Building
Your Business With Co-Op And Co-Branding Advertising
by Tom
Egelhoff
If
you've been in
business long enough to have developed a
relationship with vendors and suppliers
then it may be time to consider co-op
and/or co-branding advertising. These two
methods will help you advertise your
products at a lower rate by having another
entity picking up part or in some cases
all of the advertising expenses.
Let me begin by
defining each term and then I'll deal with
how to use each one individually.
-
Co-Op
Advertising: In
this form of advertising a retailer
would promote a specific brand of
merchandise that the store carries. A
clothing store might promote a
designer brand of clothing. Since the
ads would be designed to sell more of
that brand of clothing then the
manufacturer will pay part or all of
the advertising costs. In some cases
the manufacturer might produce all the
ads with a spot in the ad for the
store name, hours, phone, etc.
-
Co-Branding
Advertising: One
of the most common forms of this kind
of advertising is a brand of soft
drink promoting the NutraSweet®
sweetener. In a local small town it
might be as simple as the local video
store teaming up with a pizza shop and
giving out each others coupons.
Usually co-branding creates an
additional benefit for the consumer.
The pizza buyer would receive a
two-for-one movie rental coupon with
the pizza or the movie renter would
get a $2.00 off on their pizza order.
As you can see there
are advantages to both kinds. And
sometimes they can be used together. So,
let's look at each one in more detail and
how to make them work for you.
Co-Op
Advertising: Two rules to know
The two things you need
to know right off the bat about co-op
advertising. One, is that most vendors are
not going to come screaming to you that
they have co-op money available. And, two,
it make take a while for you to get your
co-op money. These payments sometimes take
forever to work their way through the
approval system. But once you begin using
co-op on a regular basis even though it
may be six months later your monthly
checks should start showing up. Pin your
vendor down about when to expect payment
and get it in writing if possible.
Make
the contacts
The first step in your
quest for co-op money is to contact
everyone who supplies you with products
and find out what their co-op procedures
are. Usually they are going to be pretty
strict. Their logo has to be a certain
size, perhaps certain colors, and other
restrictions. Before going to the expense
of an ad make sure you submit it to the
manufacturer and get their written
approval before placing it.
Don't for get to check
with your local media. Radio, TV and other
media often give co-op if they are
featured in your ads as well. After all
they advertise too.
Know
the rules and follow them
I mentioned this above
but I should enforce it more strongly
here. These folks will not give you any
money if you stray even slightly outside
their guidelines. They are extremely
strict and you must follow every
instruction to the letter or you give them
an out not to pay you. It's not that
companies are out to get you to pay for
their ads but they want their business
presented in the best light possible.
Bottom line. Get
everything and I mean everything in
writing. And submit copies of all ads and
approval documentation with your co-op
request for payment. This will also speed
up your payment in some cases.
Don't
forget why you're doing this
Yes, you are promoting
a brand name but don't forget that the
principle reason for the ad is to make the
customer contact your business. Your space
in the ad may be limited so make sure that
your business information is displayed as
prominently as possible. The whole reason
for the ad is to get business for you not
the manufacturer. If you get it so will
they.
The
more you give the more you get
Keep accurate records
of how much product and how much co-op you
use. If your co-op is successful then the
company may increase their share of the
money they share with you. The more you
buy the more they will give you to grow
your business.
Know where the breaks
are. In some cases you may get more co-op
money if you got up one more level. The
added expense will probably be much less
than the cost of the advertising and the
increased business it will produce.
Take
the bull by the horns
If you check with your
suppliers and they do not offer co-op
advertising perhaps you need to make a
proposal and show it to them and ask them
to consider starting a co-op program. The
worst thing that can happen is they may
say no. But they may also say yes too.
Co-Branding:
Rules to remember.
The first and most
important rule: You are hanging your name
out there with someone else. You must be
sure that they are above reproach. If they
have a scandal or public relations problem
it suddenly becomes your problem to. So is
you have reason to believe that a "60
Minutes" camera crew may show up on
your doorstep then this is not a company
that you want to do business with.
Your customer base is
going to be affected by any alliance you
make. So make sure that any company you
deal with has the quality and service that
your customers are accustomed to.
Who benefits?
Before entering into
any relationship you must feel confident
that it is mutually beneficial to both
parties. And the products or services
offered must provide a worthwhile benefit
to both parties. What if your customers
really like your side of the arrangement
but the other side is resistant after
awhile and decides to end the
relationship?Some things you'll need
to consider are: Is this a long term or
short term arrangement? Do both companies
have the ability to supply needed products
and services equally? Are both companies
strong financially in case of economic
problems or slow sales periods?
Get
it in writing
For most people in
small towns a handshake is probably enough
for a binding agreement. For most of us
our word is our bond. But I have noticed
that there are attorneys in small towns
too. So just to make sure that there is no
misunderstandings it's always a good
practice to write down what each party is
going to do. You may not have to have a
lawyer involved but if it's a substantial
commitment it never hurts.
It's
a partnership
Make sure you can get
along with the person you are co-branding
with. You are in essence creating a
mini-partnership and both of you will have
a say in advertising and other financial
concerns. The up side is that a successful
mutual respect may be your reward along
with your business profits.
Set
goals and objectives
What is expected from
this joint venture? Sales objectives must
be set and met that are agreeable to both
parties. A method of measurement must be
set up that will demonstrate the success
or failure of this program. Cross training
of sales people may be necessary so they
understand the pros and cons of both
businesses.
The last
word on co-op and co-branding advertising.
As you can see each of
these two methods of advertising has some
good and bad parts that may or may not fit
your business. The co-op advertising
should help the small store owner and the
co-branding the larger company.
The best feature of
both is that there is more exposure of
your business at a lower cost and one of
my goals is to keep advertising costs low
but profits high. Co-op advertising is a
great way to test advertising at half the
cost plus the co-op advertiser has a track
record of testing the co-op ads they use.
So take advantage of this "free"
money and put it to good use as you build
a successful small town business.
ABOUT THE AUTHOR:
Used With Permission
ß Eagle Marketing PO Box 271 Bozeman, MT
59771-0271
http://www.smalltownmarketing.com - (406)
585-0219
email: tommail@smalltownmarketing.com
| 
.
