Make Most of Co-Op, Dealers Told

Make Most of Co-Op, Dealers Told

While some kitchen and bath dealers may not use the co-op advertising funds that are available to them, those who do utilize the money find that the programs can be helpful in dramatically stretching their advertising dollars, experts say.

"Overall, it helps a company's bottom line," observes Tim Aden, CKD, CBD, of the Minneapolis-based Sawhill Custom Kitchens & Design, Inc.

"Advertising is expensive, no matter how big your company is," Aden explains. "By using co-op dollars, costs are offset, and our company gets some very valuable leads from advertising that we normally would not be able to afford."

Many distributors and manufacturers provide funds for advertising if their ad promotes their product, and many of the ads are either paid for in full by one party, or split between the dealer and manufacturer. Some may even offer a television commercial for local airing, in which firms can add a tag line at the end that the product can be found at their store.

Co-op programs may also offer various professional-looking, low-cost ad materials, ready for dealer printing. These include brochures and pamphlets that are ready for customization with a dealer's name.

"Literature can be very expensive, but with the help of co-op programs, we can produce some eye-catching material that our customers can appreciate when they stop in," Aden stresses.

In the kitchen and bath industry, a well-known example of co-op advertising is dealer listings in national consumer magazines. The enormous cost of advertising in such publications generally prohibits dealers from buying ad space. However, through the listing program, dealers pay a small fee to have their name listed alongside those of other dealers, in an ad produced and placed by a manufacturer, distributor or trade association.

Listings programs like this offered by the National Kitchen & Bath Association for members provide dealers with a chance to participate in a much broader ad program than they could do on their own, with dealers receiving national exposure at minimal cost. "But so much is free, too," Terri Yoho, manager of marketing services for Kohler Co., explains. "All firms should investigate their eligibility for co-op programs to maximize their overall business exposure. It's really an easy way to advertise."

Besides newspaper and magazine ads, there are numerous other co-op programs available from suppliers, including Yellow Pages displays, direct mail, outdoor billboards and signs, and yearly promotions. Companies should be sure that they understand the rules each supplier sets before agreeing to use them during the year.
According to sources familiar with co-op ads, business owners should make it a point to meet at the beginning of each year with their manufacturers' sales representatives to discuss what a supplier's co-op program offers and how it fits into the context of the firm's marketing and sales plan.

"Our sales reps sit with our registered showroom managers each year to work out a plan that best represents their objectives," says Yoho.

Typically, a company's co-op allocation depends on the amount of products it purchases each year from a given manufacturer. Some suppliers don't set specific limits on funds, but have to approve the marketing tactic before they'll give dealers any money.

"All of our prepared material newspaper and magazine ads, and TV and radio commercials needs no prior approval," says Yoho. "Dealers simply run the selected ad and send our Shared Marketing Department a copy of the publisher's invoice and a full-page tear sheet or notarized affidavit from the Association of National Advertisers. "It's that easy."

And there's always room for negotiation, say those in the know, adding that dealers should come to an agreement with their suppliers on what makes sense for their business growth and cash flow before money is actually spent.

Items that should be agreed upon include the following:

  • Who pays.
  • What will be promoted.
  • When to promote.
  • Where and how to promote.
  • Message approvals.