Overcoming Unused Co-Op Funds by Channel Partners

Many National brands make the strategic decision to offer co-op to their local channel partners, which is typically a win-win for everyone; create a more localized message and reach consumers they might not have been able to target before. Unfortunately, billions of these available co-op dollars go unused every year. Yes, you heard that right: money is being left on the table and revenue opportunities are being lost.

Seems simple – offer your local partners funds to use towards their local marketing efforts and everyone reaps the benefits. So why are so many channel partners simply deciding not to use the funds that are provided to them?

1.  The legacy Claims and Reimbursement process is too cumbersome and complicated

For the past 70 years or so co-op funds have had the same process in place for requesting and verification of the use of these funds. In many cases busy business owners just don’t want to be bothered. They are tired of fronting the money on behalf of the brand and then waiting 30,60 or sometimes 90 days to get reimbursed. In addition, the rules associated with using the funds can be confusing and very restrictive.

2.  Lack of know-how and time

Not everyone has the experience or the time to negotiate and coordinate media buys and many assume this is a skill that they will need in order to participate in the program. Furthermore, entering the digital world can be quite the undertaking. The mere thought of developing an online presence is enough to scare any new marketer away – SEO, SEM, PPC, oh my! Most local level businesses often wear many hats and it’s no surprise that the marketing cap usually gets shoved to the bottom of the pile due to other priorities in running their business.

3.  Need a more localized and optimized message

The right marketing strategy for the same business model can vary from location to location. What works for a partner  in Joplin, MO, is potentially vastly different from the strategy needed in Chicago, IL. It is imperative to have marketing tactics available for various local marketing needs. As co-op dollars become more available for digital marketing programs, so do the need for greater locally optimized messages. This has been a big pain point in the industry because brands have lacked the ability to provide scalable digital programs at the local level until recently. New marketing automation platforms that cater to digital advertising services have been entering the industry at a rapid pace. They continue to evolve and offer brands an efficient way to execute from a national to local perspective. This trend should continue to motivate the channel partners wanting to participate in the co-op programs, thus increasing the use of these available funds that have previously been unused.

4.   Fear of not being reimbursed

Co-op rules and guidelines can sometimes be extensive, and understandably so. Maintaining a consistent and integrated message across all platforms and levels of an organization is a key component to any brand’s success. Co-op can be a game changer for a partner who wants to participate in a marketing tactic that could offer a great return on investment; however, the fear of not being reimbursed for failure to comply is reason enough for many to pass on great opportunities that are likely to excel their local business. Having a marketing tactic denied for reimbursement can mean the difference between a successful or detrimental month for many partners. End result: co-op dollars go unused and revenue opportunity is lost for all.

In summary, all is not lost. Make it simple to use the money. Offer your partners easy programs to enroll in that offer greater flexibility and more localized offerings. Think about doing the bulk of the work for your partners. After all, you know what works and they need your help to execute. And finally, don’t be so stringent. Work with your partner when challenges arise and don’t ever say; “no, you can’t have the funds because you didn’t follow the program to the tee.” These folks are not only trying to grow their businesses, but if they succeed, they are helping you to grow yours too.

SproutLoud continues to be a disruptive force in driving new and innovative ways to deploy co-op programs. We are here to help when you need it.

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