Co-Op Reseller Adoption: Fixing the Five Biggest Co-Op Advertising Program Issues

Co-op Reseller Adoption
Fixing the Five Biggest Co-Op Advertising Program Issues
For national brands with co-op marketing programs

Across the board, 50% of the co-op advertising dollars corporations and manufacturers offer to their resellers, aren’t being utilized.
This significant statistic indicates thatsomething clearly isn’t working in the co-op advertising ecosystem…
FACT:

MOST COMMONLY STATED CO-OP MARKETING GRIPE:
“I’ve instigated a fantastic co-op advertising program…
Why aren't my resellers taking advantage of it?”
COMMON FOLLOWUP QUESTION:
“Why does reseller adoption even matter to my corporation?

Why is Reseller Adoption Important?
FIRST,
it’s crucial that you understand how important reseller adoption is to your corporation. Fostering and increasing adoption can and will significantly impact your bottom line, while also boosting that of your resellers at the local level.
once you determine that you are ready to improve your current co-op program, you must carefully consider how to track its overall effectiveness.
SECOND,

Monitoring Key Performance Indicators
Every Co-Op Advertiser Should
track the overall effectiveness of their (your) program…
Monitoring a suite of key performance indicators (with return on investment (ROI) being the ultimate measure) will help you get started.
NOTE: Many co-op advertisers mistakenly leave reseller adoption rates off their list – without understanding your adoption rate, there’s no hope for improving it.

Three Important Questions
GETTING STARTED…
The following three questions will help you understand how tracking and focusing on your reseller adoption rates can shape your co-op advertising strategy and improve overall performance…

Question 1 – Usability
QUESTION 1:
Why You Need To Address This Question:
Your overall reseller adoption percentage is the ultimate measure of the “friendliness” of your program. At a macro level, it’s an indicator of the:
Reseller awareness of your program
Commitment of your sales force to the program
Creative and financial flexibility within the program
Ease-of-use of the program
IS YOUR PROGRAM USER-FRIENDLY?

Question 2 – Budget
QUESTION 2:
A co-op advertising program likely represents a significant financial and resource investment. A low adoption rate means these investments are not being effectively leveraged across the entirety of your reseller network.
IS YOUR PROGRAM A GOOD
USE OF YOUR BUDGET?

Question 3 – Accessibility
QUESTION 3:
Co-op advertising programs with low adoption rates are typically slanted to serve larger retailers, often ignoring smaller, independent resellers. As channel consolidation continues – especially in retail and technology – it becomes increasingly important to build out smaller channel partners to mitigate the risk of relying too heavily on specific channel partners.
IS YOUR PROGRAM ACCESSIBLE
TO ALL PARTNERS?

MOVING FORWARD….
Now that you have a better understanding of how tracking and focusing on your reseller adoption rates can shape your co-op advertising strategy and improve overall performance….

Moving Forward
LET’S LOOK AT….
The Key Issues that Hinder Your Program’s Reseller Adoption Rate
What Steps You Canand Should Take to Boost Overall Results

Key Issues Impacting Reseller Adoption
ISSUE #1:
Expense vs. Investment
Goal Misalignment
Low Reseller Awareness
Limited Creative Options
Administrative Burden
ISSUE #2:
ISSUE #3:
ISSUE #4:
ISSUE #5:

Most manufacturers view their co-op advertising program as an expense, rather than as a long-term investment that they are making in their brands and its overall market visibility.
With this misguided mindset, a middling 50% adoption rate can hastily be brushed off as insignificant.
Issue #1: Expense vs. Investment
ISSUE #1:

THE PROBLEM:
When manufacturers look at their co-op advertising program as an expense rather than an investment, they’re not just “OK” with a low adoption rate – they prefer it!
In their minds, the math reads something like this:
[Revenue from Resellers - Co-op Advertising Costs = Total Revenue]
For organizations that view co-op as an investment, the math looks quite different:
[Co-op advertising investment x Return-on-Investment = Total Revenue]
In the second model, you can see that the key is measuring and maintaining a consistent and repeatable level of ROI for the co-op program. This model COMPLETELY changes the strategic mindset of the entire organization!
Takeaway: Increased Program Investment = Greater Overall Revenue

