Co-op Marketing Solution

Product Launch Marketing - Integrating Co-op and MDF

Friday, March 5, 2010 by Shane Vaughan

One of the products Balihoo delivers to our customers is a complete Co-op marketing solution.

As we've discussed this offering with multiple product manufacturers and how it fits into their overall trade promotion marketing efforts, one of the surprising things we've discovered is how often it's not integrated with their product launch marketing efforts.

The objectives are simple - when you launch a new product into the market, it's critically important that your dealer network is informed and prepared to effectively market that product at the local level. Many manufacturers do a great job of this from a product availability, training and sales perspective. However, we're discovering that this is often not the case when looking at their co-op marketing program.

Enabling your dealer network to effectively market your new product at the time of launch is one of the most overlooked areas we've discovered. Combining your national efforts with strong local efforts creates a product launch marketing effect that is highly effective.

The advice is simple: when launching a new product, integration with your co-op marketing solution should be near the top of your list. Effective co-op marketing can be the key differentiator between a lackluster product launch and a highly-successful one.

In fact, we believe so strongly in this that we've been offering our co-op marketing software to some manufacturers as a point-solution to support a single product launch. It's a great way for them to try it out while at the same time supporting their product launch marketing effort.

Interested? Check out our Integrated Co-op Marketing whitepaper or contact us to find out how we can help.

Advertising Lessons from Bolivia

Monday, February 15, 2010 by Kallen Hayes

We’ve all heard the term ‘purchasing power’ used in the context of the economy for consumers, but what does it mean for the local advertiser?

For me, this question brings to mind a fond memory. It took place about two years ago in the country of Bolivia, where I spent a few months learning a new language and embracing a lifestyle unlike anything I’d experienced in the United States. I was resting in my room one afternoon a few days after my arrival when I heard a loud and clamorous voice reverberate throughout the residential community in which I was staying. The words were indiscernible to me, partly because my ears were not yet trained to the Spanish language, but also because the sound echoed through my room like an eerie chant, resembling a tornado alarm more than a human voice. You can imagine my surprise a few days later when I learned the noise was merely a local fruit vendor, pushing his cart through the house-lined street shouting through his megaphone the various citruses he had for sale.

Street Vendor in Bolivia

This daily routine for the Bolivian street vendors struck me as a stark contrast to the local advertising strategies employed by small business owners here in the United States (spare the ice cream truck). Media opportunities often taken for granted by our local marketers are entirely out of reach for their counterparts in developing countries. This is a consequence of a high Consumer Price Index (CPI), an economic condition where the cost of daily goods and services is relatively high compared to the average income of individuals. To local business owners in poor countries, a high CPI presents a number of challenges, from the limited disposable income of their consumers, to the restricted availability of affordable local advertising venues.

Sure, the fruit vendor’s use of a megaphone represents the poorest end of the spectrum, but it serves to demonstrate how important advertising is, regardless of your business model or annual profits. Small business owners in a country like Bolivia are forced to use the limited and highly inefficient resources available to them to reach their customer base. Here in the United States, in contrast, our local marketers enjoy the benefit of the dollar’s strong purchasing power and access to a wide variety of inexpensive advertising outlets. The average cost per point, click, inch or thousand for everything from radio spots, newspaper ads, bus stop signs, or direct mailings is extremely competitive. Not to mention the free price of online social networking. The efficiency of these channels can be further optimized through the use of brand-developed advertising campaigns and subsidy programs.

That said, our local businesses cannot be completely successful in their advertising endeavors until they fully acknowledge the opportunities before them and learn to capitalize on them. We live in one of the greatest economic environments for small business, but it takes a bit of a sense of adventure to seize the ample opportunities. I challenge local advertisers to explore their options by starting a Twitter account, investigating available co-op marketing solutions or checking out local media rates. Teamed with well designed brand-level strategies, local affiliates can be equipped with all the resources necessary for successful advertising campaigns. There’s no reason any of our country’s main street vendors should ever resort to grabbing their megaphones and heading out the door to walk the sidewalks.

A Shifting Paradigm

Tuesday, February 2, 2010 by Brian King

Bing Dictionary defines the word Paradigm as:

1. A typical example of something

2. An example that serves as a pattern or model for something, especially one that forms the basis of a methodology or theory

If there is one thing that gets me all jacked up, it’s when I witness a shifting paradigm. It really gets me excited. I’m currently flying from JFK to SFO on Virgin America airlines flight #027. To those of you readers who have flown on one of Sir Richard Branson’s airlines, I think you know where I’m going with this.

