Co-op programs have long been an important strategic lever in a well thought out brand strategy -- spurring sales in regional and local market levels through co-advertising and enhancing local market presence with television, radio, signage, billboards and local sponsorships. While current estimates put U.S. co-op marketing spending in the $35 -$50 billion annual range, recent studies suggest that as much as 40% of available funds go unused for various reasons, ranging from complex business processes and onerous rules to lack of understanding of marketing processes and program benefits.
Arguably, the rapid pivot toward digital marketing has exasperated these problems, as brands grapple with how to maintain brand control while enabling their networks to execute in these new channels. At the same time, traditional advertising channels are being overtaken by “service and technology” based programs and promotions – wreaking havoc on the traditional advertising heavy co-op model.
These key strategies, focused on simplification, education and enabling your customers, will improve participation in your co-op program:
- Make room for digital - There has been much debate about the future of the co-op marketing model now that local business owners have their own direct-to-consumer channel at their disposal and tend to be scaling back on traditional forms of advertising. While some brands are struggling with the changes, we have seen many progressive brands embrace the digital marketplace and seamlessly incorporate it into their co-op marketing program. Greater emphasis is needed on under-utilized digital tactics such as SEO, SEM, display and local digital listings.
- Co-op media mixes need to reflect the new market dynamics - While continuing to support programs that incorporate print, broadcast and outdoor media, co-op programs need to expand to encompass promotions, spiffs and digital friendly tactics that help drive traffic and boost sales.
- Offer diagnostic and planning tools - Lack of planning is the slippery slope that leads to wasteful marketing. Brands need to take the lead in educating their customers on the marketing tactics that will result in more sales. By providing diagnostic tools to help customers optimize their marketing media mix and planning tools to help them map out their campaigns and marketing efforts to maximize results, brands can ensure their key messaging is reaching regional and local markets in the most comprehensive and cost effective way.
- Create turnkey programs will help drive co-op participation - The more work it takes to execute marketing programs, the less likely they are to succeed. Even the most motivated participants may not have the skills to effectively plan, create and execute on marketing programs in a systematic way. Particularly in the digital marketing arena, co-op participants need assistance and resources to keep up with best practices and content production. Other good candidates for turn-key programs include promotions and sales spiff. Programs that take the planning, creation, execution and ROI reporting off the shoulders of your customers will result in better participation.
- Lend a hand - Small business owners may find the prospect of planning, creating and executing on an integrated multi-channel marketing campaign a bit daunting with the excess of other tasks vying for their time. You will likely here things like “I’m overworked and don’t have time to think strategically about marketing,” or “Planning is overrated. I just need to get these projects done.” Providing resources that can help your customers with subject matter expertise, learning to use your tools or just navigating the program rules and processes can help improve participation. With today’s cost-effective collaboration tools, it easier than ever to provide assistance in real-time.
- Make your data actionable - Co-op marketing programs done right can provide a wealth of information about your customers marketing behavior and how that translates into sales. At a minimum, co-op programs must track and analyze how the money is being spent and how effective their programs and campaigns have been so that they can continually improve their programs and campaigns. Ultimately, tying co-op programs, media mix and market spend to sales lift provides powerful insight and much needed ROI metrics for corporate management.
- Take advantage of mobile/digital tools – When it comes to co-op administration, from complicated rules and review processes to lengthy reimbursement processes, there is plenty of complexity to go around. With business apps, smart phones, scanning, cloud storage and collaboration tools – you can streamline your processes, shortening the co-op claiming process to days versus weeks or months.
- Rewrite the rules – If all else fail, take a long hard look at your compliance requirements. A full audit of your program to see where the risk is high and where you can feel confident without the stringent requirements, may uncover some ways for you to make the process less cumbersome without increasing risk.
Co-op marketing remains a viable and strategic component of the brand marketing portfolio. Making tweaks to bring your program up-to-date with the new realities around digital and content based marketing campaigns and providing the support needed to optimize the use of these channels will not only increase participation in your program but improve the overall performance and ROI of your co-op program.
We would love to hear your thoughts.