Why Every Brand Should Offer Co-Op Funds

The benefits are clear. When the brand and the network members work together to help build market share, both sides come out ahead. Co-op funds may seem like a big investment, but take a moment to step back and realize that your primary goal as a brand is the same as a network member: boost your brand’s overall marketing position and most importantly, drive customer traffic.

Here are a few ways that offering co-op dollars can be used to benefit you, the brand, as well as some tips for maximizing the effectiveness of your co-op program.

How Co-Op Funds Benefit the Brand

  • Improve Network Member Engagement Budgets are tight everywhere. The truth is network members will be more likely to sign up for local marketing initiatives if you’re helping with the bills. First, it lightens their load. Second, it demonstrates your commitment and confidence in a program if you’re willing to take on some of the costs.
  • Encourage Compliance with Local Marketing Spend Requirements So, you require your network members to spend 2% of revenues on local marketing. How are you really doing at holding them to that? Co-op funds can help. Think about it. If you know what initiatives your co-op dollars are going to, all you have to do is subtract your contribution from the total cost. Now you can track how much each network member is spending on local marketing, which ones are meeting their requirements, and which ones aren't.
  • Incentivize Star Performance Do you have network members who just stand out above the rest? Either they’re always in good standing with all compliance requirements, or they always meet or exceed revenue targets. Reward them. Increase their co-op allotment. Helping them boost their marketing reach ultimately helps you in the end since more local marketing leads to increased traffic and increased revenues. But, more importantly, it encourages your stragglers to step it up by giving them a clear benefit (i.e. free money) for hitting their benchmarks.

Tips for Applying Co-Op Funds

  • Make Co-op Funds Available Up Front Some of the complaints we hear the most from network members revolve around co-op payouts. Either they don’t have the time to chase down receipts and fill out forms, or they can’t go so long out-of-pocket before getting reimbursed. Make your co-op funds available at the start of a program so a network member only has to pay in their portion. Lower their up-front costs and you’ll see engagement go up.
  • Offer Co-op Funds as an Allotment Rather Than as a Percentage We hear this one from brands all the time. You offer a 50% co-op for a particular marketing initiative, but no one signed on. Maybe it wasn't the money. Your network members just may not have wanted to participate in that initiative at any cost. We consistently see high engagement rates when brands allot a set dollar amount for their network members to spend towards any program they want. Tying co-op funds to a specific initiative ties your network members’ hands. Give them more autonomy on what programs work for their business.
  • Make the First One Free…Or Close To It If you have a marketing initiative that you know will work, but your network members are less than confident, make them an offer they can’t refuse. Give your network members a one-time offer where they can participate for free. Let them see the customers come through their doors and they’ll be willing to contribute next time around.

Co-op fund management can increase network member engagement in local marketing, help you accurately track network member local marketing spend and can be used as an incentive to make under-performing network members improve business. In the end, they are an investment worth making.

Lindsay Kisor's picture
Lindsay Kisor, Sales and Marketing Coordinator
Lindsay Kisor is the Sales and Marketing Coordinator at SproutLoud. She loves all aspects of marketing, but her passion lies in social media, guerilla marketing, and advertising. As a graduate from the University of Oregon – she is obsessed with her Oregon Ducks Football. She graduated from the Lundquist College of Business with a Bachelor of Science in Business Administration and a minor in Communications. When she isn't pinning wedding ideas on Pinterest or attempting a DIY project, she is outdoors: swimming at the beach, snowboarding, backpacking, wakeboarding, and traveling. She is in love with Mac & Cheese and adding to her collection of 150 shoes. Nevertheless her favorite thing in the whole world is spending time with her husband and their blind Jack Russell Terrier!