4 Mistakes Even the Best Manufacturers Make
Ever hear that old saying “you can’t have your cake and eat it too”? If I were to guess, I’m sure you have. In many regards, these are wise and wonderful words to ponder.
But as brilliantly insightful as those words stand true, they serve no relevance regarding Co-op (Cooperative Marketing Funds). That’s because when a manufacturer implements a Co-op incentive program for its channel partners, a two-way street of opportunity and success, surfaces.
Partners deploy a hefty amount of elbow grease into marketing their brands, so when their efforts are rewarded by channel manufacturers, it creates a win-win situation. Manufacturers reach a broader scale audience through co-branded association and can spend less money on in-house advertising efforts, while channel partners can build a stronger marketing campaign, increase sales and extend brand awareness.
Equally Shared Benefits of Co-Op Funds (Between Manufactures and Channel Partners)
- Reduced marketing expenses
- Increased awareness of product and brand
- Increased brand loyalty between product and brand
- Fortified marketing strategies
- Increased ROI
It’s evidently clear that when implemented correctly, Co-op programs work, and work for all parties involved. But for various reasons, channel partners don’t seem to be taking advantage of these extremely valuable incentives due to a “lack of participation.” Channel manufacturers reportedly spend 50 billion dollars on Co-op programs each year for distributors, resellers and retailers—but only a small percentage actually retain the money that’s available. Why is that? Why is such a fruitful, effective and simple incentive so difficult for channel partners to “reap the benefits of?”
Here Are The 4 Top Reasons Why Your Co-Op Program is Failing:
1.) Too Many Regulations, Too Much Jargon:
Like you, your channel partners are busy. And because some of the terminology may be foreign to their vocabulary—confusion rears its ugly head. When people are confused by program qualifications and interpret your incentive program as more of an obstacle and less of an incentive, they tune out.
2.) “Open-to-Interpretation” Guidelines:
On the contrary to too many regulations, program rules which are not descriptive enough or present objective scenarios instead of subjective guidelines are equally damaging.
As a manufacturer, you are well-versed in the subject matter of incentive programs. However, your channel partners might not know one darn thing about them. Measuring sales, allocating funds, analyzing metrics and simply understanding the process of the sales funnel could well be the biggest hurdle when deploying your Co-op marketing campaign.
4.) Traditional Practices
Managing Co-op funds via traditional methods such as Excel spreadsheets, chicken scratch reports, emails and phone calls can easily manifest into chaos.
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