Even on a
limited budget, every retail business must advertise to keep new customers
coming in the door. Co-promotions and cooperative advertising are two
approaches to maximizing the value of your advertising dollars by sharing the
costs. The supplier (typically a manufacturer or distributor) benefits because
its product gains greater exposure at the same time its sales are increasing.
Co-promotion
may be an option if you can split your ad costs with another local business
serving your same target audience. Those costs could include sponsorships, ads,
newsletters, fliers and bill stuffers. You may identify one or more vendors who
are willing to share the cost of a trade show booth as well as the printed
materials and staffing required for the booth.
With
cooperative advertising (also known as co-op advertising), two or more parties
are sharing certain ad costs. This arrangement may take the form of an
incentive program, with manufacturers contributing dollars to the ad campaigns
of distributors or retailers to encourage the promotion of certain products.
Suppliers
who participate in co-op advertising programs usually give the retailer credits
for purchasing their products or services. Those advertising credits can amount
to 3 percent to 5 percent of the total purchase. The credits can be redeemed
when the business owner buys advertising that the supplier approves. Often
Yellow Pages advertising qualifies for co-op money.
The
supplier sets the guidelines. Usually the ads eligible for co-op dollars
feature the supplier’s brand exclusively. In addition the supplier may have to
sign off on the ad and the chosen medium being used if not also the frequency.
Sometimes suppliers have ad copy or scripts that must be used to qualify for a
reimbursement. If not, the supplier probably will want to approve of the ad
before it runs. Remember, however, that the ad should feature your business
prominently in addition to playing up the product.
How do you
get reimbursed for co-op advertising? There are two approaches. You may have to
pay for the ad up front and then give the supplier a copy of the ad. For radio
or TV ads, you’ll probably need to show the script and proof of the dates and
times the ads were aired. Some suppliers, however, may issue credits that
equate to their agreed-upon share of the advertising. Then the business owner
can make future purchases from the supplier at a discount.
The great thing about shared advertising is it enables a business owner to spend less on advertising and use those savings to grow the business in other ways.
If you would like to discuss advertising strategies, including cooperative advertising, contact SCORE “Counselors to America’s Small Business. To contact the Greater Binghamton Score Chapter 217 for assistance call 607-772-8860 or 1-800 -920-6972. You may also contact SCORE for person to person counseling appointments at the above telephone numbers. If you are already in business onsite assistance is also available.