To the rest of the world that places Southwest Airlines on a pedestal, it’s simply because you haven’t flown Virgin America yet. I defy you to fly Red(their clever marketing reference) and then tell me you would rather fly the same route on a flight with attendants dressed in purple polos and khakis. To you Virgin America virgins, picture relaxing in a comfortable Las Vegas ultra lounge while flying 400 miles per hour at 35,000 feet without the use of recreational hallucinogenic drugs. Comfortable black leather seats, ambient mood lighting, and smooth electronic jazz music are a few of the things they have done to bring back the comfort in flying.

I write of this amazing spectacle all while enjoying my third Ginger Ale that I ordered from a screen in the seat back in front of me, listening to a playlist that I built from the 1000+ song music library available to all passengers and occasionally gazing at the dumbfounding spectacle of ambient lights above. This compilation of words, commonly referred to as a blog, is being posted while at 35,000 feet courtesy of the onboard wireless internet available to all passengers. And because, my laptop battery would never last the 2,586 mile journey from JFK to SFO, my computer is plugged into the power outlet underneath my seat.

I’m pretty sure this wouldn’t be the case on a US Airways flight. This is a beautiful shift in the old-school airline paradigm and it reminds me exactly of what Balihoo is doing for local marketing automation. Balihoo is revolutionizing the way that businesses market at a local level by offering a state of the art co-op marketing solution, robust ad builder capabilities and local media buying. This is a complete departure from the way that companies facilitated local marketing in the past

Oh how I love shifting paradigms. Time for another Ginger Ale.

Balihoo Partners with Trade Promotion Management Association (TPMA)

Thursday, January 7, 2010 by Shane Vaughan

Here's a press release we sent out earlier today:

Balihoo Partners with Trade Promotion Management Association (TPMA)

Leading co-op marketing software provider joins the premier membership organization dedicated specifically to the practice of trade promotion marketing

Boise, ID (Jan. 7, 2010) — Balihoo, the premier provider of Local Marketing Automation technology and services to national brands, announced today that they have joined the Trade Promotion Management Association (TPMA).

“With the launch of our Integrated Co-op Marketing Solution, it simply makes sense to partner with the leading industry organization in the market,” said Pete Gombert, Balihoo’s CEO.

Balihoo’s solution combines creative customization, local media execution and co-op funding into a single Integrated Co-op Marketing platform to give product manufacturers and their resellers a single location to manage all co-op marketing activities. Embedded in Balihoo’s Local Marketing Automation platform, this represents the industry’s first closed-loop co-op marketing solution that functions across all advertising and marketing mediums.

“TPMA is very pleased that Balihoo has chosen to join. Our members include many of the most innovative and highly-regarded service providers in the trade promotion space, as well as leading retailers and their suppliers. Balihoo will fit right in,” said Bob Houk, TPMA Executive Director.

In addition, Balihoo has announced the availability of a white paper: Integrated Co-op Marketing White Paper; Translating National Strategies into Local Execution.

Outdoor Adventures in Co-op Advertising

Tuesday, December 22, 2009 by Brian King

Like most people in Boise, I’m an outdoor enthusiast. It’s a big part of why I chose to live here. With a love for outdoor activities comes the insatiable thirst for top of the line gear. Sure, call me a gear-head. Self admitted.

When it comes to purchasing the latest and greatest outdoor gear, I automatically gravitate to REI for two simple reasons. One, their customer service is second to none. And two, I’m a member of the REI co-op program. REI was established as a co-op providing members with an annual dividend check formulated from the member’s total purchases throughout the fiscal year. The use of co-op for retail stores is a simple concept that has worked incredibly well and is best seen by REI’s history of steady growth in a crowded retail sector.

So if it is so simple, why aren’t more brands using co-op for their retail distributors the way retail distributors use co-op for their customers? Easy answer. It’s too damn complicated. The paperwork and filing process associated with co-op reimbursement for distributors has been so cumbersome that, oftentimes, retailers will leave eligible dollars on the table at yearend simply because the co-op marketing program wreaks havoc on the retailer’s cash flow by the time they are finally reimbursed. The concept of co-op advertising works so long as it is easy to use and straight-forward.

