Co-op Dollars – Don’t Let That Money Get Away

I’m a little late in the season, but this is a reminder to businesses who purchase products from manufacturers and distributors, check your co-op dollar balance!  You may be pleasantly surprised at what is available and you may lose access to the money if it’s not spent before the end of the year.

WHAT IS A CO-OP PROGRAM? 

 Cooperative (also referred to as” co-op” or “coop”) programs are typically designed by manufacturers as an incentive program for distributors and dealers to purchase product during the year.  Most co-op programs are based on an accrued value, a percentage of the purchases made during the course of the year.  For example, a distributor who purchased $1 million in product from a manufacturer offering a 4% co-op program may be entitled to $40,000 in their co-op fund.  Typically, there are restrictions on the fund usage.  Sometimes the fund is a co-op credit balance to purchase additional product.  Sometimes the fund is a co-op advertising balance to assist in the cost of advertising product.  Either way, it’s important to understand what is available and what guidelines are in place on the usage of the funds.

WHERE DO I BEGIN? 

If you are a distributor, you should contact your manufacturer rep and request information about available co-op programs and what your current fund balance is.  If you are a dealer, you should contact your distributor first and then possibly contact the manufacturer if you require additional information.  Often times, the distributor is the custodian of the dollars because they accrue directly from the manufacturer.  In this case, dealers need to discuss with the distributor how to mutually benefit from the fund. 

THERE MAY BE MULTIPLE FUNDS AVAILABLE. 

When a manufacturer makes a big push for a product, they will often offer special co-op promotions to assist distributors and dealers in marketing the product to consumers.  These special promotions are usually deadline sensitive, available only for specific media formats and often times will have guidelines associated with the advertising creative.  Likely, there are “canned creative” templates produced by the manufacturer which feature the product and allow dealers to include contact information.  Sometimes, multiple dealers can participate in the same advertisement, further diluting the cost per dealer.  There may be a general co-op fund and special product co-op funds in place, so it’s important to be aware of what is available.

WOULDN’T I HAVE HEARD ABOUT THIS ALREADY? 

It’s definitely possible that if you haven’t heard about a co-op fund, there isn’t one available.  Often times, however, the information doesn’t channel to all parties and it never hurts to ask.

I’M TOO BUSY TO DO THE RESEARCH, ESPECIALLY THIS TIME OF YEAR. 

 In this case, you may find allies in your media and marketing partners.  Media reps would benefit from an advertising buy as a result of uncovering available co-op advertising dollars and may be willing to put in the leg work to uncover information.  Or you can ask a marketing consultant (like me) to help you.

Trick or Treating or Hot Leads?

First off, Happy Halloween to everyone!  Please be sure to have fun and be safe.

While you’re having fun and being safe, I ask you to think about the following.  Whether you are taking your kids out and knocking on doors in the neighborhood, opening your door for the local trick-or-treaters, or partying it up at your friend’s annual Halloween Party; what makes it a different day than the one before or the one after?  I mean on this particular day, why is it acceptable to knock on as many of your neighbor’s doors as you can get to and ask for candy?  Why do you feel the neccessity to open your door many times to people you may not even know and give them candy?

I would assume the answer from most people is that it’s tradition; it’s acceptable and therefore okay to ring your neighbor’s bell and demand candy.  If the lights are out on the house, you pass by.  If the lights are on, there better be candy.

So, let’s look at this from a sales and marketing perspective.  These are hot leads, people!  On Halloween night there are literally millions of people out there completely willing to give you their candy and all you need to do is show up in costume and knock on their door.  The PR campaign works, the marketing is compelling and all that remains are bewildered residents willing to hand over their goods at no cost.

My point is that every business can create its own Halloween, or multiple Halloween’s.  CPA’s do it around March.  Retailers do it in the fourth quarter.  Regional magazines do it with their “Best of Issue”.  You can do it, too.  You just need to craft a compelling story to get people interested, show value and keep building on it.  If candy were contracts, your sales people would want every day to be Halloween.

Diablo magazine’s 2009 Food Awards Presentation (video)

(Most of) The Diablo magazine 2009 Food Awards presentation on Monday, October 26, 2009.

The Benefit of a Marketing Review

As a part of the process of approaching new relationships at Meriam Media Solutions, we often begin with a review and analysis of our clients’ marketing strategies.  We try to put ourselves in the shoes of the business owner, their customers and their prospects in order to effectively evaluate current and past endeavors.  Our goal is to provide options to save time, save money and optimize their marketing strategy to meet objectives. 

We recently conducted a marketing review for a client and proposed options which will significantly improve their ability to communicate with customers, increase traffic to their website, allow for fixed cost scalability as their client list increases and immediately save more than $9,000 a year when compared to their current marketing strategy.

THE SITUATION

Our client is in the home industry and after more than 30 years in business has a database of more than 20,000 customers.  The client has used direct mail to communicate with customers and inform them of upcoming promotions, events and new product.  Our client’s objectives include reaching a younger demographic, increasing their customer database and redesigning and increasing traffic to their website.  Ideally, the client would like to accomplish this without adding to their current budget.

THE PROBLEM

Direct mail can be an effective means of communicating to customers but it is expensive.  Our client’s direct mail budget is approximately $48,000 annually for design, printing and postage.  Each new customer record added to the database costs approximately $2.40.  Additionally, the frequency of communicating to customers is constrained by budget.

