Co-op funds are advertising dollars vendors supply to you because they want you to market and sell more of their product. These funds are usually based on the percentage
of total purchases you have made from your vendor.
At a loss for how to best utilize this funding? Six IMARK Plumbing distributors share how they use co-op funds for business and channel partner success.
IMARK Today: Share best practices to deploy co-op funds to help drive sales and increase market share.
Yolanda Frank, director of purchasing & inside sales, Equiparts, Oakmont, Pennsylvania: We utilize co-op funds for seasonal sales, company information and t-shirts our reps and employees wear so our supporting manufacturers get lots of exposure to our customers both current and new. Manufacturers that provide us with funds for marketing are emphasized in our winter, spring, summer and fall printed mail promotions and in digital communications such as flipbooks and email blasts. Some promo items are featured in blogs and one-page flyers we call “Product Spotlights” that can be used after the promo ends too. Manufacturers that provide co-op funds can also be featured in more timeless pieces like our company booklet and catalog, both of which we print and display online and distribute to new customer accounts. These will be used for many years to come.
Vincent Lenning, president, Burdine Supply, Mt. Juliet, Tennessee: For our market and our customer base, we have had success with dual branding apparel (shirts and hats) with our logo and a supplier’s logo. This is a cost-effective way for us to give recognition to current customers and also an effective way to generate interest with accounts that we are not currently selling.
Katie Parris, president, The Part Works, Seattle, Washington: We’ve used our marketing co-op funds for customer training seminars hosted in our branch locations. Our customers are so pleased with the training events that our most recent event with Sloan was oversubscribed by 50%. We ended up adding additional seminar sessions and all sessions in both branches were completely full. This model is a win for all. Our manufacturers and other suppliers value the opportunity to connect with end-user customers who have real-world experience with their products. The customers truly value and appreciate the opportunity to talk directly with the factory representatives about their products.
Jordan Puryear, sales & marketing coordinator, Hubbard Pipe & Supply, Fayetteville, North Carolina: The beauty of co-op is that it offers us flexibility to try new things to grow sales and take market share without assuming all the risks. Discuss effective tactics to manage and administrate co-op funds. Plan early and track everything. The toughest part of managing co-op funds is that nothing is ever instantaneous, it happens over a period of time. Supplier budgets are set at the beginning of the year, so get your plans together at the end of the prior year. Keep notes of all conversations and activities in a spreadsheet that’s shared with everyone involved. This keeps everything together, and even gives you a baseline to use in future years. If you have a Customer Relationship Management system, use it. It works for more than just customers. This will help you track your conversations, set tasks and notify you of follow ups to keep you on track.
William Roche, president, Roche Supply, Honesdale, Pennsylvania: Whenever we utilize co-op funds, our key objectives are to leverage additional wallet share with current customers and also target accounts with which we are not currently doing business. It is all about hosting impactful events and/or conducting training sessions in conjunction with our supplier partners that lead to increased sales for both Roche Supply and our suppliers.
Tim White, director of marketing, Mountainland Supply, Utah: The best use of the funds and best engagement that you can get is with your local reps. If it is a rep agency that represents multiple brands or if it is a local rep for a single manufacturer, they are the ones on the frontlines who know what customers need as well as their challenges. They know the products. If you look across the United States, you’ll see pockets of areas where certain brands are stronger than others. More times than not, this can be attributed to the efforts of the local reps. To support the reps in our local markets, we have found that cosponsored training events for our customers generate a significant amount of buzz and improve overall product awareness and purchasing. Aside from collaboration with reps, we’ve also seen quite a bit of success with our customer rewards program. Vendors are actively engaged in the program with us and when do ask for support, in the way of co-op funded trips, outings and so on, they are often eager to participate. Hosting these trips as a perk of our membership incentive program has really become a differentiator for us among other wholesalers, enabling us to obtain additional market share.
IMARK Today: Discuss effective tactics to manage and administrate co-op funds.
Lenning: We are a smaller wholesaler with a limited staff and therefore it is a challenge for us to keep track of available co-op funds. For this reason, we tend to work with those supplier companies that are proactive and keep us updated on available funds. I recently learned of a resource on the IMARK website that may be of value to other members. On the IMARK Supplier Directory, under the “Resource Toolkit,” is a link to “Export 2023 Supplier Terms to Excel.” The spreadsheet provides a list of suppliers along with key information including brief descriptions of available co-op. At a quick glance, members can see which IMARK suppliers offer funds.