Enter Balihoo’s new Integrated Co-op Marketing Solution: An easy solution to enable effective co-op marketing at a local level. For fun, let’s play out a brief scenario to show just how powerful co-op marketing can be.

Brand X releases a new lightweight soft-shell jacket with state of the art fabric technology and happens to offer a 75% co-op for all advertising dollars spent by retailers promoting the product. Brand X does this via Balihoo’s new solution. Retailer, REI in this scenario, decides to run a strategic local advertising campaign at their Boise location that features a co-branded advertisement with Brand X’s new product and REI’s logo. And for the sake of this story, the ad happens to be localized via Balihoo’s local marketing automation tool (yep, all located in the same online portal). Brand X loves this because their product is being marketed at the local level. REI loves this because it is simple and Brand X is helping pay for the ad real-time, meaning that there is no waiting or messy paper work associated with receiving reimbursement. Co-op is applied at the time an order is placed and full transparency is seen by all parties involved.

…Along comes a gear-head such as myself. I see the ad, and go to REI to check it out because I trust the retailer and the products they sell. Oh, and did I forget to mention that I go to REI because I love the REI member co-op program? I purchase the product, and go figure, I use my REI Visa to purchase the coat because it increases my eligible co-op amount on the product and thus results in a larger yearend dividend. I then receive my dividend check and the whole process starts over when I see another co-branded REI ad promoting a new Brand Y cycling shoe that REI just started selling. And guess what? Brand Y is offering a 90% co-op.

To sum it up, much like retail stores can drive consumer behavior via co-op, brand’s can drive retailer behavior using the same simple concept.

Co-op advertising. It’s a beautiful thing.

Tags: Channel Marketing Software, Co-op Advertising, Co-op Marketing Software, Co-op Marketing Solution, CRM Marketing Automation, Retail Marketing, Sales Promotion Marketing, Trade Promotion Marketing

Integrated Co-op Marketing Whitepaper

Monday, December 21, 2009 by Shane Vaughan

For those of you involved in Co-op advertising or co-op marketing programs, I wanted to make you aware of a new whitepaper we have entitled, "Integrated Co-op Marketing."

You can access the whitepaper here: Integrated Co-op Marketing

The overall concept of the whitepaper is that organizations who integrate the creative and financial components of their co-op marketing solution see significantly increased results from their channel marketing program. We believe that by deploying sophisticated co-op marketing software an organization can dramatically increase reseller participation and success in their co-op marketing solution.

Marketing software tools, specifically co-op marketing software, have made significant strides in recent years and this whitepaper will help you understand how to identify and deploy the most effective co-op marketing solution.

Would love to hear any feedback!

The Evolution of Sales Promotion Marketing

Monday, December 14, 2009 by Shane Vaughan

Sales promotion marketing, using co-op advertising funds, has typically been a very promotional-based type activity. The brand builds the ad, in which the retailer plays a minor role, then a print ad builder is used to customize it for the retailer.

However, as suggested by this Ad Age article, Walmart is taking a unique spin on these ads. They're focused more on the product itself, with the retailer taking the back seat in terms of visibility. It suggests that because Walmart has established a positioning of low-price leader, they're able to run these more brand-based (or product based) ads without the need for a heave dose of sales promotion marketing messaging.

While interesting in and of itself as a general trend, I think it's important for product manufacturers to consider how this could play out in their co-op advertising programs. Specifically, manufacturers need to consider the role their creative and creative templates play given this information.

Our recommendation to clients of our co-op marketing solution is that they need to develop creative templates that allow for a spectrum. At a very basic level you can create two versions of your product ad - one where the retailer plays a starring role and one where the retailer plays a minor role. Then, fund these templates at different levels (for example, 25% co-op for one version and 50% co-op for the other). Approaching it in this fashion allows the retailer to implement their sales promotion marketing efforts in the manner the best suits them and they're rebated at a level that is comfortable to the product manufacturer.

Of course, this approach assumes that you have a print ad builder (or other mediums) implemented in your co-op advertising program that can manage this level of specificity. Balihoo's channel marketing software can handle that, I hope yours can too.

Balihoo Announces Integrated Co-op Marketing Solution

Tuesday, December 8, 2009 by Shane Vaughan

Note: This post originally appeared on the older Balihoo blog on 10/27/09.

