for approval, if required.

mdf-program-management-entomoCredits can be calculated with or without explicit claims being submitted. If explicit claims are required, they aresubmitted via the Partner Portal. Proofs of Performance—such as a copy of a print ad—can also be attached to the claims and they become part of the repository. All claims are auto-validated against the original program parameters and accruals.

For all channel incentive program types, SmartHub provides the ability to do automated accruals and authorize payments, without the partner having to make an explicit claim.


Co-Op and MDF Channel Incentive Management within SmartHub.


Gain program performance intelligence and eliminate claims overpayment

Double-dipping and claims overpayment are reduced dramatically with Entomo’s compliance controls, fed by cleansed and normalized POS data in real-time. Entomo not only enables accurate and timely claims and commission payments and revenue recognition, it also provides sales, finance and marketing teams with relevant insights. Monitor and analyze program accruals / exposure, program utilization and program ROI. Use utilization metrics and ROI of past incentive programs to develop and fine-tune strategies for future programs. Incentive data and statistics can also be used for objectively measuring partner performance.

Incentive analytics can also be integrated into the Channel Analytics and Dashboards module.

All channel incentive activities seamlessly feed Entomo's Sell-Through-Revenue-Recognition module to allow calculation of revenues net of back-end rebates. This ensures the correct G/L journal entries are booked for incentives that are expenses (i.e. co-op funds) and those that are reductions in revenue (i.e. Ship and Debit programs).


Terms and definitions

Market Development Fund (MDF) Programs

Market Development Funds or MDFs are funds that are made available by a manufacturer or brand to help channel partners—distributors, resellers, VARs, or and affiliates—promote its products and create awareness. Co-operative (co-op) funds is a synonym often used interchangeably with MDF. MDF and co-op funds typically augment your partner's marketing resources. These programs usually require prior approvals and proofs of performance, such as participation in a retailer's ad circular.

Type of MDF and Co-Op Programs
Market Development Funds can be organized in different ways depending on manufacturer’s program objective. Co-Op funds can be made available for a specific advertising vehicle (i.e. store circular, direct mail), or segment of affiliates the brand is trying to motivate or reward (for example, top-performers, average-performers, low-performers). The way co-op funds are structured has huge impact on a channel partner’s willingness to participate in the program. Below are four common funding or program structures.

  • Stipend
    Stipends give channel partners the freedom to use a fixed quantity of money (for example, $5000 per quarter) to opt-in to different marketing programs that the manufacturer makes available.
  • Fixed Quantity
    Rather than providing a set dollar amount, some manufacturers provide access to a fixed number of marketing resources (for example, number of direct mail pieces) at no cost. The zero cost is aimed a motivating local affiliates with strong brand support.
  • Discounts
    Manufacturers can subsidize the local marketing spend of their channel partners with discounted, but not free, marketing programs. Discounts help channel partners’ own marketing spend go farther.
  • Rebates
    Manufacturers also reimburse channel partners for money spent on approved advertising or other incentive program. More on rebate programs.

In these cases, channel partners already have the product in stock and may have paid for the inventory. MDF and co-op programs generally follow the same basic process as other channel incentive programs:

  1. Request: Channel partner requests a custom program or participation in a generalized market program.
  2. Approve: The request is either approved or declined by the manufacturer.
  3. Claim: Partner or end customer submits a claim to the manufacturer for the rebate or SPIFF payment.
  4. Validate: The vendor or manufacturer must confirm the claim is valid.
  5. Authorize: Valid claims are authorized for payment.
  6. Payment: Reimbursement/payment of the claim amount to the channel partner or end customer.
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