Budget is a major part of marketing. One strategy channel partners (distributors, wholesalers, dealers, VARs, retailers, etc.) use to control marketing costs is co-op marketing. Through this method, brand assets and marketing cost is shared among channel partners—or it is often wholly funded by the manufacturer. A successful strategy implements resource exchange that is mutually beneficial to both parties. Brands can benefit from their channel partners to drive sales and awareness on a local level. With their superior understanding of the local markets, this can help brands gain net sales as well as the distributors of those brands. Although this strategy is beneficial to both parties, it is not always utilized. Co-op funds that brands offer all-too-often go unclaimed by channel partners. This can be due to a lack of awareness or the belief that it’s too much effort to acquire the budget. Though, when these funds are used, distributors see multiple benefits.
The first and most obvious benefit of this strategy is the lowered cost. Suppliers benefit because their creative expenses are reduced along with the retailers. It also streamlines the process of distributing the advertisements. For retailers, they get to execute effective marketing tactics that use their understanding of the local market. It also increases their budget, which can be used toward creative direction and to expand the reach of the campaign. By distributing a larger amount of marketing materials, the potential for generating more revenue increases as well. To summarize, co-op maximizes return while minimizing the distributor’s cost.
Co-op marketing also has the potential to improve awareness and generate growth. The expansion of local marketing participation allows brands and distributors to solidify their presence. This distribution can increase sales, further helping companies grow. The State of Local Marketing Report found that businesses that saw 10% sales increase attribute the growth to co-op marketing.
The more you use co-op marketing, the easier it becomes to negotiate funds with partnered brands. Campaigns result in significant insight and analytics. This data can show how effective the marketing efforts have been on a local level. Presenting partners with positive analytics encourages them to participate in future marketing campaigns. With successful campaigns, brands may wish to raise budgets as their confidence increases.
The most difficult aspect of co-op marketing is negotiating a budget with partners. That’s why we’ll find the funds for you. At Rivet|MRO, our co-op program specifically focuses on finding unclaimed co-op money that is then used to cover the cost of marketing materials. Meaning you spend nothing while gaining the rewards from your marketing campaign! When dealing with partnered brands, we manage the process from proposal to claim. Once funds are secured, we create effective marketing materials to help you reach your business goals. To learn more about our marketing program visit our website. Contact Rivet|MRO today to see how we can find co-op dollars to use!