As a business owner, you have to be ahead of the curve and engage in the latest retail medical marketing trends to stay on top. Co-op Marketing Programs and Reimbursements are an interesting and lucrative trend when employed correctly. Whether you have never heard of Co-op Marketing Programs or have not seen the desired results from such practices, we have the information to help guide you to successfully integrating them into your business!
First let’s go over some basic definitions to help get acquainted with nomenclatures.
What is a Co-op Marketing Program?
A Co-op Marketing Program is a collaboration between a brand and a sales channel partner in which the brand reimburses a portion or the entirety of an advertisement placement done by the sales channel partner. Whether through print, radio, television, or digitally, the partner then advertises the brand’s product through those means.
What is a Sales Channel Partner?
Sales Channel Partners are companies that form partnerships with a brand or manufacturer and agree to facilitate the sale of their products or services. Different types of sales channel partners include retailers, distributors, vendors, consultants, and other organizations.
Now that we have established some terminology, let’s dive deeper into the dynamics and benefits of Co-op Marketing Programs:
Co-op Marketing Programs are cost effective. By outsourcing with this method you reduce advertising costs, as well as ad production and creative costs. Manufacturers, distributors and retailers already have their target markets cornered, therefore when correctly executed this marketing approach saves you time and money! When the costs are shared between both brand and channel partner, the capacity of both parties increases exponentially.
Co-op Marketing Programs are a great way to reach your audience. The combined collaboration between brand and partners is an effective way to reach audiences both new and old. Typically, channel partners do not have the revenue to afford the upfront capital of advertising expenses due to not having large marketing departments. They do, however, have access to loyal audiences, which when combined with the marketing department of brands can create a lucrative and mutually beneficial partnership.
However, there are times when co-op marketing programs do not reach their desired outcome. This can often be attributed to key, preventable factors. Those reasons include:
The channel partner cannot afford to place the advertisements. Typically the channel partner is a small business that does not have access to revenue in the same capacity as the brand. In addition, often times the channel partner has to purchase the brand’s products before profit is made from consumers. Couple this with the pressure of adding ad dollars on the channel partner generally spells disaster for the partnership.
Brands place too much pressure on the channel partner for ad creative. Few small businesses are equipped with the means to create their own advertisements. While the brand may supply the corresponding revenue required for advertising expenses, without the proper creative direction the initiative can still fail.
The reimbursement process for channel partners is unmanageable. Due to the sometimes archaic auditable practices of the companies brands are a part of, there can be delays in when reimbursements are delivered to channel partners. This causes stress on all parties, but especially the channel partners who may already be under financial burden.
By preventing these discrepancies between brands and channel partners, your co-op marketing program has a greater chance for success. In addition, here are some best practices to ensure your co-op marketing campaign is a success:
- Create templates for advertisements that are customizable.
- Enlist co-op advertising with broader marketing campaigns.
- Pre-approved ads help expedite the reimbursement process.
- Establish funding rules early in the partnership.
- Create an automated system for fund claiming and reimbursement requests.
We hope to have provided a better understanding towards what creates a successful or unsuccessful co-op marketing program. If you have any questions or concerns please contact us today!