As a decision maker in your local business, it is not your responsibility to avoid failure; it is your responsibility to seek opportunity.
It is much more costly to your business to miss a profit-making opportunity than to spend your time trying to minimize downside risk. As a business owner, you already know this. There is an implicit cost you will suffer if you are not able to capitalize on an opportunity your competitor is able to capitalize on. This cost is not only a one-time use it or lose it, but it is a cost that has a compounding element to it. The longer you miss an opportunity, the longer your competition has been able to bring in new customers, and thus earn referrals and establish his target market equity stake.
“This is elementary”, you might say. Well, you are right, which is why it is so surprising to me when I consult with my clients and find out that they are so weary and hesitant of advertising.
For years local business has been taught that advertising is some kind of intangible, nebulous, and abstract idea. Perhaps this perception is warranted because there are so many poorly trained sales reps out there who are only concerned with making a monthly deadline and selling their inventory. On a side note, it is for this reason I decided to run my Billboard Connection franchise as an advertising consulting firm.
Introduction to Co Op advertising
The title of this post is using co-op dollars to bolster your ad budget, so for now I will refrain from ranting about advertising sales sloth, and discuss the largest missed opportunity in the arena of advertising. Cooperative advertising is one of the most powerful tools at your disposal to leverage your advertising. Assuming you find an ad-rep who knows what he is talking about and quantitatively analyzed your growth objectives and what results you should expect from your advertising, your next concern should be with securing Co Op dollars from your manufacturers.
Cooperative advertising is a contractual arrangement between your business and your partners (wholesalers, manufacturers, local sports teams, high schools, non profit organizations) where they agree to match your ad dollars at a certain ratio up to a certain dollar amont. It is astounding how many restaurants, moving companies, credit unions, or jewelers do not take advantage of the tremendous leverage offered to them by their manufacturers or wholesalers.
Example of Co Op Advertising: Silestone and Rolex
For example, a GraniteCo buys a certain dollars’ worth of granite product from Silestone, then Silestone will match every advertising dollar of GraniteCo with 50 cents. Silestone must approve the ad, and there are certain design criteria which must be met, but this is a fantastic opportunity for GraniteCo to market to the local market using a nationwide name.
Rolex has a similar program. Since my expertise is out of home advertising, I know that Rolex has a 50% matching program for any jeweler looking to advertise on a Billboard.
Some Co Op is seasonal only. Yamaha boats only offers 50% billboard Co Op from Oct. 1- Sept. 30, and the retailer must claim their Co Op within 120 days of ad run.
Here is a partial list of manufacturers who have some type of Outdoor (out of home) advertising. If you are interested in knowing who the corporate contact is at any of these companies, I would be more than happy to pass their name along to you.
Get the details right – copy details, matching amounts, and compensation plans
Before looking into Co Op, carefully read the eligibility requirements for your intended ad run. It is terrible when your marketing department is working on an ad campaign for 3 months on the assumption that Co Op dollars exist, when in reality you were unaware that your company was not eligible because you did not stock a certain amount of your manufacturer’s product. The best way to be prepared is the request information to be faxed or emailed to you directly from your Co Op corporate contact.
Also make sure that you are aware how much of your gross advertising expense your Co Op deal allows. Liz Claiborne matches up to 50% of a retailer’s outdoor advertising budget year round, but Castrol Inc pays anywhere from 50% - 100% of the ad! Do you own a series of car garages? If so you might, you just might want to consider giving Castrol a call at 410-574-5000 to claim some FREE MONEY. (How many times, in a legitimate context, do you see that capitalized phrase?)
A 100% cap is rare, usually Co Op plans are capped based on a percentage of the amount of total business you have done with a manufacturer. So if you have done $100,000 of business with a supplier, and they have a 2% cap, then they have $2,000 sitting on the shelf for you to claim.
Well, maybe not $2,000 cash - some suppliers might extend a $2,000 credit instead of outright cash. Typically, this hasn’t been problematic for any clients I am aware of because presumably you are doing such high volume of business with them anyway. Lesson: don’t expect a fat wad to arrive in your P.O. box attached to a gift basket (unless of course, you are a client of DunderMifflin).
Using co op dollars to gain the advantage
Remember - your goal is to increase sales x% above your expected growth rate one year from now. By being the first in your market to take advantage of co op dollars you have an incredible opportunity to establish a dominant equity stake in your target market and thus win foot traffic away from your competition. So be proactive.
Shoot me an email and let me know if you are having trouble finding your manufacturer’s Co Op info. Attend your industry’s trade shows, and ask the vendors about their Co Op programs. Most important of all, realize that advertising does not have to be a necessary evil, but an opportunity to leverage money you are already spending.