THE SOLUTION:
Step 1: Segment your reseller base into at least three tiers and look at your metrics based on these tiers:
Tier 1: First 20% of Total Reseller Revenue
Tier 2: Middle 50% of Total Reseller Revenue
Tier 3: Last 30% of Total Reseller Revenue
Step 2: Track the adoption rate and correlation of co-op investment vs. revenue driven (ROI) on the above tiers and update accordingly, on a quarterly basis.
Step 3: In your quarterly update, include an action and investment plan for each tier. Each plan should indicate the opportunities available within that tier and the expected return for the corresponding investment.

THE RESULTS:
The simple approach of using defined tiers to segment your partner base and to measure ROI gives you a clear perspective on the performance of your co-op advertising program. Layering in an action plan and the expected ROI for each tier does two things:
It makes it simple for your organization to understand the investment value of each tier
Simplifies the application of resources needed to realize the associated returns

Goal Misalignment
In an unproductive co-op advertising program, the goals and incentives of the product manufacturer and the reseller do not align.
Issue #2: Goal Misalignment
ISSUE #2:

THE PROBLEM:
By nature, the vendor/reseller relationship is both cooperative and competitive. In the context of a co-op advertising, this can spur competing business objectives…
PRODUCT MANUFACTURERS (VENDORS) WANT:
Increased sales and brand awareness for their products
Strict adherence to brand guidelines and control over messaging, tactics and creative at the local level
Rock-solid financial control and predictability
RESELLERS WANT:
Increased sales and brand awareness for their business, often independent of national-brand associations
Flexibility to execute tactics and materials that they know will work in their market
Simplified processes and quick payment/repayment transactions

THE SOLUTION:
Step 1: Perform an annual reseller satisfaction survey with your co-op participants. Identify the areas that require improvement, fix the issues and then communicate the actions you took to your resellers.
Step 2: View your co-op program as your key competitive advantage in the channel – every customer engagement your reseller makes using the program means one less engagement with a competitor. Instead of demanding compliance – entice participation!
Step 3: Review your documentation processes from beginning to end with the goal of removing absolutely anything unnecessary. Focus on moving to
a primarily digital interaction and increasing the speed of your payments
by 50%.

THE RESULTS:
By understanding the objectives and challenges your resellers have – and by reshaping your program to address these issues – you’ll come away with a happier, more profitable and increasingly loyal reseller base.

Resellers are generally unaware, unsure or dissatisfied with how the co-op marketing program operates. In addition, they often lack an understanding of how the program can benefit them.
Issue #3: Low Reseller Awareness
ISSUE #3:

THE PROBLEM:
While “low reseller awareness” might sound like a clear, straightforward issue, it’s important to note that your “unaware” resellers often fall into three distinct categories…
TRULY UNAWARE – Those who don’t know that the program exists
AWARE BUT UNSURE – Those who know that program exists but are unsure (or have a misguided understanding) of how it works
AWARE AND DISSATISFIED – Those who tried the program and found it unsatisfactory

THE SOLUTION:
Step 1: Develop an activation campaign that considers each of your segments and proactively brings them into (or back into) the program. Tailor and target it for your three identified reseller categories and your reseller tiers (identified in Issue# 1).
Step 2: If you have a distributed sales/marketing team, engage them in your program and reseller activation process. These teams are the mouthpiece for your company – if you can sell the benefits of the program to them, they’ll translate it to your resellers.
Step 3: Create marketing materials around the program. If you approach this as a consumer-oriented campaign and effectively pinpoint the features and benefits of the program to your audience, you’ll drive success and activation.

THE RESULTS:
In the short-term, increasing the overall awareness of your program can and will have the most immediate impact on your adoption metrics.
Consider this the low-hanging fruit of reseller adoption!

