My first job out of college on the client side was advertising manager for some Ace Hardware stores. It was a great experience because I had the chance to do it all - research, media buying, ad concepting, layouts, copywriting, outdoor advertising, tv and radio commercials... even grilling hot dogs at weekend promotions.
It was also my first experience with co-operative advertising.
Co-op advertising is a compelling concept: Buy enough of the manufacturer's product, and they'll set aside money for the retailer to spend to advertise those products. Seems simple enough. But as the owner of those Ace Hardware stores always told me, "Don't let the tail wag the dog when it comes to co-op!" The point being he didn't want the "free" money to dictate our strategy. If the co-op dollars fit into what we were trying to do, great. But if they didn't, he didn't want the "tail to wag the dog" and market in a way that promoted the manufacturer's agenda instead of our own.
This is a very important perspective for the manufacturer to understand as they consider their own co-op programs. Their sales channels are generally more interested in promoting themselves than they are their suppliers. So how does an OEM set up a program that's win-win for all parties concerned?
Here are some ideas...
- Establish early on that the co-op funds are YOUR dollars and you are setting them aside for the retailer to use per your guidelines. Lack of clarity on who actually owns the co-op money can create an array of problems.
- Offer better marketing materials to promote your products both strategically and creatively than the retailer can produce themselves. If your tools look better and are easier for them to use, you both benefit.
- Build your brand separately and aggressively, too. That way the retailer is motivated to market your products, seeing it as a badge of honor to be on your front lines.
- If you don't already have a password-protected online dealer resource for images, logos, and customizable marketing pieces (direct mail, web banner ads, billboard designs, tv and radio commercials), consider building one over the next 12 months.
- Keep your policies fresh. Are you allowing co-op dollars to be spent online and in social media? If not, start...today.
- Be generous and flexible with the media you allow in your co-op program, but rigid with the messaging and design.
- Consider allowing more aggressive percentages (75%? 100%?) for those areas dealers seem to be lacking representation and expertise (search PPC, email marketing, social advertising).
- Consider allowing periods of increased percentage reimbursement (i.e. 100% reimbursement during peak sales months rather than, say, 50%.)
Implement these things and you'll keep dealer tails wagging...without them wagging the dog.