JUST in case you missed our announcement on PRweb or our News section (we like to be thorough) I wanted to let everyone know that we have some pretty exciting news today - we’re announcing the wide availability of our Integrated Co-op Marketing Solution.

This is a big deal for us - we’ve had co-op functionality in our system for awhile, but for the first time we’re packaging it up nicely and making it widely available to all of our customers (and potential customers). I’ve seen firsthand the delight on a reseller/distributor/franchisee face the first time they log into this co-op marketing solution and realize that they can manage both the creative and financial ends of their co-op advertising spend through one easy system. The time savings and cost savings they realize are immediate and significant.

And for the national brand running the co-op advertising program - the biggest deal here is the visibility they have into what’s going on at a local level. Imagine being able to completely understand the local support of a product launch BEFORE it’s launched. Or, view marketing activities at a local level to understand what’s working for your affiliates. Invaluable.

If you want to learn more about using a centralized system to manage a co-op program, check out our Integrated Co-op Marketing Software whitepaper at: www.balihoo.com/icm

OK, enough about us, back to our regularly scheduled programming……

Co-op advertising or MDF advertising: Who cares?

Tuesday, December 8, 2009 by Shane Vaughan

NOTE: This was originally posted on the older version of the Balihoo blog on 10/20/09 by Marcie Blagden.

Here’s an interesting blog posting - Co-op or MDF: Who cares? in which the author discusses the differences between Co-op advertising and MDF advertising programs and analyzes the current trend of manufacturers to move more towards MDF-based programs.

I agree with the author here – who cares as long as it’s successful?

Regardless of the format of the program, more time and attention needs to be placed on building programs that are easy-to-use (both for manufacturer and distributor) and ultimately successful in the marketplace. The MOST successful co-op advertising programs minimize the administrative efforts required by both parties while maximizing the return-on-investment (and time) of dollars placed into the system.

It’s Called ‘Co-op Advertising’ Because it Requires Coordinated Cooperation

Thursday, December 3, 2009 by Shane Vaughan

Co-op marketing solutions and co-op advertising program can be incredibly valuable and effective; however, unless they are clearly executed by all involved parties they can be reduced to simply an additional headache that never seems to perform quite as desired.

Consider the following:

Do you really believe your co-op advertising budget is being well spent?
Can you guarantee coordination of timing and messages for product launch marketing efforts?
Are your resellers spending more time complaining about delayed reimbursements than working to achieve results in your upcoming key selling season?
Have your competitors started to outflank you with more effective co-op advertising program - even though they offer an inferior product?

Co-op Marketing Strategies: Building a Better Co-op/MDF Program
View more presentations from Balihoo.

Tags: Channel Marketing Software, Co-op Advertising, Co-op Marketing Software, Co-op Marketing Solution, CRM Marketing Automation, Retail Marketing, Sales Promotion Marketing, Trade Promotion Marketing

Co-op and MDF Programs - Adoption is your key Front-End Metric

Thursday, December 3, 2009 by Shane Vaughan

Note: This post originally appeared on Balihoo's old blog on 11/17/09

The Trade Promotion Marketing Association (TPMA) reports that there are approximately $50B in co-op/MDF dollars available in a given year, while only $30B are actually used. This means that 40% of the dollars that manufacturers make available to their channel to drive local demand generation go unused.

Let me rephrase that - manufacturers offer free money to resellers to drive their business and it’s only accepted 60% of the time. Does that sound right to you? Does that sound like an effective co-op marketing solution?

As channel and trade managers, you should not accept this as the due course of business. My belief is that adoption rate - the % of your resellers eligible for your co-op program who actually engage - should be the key front-end metric you measure to understand the value of your overall co-op marketing solution. No, it certainly won’t replace the key back-end metrics of revenue and ROI, but on the front-end it is the main thing you should be looking at in your co-op marketing software. Why? Because your adoption rate can tell you so much about your program.

Getting a deep understanding of your adoption rate (over time) can help you understand:
- Are my salesforce engaged and being ambassadors for the program?
- Am I effectively communicating the program?
- Is the program easy-to-use?
- Am I providing enough flexibility within the program?
- Is the creative valuable to my partners?

So - tip of the day - track your adoption rate. If you see it anywhere below around 80%, you should be taking a deep dive to understand why your resellers are not taking advantage to move their business forward. FYI - your co-op marketing software should be able to help here!