THE SOLUTION

During the marketing review, we uncovered that 5,000 of the client’s customers have provided email addresses.  As an option, Meriam Media Solutions proposed converting those customers from the direct mail program to an email program.  The estimated cost per customer for an email program is 47 cents compared to the current $2.40 per customer for direct mail.  Additionally, we proposed that new customers should be added to the email program (in the event they resisted providing  email, they could be added to the direct mail program).  Increasing customer records in the email program would incur no additional cost for the first 5,000 new records and after, only increase costs nominally due to hosting fees.  Finally, the email program is not restrained by space for content (like print is) and can be hyperlinked to drive traffic to the client’s redesigned website.

THE RESULT

The proposed email conversion program will initially save the client $9,300 (based on 5,000 records).  Each current direct mail customer that provides an email address will save the client $1.93 for an additional potential savings of $28,950 (based on converting the remaining 15,000).  Converting to an email medium to communicate with customers will allow the client to deliver more content, increase the frequency of their promotions, drive more customers to the website and potentially save up to $38,250 in direct mail expenses.

The Online Marketing “Tipping Point” for Many Small Businesses

 

For small businesses, there is a fine distinction between having a “digital presence” and leveraging your online presence to ring up sales.  In many cases, it only takes a small push to start seeing real results.  We recently helped a San Francisco Bay Area home improvement contractor make the transition.

THE SITUATION

The client was the clear Bay Area market leader in their category of home improvement. The owner invested approximately 20% of gross sales in magazine advertising to brand the business and produce call-in leads. For the past 4 years, this marketing approach filled the owner’s calendar with an average of 12 consultations a week. The owner also invested in a website which acted as his online brochure with information about his business and images of completed projects.

THE PROBLEM

In late 2008 and early 2009, the magazine leads reduced significantly. The owner continued to invest in advertising but by May 2009, he was forced to reduce his spending in order to maintain payroll, given the lack of business. This reduction in spending reduced the size and frequency of his ads and their positioning in the magazines, which resulted in an even further reduction in leads as less readers were exposed to his message. The owner turned to Meriam Media for advice.

ANALYSIS

Meriam Media started with a holistic review of the client’s marketing and sales strategies and discussed goals and achievement benchmarks for the client. The primary goal was to generate quality leads. This goal needed to be accomplished with a minimal investment outlay that could be easily scaled based on results. The secondary goal was to position the client to remain the market leader in the longer term and to pick up market share from any competitor fall-out.

SOLUTION

Meriam Media identified the digital space as the optimal medium for the client to generate leads through a scalable marketing strategy which would also enhance their position as a category leader. The first step was to optimize the client’s “brochure” website into a 24/7/365 lead capture tool. The second step was to create scalable online advertising campaigns to drive traffic to his website and capture qualified leads. The third step was to create a PR campaign to consistently produce content which is relevant to the client’s prospective clients and positions the client as an industry expert.

RESULTS

Meriam Media optimized the client’s digital marketing by:

• Creating lead capture on his site for interested consumers to easily set up appointments
• Incorporating tracking mechanisms to evaluate the performance of the client’s digital marketing efforts
• Building out and managing social media sites such as Facebook and Twitter to communicate more effectively with customer and prospects
• Launching targeted, scalable cost-per-click advertising campaigns on major media networks
• Creating a publishing calendar and developing content to educate his market
• Building out article links and blog sites to distribute the custom published content
• Manage his digital marketing strategies on an ongoing basis

The entire digital marketing campaign investment outlay is only a fraction of his previous advertising budget. After launching the program on July 1, the client has significantly increased the amount of visits to his website, received on average of 7 leads per week and has achieved an after-margin return on investment of more than 250%.

 

Diablo magazine’s 2009 Food Award Winners

View of Mt. Diablo from 555 YVR rooftop

 

On Monday, October 26, I attended Diablo magazine’s 2009 Food Award presentation on the rooftop of 555 YVR in downtown Walnut Creek.  I respect the approach that Diablo magazine takes to recognizing the top SF East Bay restaurants.  They don’t just pick their favorites or focus on the latest fad.  The process starts where it should, with the magazine’s readers who submit their favorite restaurant picks way back in July.  Then, Diablo sends out judges to review the restaurants which received the most reader votes.  This year’s judges were:  Bruce Aidells, Lynne Char Bennett, Nicholas Boer, Gene Burns, Dorothy Calimeris, Michaela Jarvis, Mollie Katzen, Leslie Sbrocco and Josh Sens.  That’s a pretty solid representation from Bay Area media. 

Diablo editor, Susan Safipour presented the awards to the top restaurants:  Esin, Corso, Prima, Chevalier, Va De Vi, Artisan Bistro, Wente, Incontro, Peasant and the Pear and Koi Garden.  Diablo group publisher, Barney Fonzi toasted the restauranteurs in appreciation of their hard work in providing the SF East Bay with excellent dining venues.

As I chatted with long time friends from the magazine and various restaurants, I was impressed by the conversations between the restauranteurs.  Congratulations were of course the topic, but it went beyond that.  They spoke about how much they enjoyed their last dining experiences at the respective restaurants and how they loved recent menu additions.  There was respect and camaraderie in the midst of competition.  Operating a successful restaurant is likely one of the most challenging business endeavors.  They have to produce an experience that is unique, welcoming and balance consistency with innovation.  It was clear that the common ingredient of these successful restaurants is that they truly love what they do. 

View of Mt. Diablo from 555 YVR rooftop

Curtis, Esin, Andy and Amy of Esin Restaurant