Why aren’t dealers spending their co-op dollars? This is the number one question on most manufacturers’ ask as we make our rounds at farm and equipment shows. As we’ve worked with manufacturers and dealers, we have developed a unique perspective on the problem, and since we’ve come at this from both sides — we have noticed some systems that work, and some that don’t:
- Co-Op Rewards Based on Last Year’s Sales
Many manufacturers base co-op reimbursement and rewards on a dealership’s annual sales. Therefore you’re rewarding the dealers that advertise with more advertising money. However, you’re also effectively punishing the dealers who don’t advertise. Not much of a motivator.What We Suggest:
Have every dealer present their territory manager with an advertising plan at the beginning of the year. Set goals and deadlines for those dealers to meet. The territory manager checks back before the deadlines. If the goals aren’t met, that co-op money is taken away and given to dealers that will spend it. Don’t let your co-op dollars be wasted by being left on the table.
- Limited Digital Advertising Support
With the boom of digital advertising, the opportunities for small dealerships to advertise online have exploded over the last few years. However, very often we see that manufacturing co-ops only pay for a limited spectrum of digital ad types. And more often than not, these are the older, costlier digital ads. This is where manufacturers are actually making it difficult for their dealers to spend co-op dollars.What We Suggest:
Loosen up the reigns on what digital advertising is allowed to be paid for with co-op money. If a dealer can prove a number of website or impressions that an ad generated, don’t they deserve the payoff for doing the legwork? Again, you simply want the brand name being spread, the products being sold, and the co-op dollars being spent. Why make it a hassle for your dealers?
- Difficult or Frequently Changing Co-Op Systems
Very often when a manufacturer is unhappy with his co-op involvement from his dealers, they often decide to try a different scoring system during the next sales year. However, when three or four years (and three or four systems) move through quickly, the dealers begin to view the co-op as a rigged game — a moving target they’ll never hit. And when dealers stop taking your co-op seriously, you’re sunk.What We Suggest:
Decide on a system for judging and rewarding co-op participation and stick with it. Make it easy and simple for your dealers to work with you. If worrying about changing co-op rules makes selling difficult, they’ll stop paying attention.
- Lack of Priority for Advertising Pre-Approval
Sometimes when dealers create their own ad plans, work up those ads for different channels, and submit them to manufacturers for pre-approval, the ads get lost in the shuffleWhat We Suggest:
Give someone the tools, the authority and the time, to review ad materials from dealers and agencies. Make sure they’re responsive and communicate clearly with everyone involved about how to submit materials, what is required to be co-op compliant, and what to fix if something isn’t quite up to par. Most importantly, make sure dealers and their agencies know you’ve received the materials they’ve submitted and set a clear expectation for when they can expect a co-op approval ruling. There should never be time wasted on the manufacturing side of the co-op!