When polled, resellers often report that their co-op advertising program’s lack of creative options hinders their participation.
Issue #4: Limited Creative Options
ISSUE #4:

THE PROBLEM:
‘Limited creative options’ ranks near the top of reasons resellers don’t participate in a vendor’s co-op advertising program.
Once a vendor understands that their partners have their own brands that they need to support and promote, the vendor should strive to incorporate increased creative flexibility.
Unless you provide partners with the ability to efficiently and effectively promote both brands, their likelihood of adopting your program is slim.

THE SOLUTION:
Step 1: Don’t just repurpose your national advertising materials for your partner program – develop specific creative with partner customization in mind.
Step 2: Make development of partner creative a fundamental part of new product introduction. Vow to never again introduce a new product into the market withouthavingsupportive reseller advertising materials available through the program.
Step 3: Tier the creative options so that templates with a higher percentage of real estate dedicated to your brand (versus your resellers) are reimbursed at a higher rate. Give your partners flexibility in the level that they want both brands to play.
Step 4: Don’t limit your creative templates to one or two mediums. Your partners are developing integrated marketing strategies across multiple mediums (email, direct mail, sales sheets, TV, websites, billboards, etc.). Ensure your creative pieces
represent this variety.

THE RESULTS:
The program becomes a win-win for both parties!
By increasing the flexibility of available creative templates and providing your partners additional choices within these options, you’ll see a significant increase in partner participation.

Many partners choose to refrain from their co-op advertising programs due to their program’s needlessly lengthy business processes and ever-increasing administrative burden.
Issue #5: Administrative Burden
ISSUE #5:

THE PROBLEM:
The administrative burden placed on the reseller is the single most commonly quoted reason for not participating in a co-op advertising program.
Additionally, programs that are administratively heavy for the reseller also carry a significant burden to the vendor – resulting in a high workforce or outsourcing costs.

THE SOLUTION:
Step 1: Offer your resellers a complete end-to-end, web based solution that incorporates creative with media planning and buying. Under this model you can incorporate instant discounts on specified activities, which can nearly eliminate payment delays and automate proof-of-performance reporting for both parties.
Step 2: Be overly transparent with your approval and claim processes so partners know exactly what to expect.
Step 3: Provide and promote online and live help options. Offer webinars to train resellers on using the platform, and provide best practices and guidance for designing effective local marketing efforts.

THE RESULTS:
By removing the administrative burden and automating everything possible, you’ll not only remove the single most limiting aspect of your program – but you’ll also remove significant costs from the equation for both you and your partners.

Conclusion
THE CONCLUSION:
A well-run strategic, co-op advertising program can be the single most effective demand generation tool in a product manufacturer’s arsenal.
With your reseller adoption rate as the key indicator of the value that your co-op advertising program is delivering – it is time to begin reshaping and improving yours.

Conclusion – Next Steps
NEXT STEPS:
If you haven’t already, take a moment to address the five key issues that are hindering your program’s reseller adoption rate.
Your identification and analysis of these five crucial issues will prepare you to reshape and dramatically improve the effectiveness of your co-op advertising program.
Goal Misalignment

TO LEARN MORE:
To gain insight on how to translate
your national strategy into local
execution, visit www.balihoo.com/icm
and download our free ‘Integrated Co-op
Marketing’ white paper.
To see Balihoo’s innovative Co-op Marketing
and Local Marketing Automation solution
in action, join one of our daily live demos:
www.balihoo.com/demo-page
To learn how Balihoo’s Integrated Co-op Marketing software and services solution, check out www.balihoo.com/co-op-marketing.

ABOUT BALIHOO:
Balihoo is the premier provider of Integrated Co-op Marketing technology and services to national brands with local marketing needs. Balihoo brings enterprise-class marketing to the local level and gives national brands full visibility into all local marketing activities and results.
For more information on Balihoo’s Integrated Co-op Marketing solution please call 1-866-446-9914 or visit us at www.balihoo.com.
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Co-Op Reseller Adoption: Fixing the Five Biggest Co-Op Advertising Program Issues

by Balihoo, Inc. on May 28, 2010

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Co-Op Reseller Adoption: Fixing the Five Biggest Co-Op Advertising Program Issues — Presentation Transcript