Roche: We have a dedicated person managing all of our co-op activities/events. This person also tracks all available funds and follows through with our suppliers to confirm reimbursement of co-op dollars. It is vital that wholesalers take the initiative on managing all aspects of co-op funding. We have found, with our standardized process in place, we are hosting a greater number of events and/or conducting more end-user training sessions which help us realize our objectives to grow sales and market share in conjunction with our supplier partners.
White: Code marketing dollars in your system based on what they are being used for. Doing so will help you view each part of the program as a line item, making it easy to report on and share with others within your organization. We often have conversations regarding consistency with vendors as it relates to the distribution and accessibility of funds. More times than not, the manufacturers all do it differently. They have their own procedures for submission and don’t always pay out the same way. In the past, the team and I have been proactive in asking a lot of questions up front and telling the suppliers what we would like to do before entering into any kind of co-op agreement. Success with these programs is all about asking.
Frank: The co-op funds Equiparts receives are managed by one person at Equiparts. Maintaining one main contact person to manage the funds makes it easy to see how they are being used and where, and the contact person can make sure that those participating are getting the right amount of exposure from the funds that they provide.
IMARK Today: What type of co-sponsored marketing events/activities do you find most effective?
Parris: Here’s an outline of our event program.
We have asked our vendor partners to focus on repair and troubleshooting for their products. There are often tricks and best practices for installing, preventative maintenance and common repairs that customers are delighted to learn about.
We use our co-op funds to purchase lunch. The supplier has some choices depending on how much money is available and their brand image.
We work with the supplier and the local rep agencies to promote the events to our customers, the rep agency customers and a broader list of customers in the region who use the products. This is a win-win since it brings in new and prospective customers for all parties.
Puryear: Let me preface this by saying that the most effective activities highly depend on knowing your customers and their buying habits. That said, I personally find that a sponsored product promotion can be one of the most effective ways of adding/converting business, if done correctly. The key is to create a structure that makes the customer want to spend more and the co-sponsorship can help offset the costs of creating desirable milestones. Many customers are creatures of habit and these opportunities can open the door to strengthening bonds and showing new customers the value you can add. My favorite part, it’s trackable! An ROI can easily be calculated at the conclusion of the event, so tweaks can be made for further growth.
White: Experiential marketing—this could include trips, concerts, outings, dinners and so on.
Frank: Our primary marketing consists of our seasonal promos and informational content that lives on our websites. We like creating blogs and videos and sharing high-resolution photographs and full product descriptions of our manufacturer’s products to ensure that our customers fully understand the benefits of them.
IMARK Today: Which IMARK suppliers offer the most effective and beneficial co-op policies?
Puryear: When I think of the best co-op programs, they all have the following qualities. They’re easy to navigate, consistent year to year and offer freedom for distributors to get creative. Luckily, we have several suppliers within IMARK who offer top-tier programs. If I had to choose my personal top three, it would consist of Boshart Industries, Liberty Pumps and Milwaukee Tools. These suppliers have held consistent programs that are communicated promptly at the beginning of every year. They also provide tools and resources to help manage/submit approved activities without any additional hassle.
Roche: We very much value and appreciate those supplier companies that offer clear and concise co-op policies and have an effortless process to apply for reimbursement of funds. Fortunately for us, several IMARK suppliers are great to work with and offer beneficial co-op policies including Bradford White, Sioux Chief, Prier, Oatey, Liberty and Campbell.
White: A.O Smith has a great program. It’s well documented, organized and easy to plan for and with. They also have a ton of promotions throughout the year that complement our co-op program, making our efforts with them a well thought out and uniform process.
Frank: Manufacturers that trust us to make smart decisions with their funds and disperse them as we see fit. This gives us the freedom to use the funds in our already full marketing strategies. We promote Sloan much of the time because they support us and give us this freedom. We recently updated our catalog and added lots of Klein and Moen products because of their support as well.
Lenning: Liberty Pumps has been great to work with. They keep us posted on available funds and their co-op policy is simple and easy to use.
Parris: It depends on our total spend with the supplier. If we have a large spend and the supplier offers a co-op percentage, then we can offer a full training seminar event. Sloan has been our best IMARK vendor partner for this program. For suppliers that we have less spend with, a simple mechanism to support a product promotion also works well. We have done counter days-style promotions to show customers new products or featured a product for a month and asked the supplier to provide funds for samples and marketing support to promote over the time period agreed. Klein Tools has been very generous with their time and support.