Making the Most out of Manufacturer’s Dollars

By Andy Fracica

Do you want to supercharge your marketing efforts? Do you know how to do more with less? Wouldn’t it be nice if there were a way to multiply the money you have and then use it to stretch your advertising budget? How would like to invest $1 and get $2 or $3 for every $1 invested? You can, if you take advantage of manufacturer and distributor advertising dollars.

Some people say that advertising is the price we pay for living in a free society. Many people talk about advertising, but what is advertising really? Unlike PR, advertising is something that you can control. If you develop an ad from scratch, you have complete control over the content and design because you pay for it. You also control when the ad runs, and how many times it runs. It doesn’t matter if we are talking about print ads or if we are talking about TV or radio commercials, if you pay for it, you control it.

Many manufacturers offer advertising dollars to their distributors and to their dealers. If you aren’t taking advantage of this money, you’re missing out. You know the old saying that it takes money to make money. You can’t expect to grow your business if you don’t invest any money to advertise your company. Word of mouth will only get you so far. Now, if you have built your business using word of mouth and you’re happy with your progress, you probably don’t need to read this article unless you want to kick it up a notch.

Let’s say you sell brand A and the manufacturer of Brand A product offers a coop program. A coop program is essentially a program where the manufacturer will offer dollars to offset the cost of advertising and to help you advertise their products. The manufacturer will purchase a block of TV commercials in a given market. Distributors will typically pay for a portion of the block of commercials and dealers who participate will pay a portion. That way every participant shares in the cost of the program.

Using the power of us, you can significantly multiply your contribution. Manufacturers are looking for partners; they will not advertise your business for you but they will add their dollars to your dollars so you can advertise their products and in the process advertise your business. Sharing in the cost of the program multiplies your buying power. I have heard from many dealers who don’t like the shared advertising concept but if you can look at the financial benefits, it really makes sense to do this.

A coop program typically has three dealers on a tag at the end of a commercial. If the manufacturer puts in one dollar, the distributor puts in one dollar and you put in one dollar you get two dollars in advertising money for every dollar you contribute or a 2:1 return on investment (ROI). If three dealers are participating in the program, multiply that, times three to see the value that you receive is a 9:1 ROI.

If each share is $4,000, you pay $4,000, and the distributor and the manufacturer each contribute $4,000, for your share, you receive $12,000. But wait there’s more! Each of the other two dealers have contributed $4,000 and received $12,000 in value. Since we tag the commercial with all three dealers, you add each of the $12,000, shares together and get $36,000, in advertising funds. Your $4,000, share has bought you $36,000 in advertising.

Yes, you share the advertising, but that’s a good thing. The more dealers advertising a product in your market, the more awareness there is of that product and more awareness you generate for your company. This is particularly true if you use other methods of advertising to promote your company and do not just rely on the coop program advertising.

Some manufacturers offer additional incentive funding programs. They offer these programs on a first come first serve basis. With these incentive programs, typically the distributor will have to meet certain requirements to access these funds. However, when the distributor meets these requirements, the additional funds can dramatically increase your share.

For instance, in the example above, the manufacturer might add another $4,000, share to the mix so now your $4,000, share buys your $16,000, instead of $12,000. Multiply that times three and your $4,000, investment now buys your $48,000, in advertising that is a 12:1 ROI. Even though you share the TV commercial with two other dealers, if you went in it alone it would cost you $48,000 out of your pocket to match the buying power of the program.

There are other ways to share in manufacturers dollars. Some manufacturers offer seasonal promotions. These promotions typically involve consumer rebates of some sort and you and your distributor must participate financially. Some programs require 50% contribution other programs require a 33% contribution. The idea is to generate sales by discounting the product with a rebate to the customer.

Cash is king to many consumers’ and this way you generate a sale that you may not have received otherwise. Most dealers will build in the cost of their share of the rebate into the sales price. Often a dealer will have seasonal pricing, so changes in pricing can reflect the dealer’s workload.

Other things to look for are pilot programs and other types of testing that a manufacturer may want to try. Let your distributor know that you are interested in participating in these types of programs when they become available. Even if you have to pay a portion of the cost, getting the jump on a competitor is good way to help keep your company name in the public eye and it will cost less than if you tried it on your own.

When your manufacturer is working with a trade publication and they put out a call for dealers to interview, always be the first to raise your hand. Depending on the article, a manufacturer could have hired a professional writer and be footing the bill for writing the article. Getting your company name in trade publications helps build awareness, and doesn’t cost you anything.

Always participate in dealer locators and lead generation programs, because manufacturers have spent their money to develop these programs and you can and should take advantage of this opportunity. If your distributor also offers a dealer locator, participate in that program as well. In addition, if your manufacturer offers any type of savings calculator tool, find out if you can participate in that program as well.

The key to getting the most out of manufacturer’s dollars is to participate in the entire spectrum of programs offered by the manufacturer. You gain recognition benefits by tying in with national programs. In most cases’ the manufacturer has a stronger brand than you do, so take advantage of that brand awareness to gain some awareness for your company. Use manufacturer’s money to multiply your investment and get a significant ROI for your efforts.

Andy Fracica is president and CEO of Fracica Enterprises, Inc., a consulting firm specializing in marketing, PR, social media, and lead generation strategy. He has over 30 years of sales, marketing, technical training, and product management experience in the heating ventilating and air conditioning (HVAC) industry. He concentrates on helping manufacturers, distributors, dealers, and startup companies find their voice in an ever increasingly crowded market place. Contact him at 260-338-4554 or [email protected] or visit the website www.fracicaenterprises.com.

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