Co-op Marketing - BrandMuscle
What is Co-op Marketing?
November 11, 2020

What is Co-op Marketing?

Co-op marketing is a strategy for scaling a company’s marketing program across multiple locations by sharing brand assets and marketing costs with channel partners. A successful co-op marketing strategy exchanges resources in a way that’s mutually beneficial to both the corporate brand and independent channel partner, who may be a franchisee, dealer, retailer, or other type of small business owner.

How do Co-op Marketing Programs Work?

Brands rely on channel partners to drive sales and awareness at the local level, but channel partners often lack the time, knowledge, and resources to develop and execute an effective marketing strategy on their own. In fact, 53% of partners don’t know much about marketing, according to the State of Local Marketing Report.

To solve for this, co-op marketing programs provide a set of rules for channel partners to access corporate funds and marketing materials. The rules are in place to ensure local marketers use the brand assets properly and don’t misrepresent the brand with marketing materials that have not been approved by corporate or legal. Some co-op advertising programs may have rules around which vendors partners can use; incentives to guide partners toward the most effective tactics; and processes for submitting claims and receiving reimbursement. Co-op funds can be used for anything from point-of-sale displays, to digital ads, to promotional tchotchkes, or even rent, although it varies by program.

In many scenarios, a brand develops the messaging for a corporate campaign, then distributes the campaign marketing materials to channel partners through a co-op marketing platform. Depending on the sophistication level of the program, the brand assets may be customizable so that the messaging is more relevant at the local level. Channel partners can select which tactics to execute, follow the designated set of rules, and use their co-op dollars to cover the costs. The brand may cover the cost entirely or only partially, as reimbursement levels can vary by tactic. For example, social media ads generate a higher ROI than branded golf balls, therefore a brand may be willing to contribute more funds toward a local social media campaign.

Because channel partners don’t have to come up with the strategy, create the marketing materials, or fund the execution entirely themselves, the idea is they’ll be more likely to participate in marketing efforts. In addition, co-op marketing reduces the effort and resources it takes to scale an advertising campaign. Since the same materials are accessible to locations across the country or even the world, independent channel partners no longer have to invest in creating their own marketing materials or worry about accurately representing the brand.

What are the Benefits of Co-op Marketing?

Co-op marketing programs can require a lot of investment to set up, but the benefits of leveraging a strategic fund management platform to help channel partners market a brand at the local level are often worthwhile. Benefits of a co-op marketing program include:

Lower advertising costs

When marketing and advertising assets are shared through a co-op program, it reduces the brand’s creative expenses. Enforcing the use of pre-approved print providers for point-of-sale marketing materials through a co-op program also streamlines the time and expenses required to produce, store, and ship physical advertisements. Finally, the set of rules provided by a co-op advertising program can help channel partners spend their co-op funds on the most effective marketing tactics so that less money is wasted on tactics that don’t generate significant revenue.

Hyper-local brand awareness

One of the most invaluable benefits of a co-op adverting program is hyper-local brand awareness. Increasing marketing participation among channel partners allows a brand to be activated at the local level, increasing awareness in places that would otherwise be challenging to reach. The sharing of brand and legal approved assets also ensures that the integrity of the brand is not lost in translation, so customers can have a consistent brand experience no matter where they are in the world.

Campaign performance analytics

An advanced co-op fund management platform can provide insights and analytics down to the local level, empowering brands to understand how participants are spending their co-op funds and how their investments are performing. However, brands that are still managing their co-op marketing program with spreadsheets or outdated technology may have more difficulty accessing campaign performance analytics and may not know if partners are spending their funds at all.

Growth

A co-op marketing program can help brands and channel partners alike grow by driving sales and brand awareness. In fact, the State of Local Marketing Report found that partners whose businesses grew 10% or more attribute co-op marketing as critical to their success.

Co-op Marketing Best Practices

Not all co-op marketing programs are built the same; many brands struggle with poor funds utilization, frustrated partners, and lackluster ROI. Successful brands often use these best practices as the foundation of their co-op program:

1. Provide transparency into available funds

If channel partners can’t see their funds, they won’t use them. Provide transparency into available funds so that channel partners realize they have resources available and are more inclined to spend their co-op funds. One way to do this is by managing your co-op with an easy-to-use platform that automates funds availability and sends email reminders for partners to engage with the marketing program. If it’s overly complicated to check their balance—for example, if they have to email corporate or look through spreadsheets—partners may not even bother.

2. Keep co-op program rules simple

Having too many rules in place to participate in a co-op marketing program can complicate the entire fund management process for channel partners and discourage them from marketing at the local level. The most effective co-op marketing programs have simple approval processes so channel partners can receive reimbursement quickly, straightforward guidelines for using brand assets and tactics so partners know what expectations they must meet, and flexibility to use different vendors for fulfilling their needs.

3. Offer ongoing marketing support to channel partners

Research revealed 58% of partners feel training and education about marketing is limited. Because many channel partners do not have the know-how or human capital to take advantage of modern marketing tactics, offering ongoing support is crucial for equipping them to get their marketing off the ground. Some brands provide regular training sessions, others have an agency partner that can help with the finer details of executing local marketing, like demographic targeting for digital ads or content creation for social media. Another way to support partners is by giving them access to pre-approved customizable artwork that they can easily tailor to their specific location and audience.

Co-op marketing mistakes to avoid include lengthy ad approval processes, claims processes with lots of paperwork, confusing reimbursement requirements, unclear brand guidelines, manual or outdated fund management systems, and lack of incentives for partners to put co-op dollars toward the most effective tactics.

Want to learn if co-op marketing is right for your brand?

Contact BrandMuscle to learn more about how to build a successful co-op marketing strategy and activate your brand at the local level with our TCMA software solution.