Distributor Co-op Attitudes

Last month Channel Marketing Group conducted a brief electrical distributor attitudinal survey regarding marketing co-op funds and wanted to share the results. By no means are they scientific as we had about 100 responses.  The questions we asked, and the input we received, was:

Which answer best describes your company’s marketing philosophy?
How do you plan to fund future marketing initiatives? (select up to 3 choices)

 41.2%   We only market manufacturers who support our marketing efforts
11.8%    We market manufacturers without expecting manufacturer funding
47.1%    We believe marketing funds are ours to use as we see fit

If you budget for marketing, what percent of sales does your company budget?

62.5% Work with manufacturers who offer at least a 50% co-op program
56.3% Work with manufacturers who offer a 100% co-op marketing reimbursement program
31.3% We will seek “free/reduced” product or credits in exchange for marketing
25.0% We will budget a % of sales (or fixed dollar amount) for marketing
18.8% Work only with manufacturers who fund marketing through MDF
6.3% We will be cutting back on marketing
6.3% We will use some of the rebate we earn to fund marketing

50.0%    .25-.5%
14.3%    2.1-2.5%
14.3%      3%+
7.1%      .6-1%
7.1%     1.6-2%

Based upon the feedback,

• Distributors feel earned marketing funds are “their’s”
• They primarily market manufacturers who offer funding, and for the remainder provide little funding (<.5% of sales!) and are hesitant to invest in marketing

Over the past year, a number of manufacturers have reduced, or eliminated, their co-op programs, instead deciding to target funds to selected distributors who actively seek to support the manufacturer.

While distributors may prefer rebates to co-op and marketing funds (to either support short-term profitability or because they don’t believe in marketing), those distributors who market themselves, and their key partners, are seeking ways to differentiate themselves – to their customers, their reps and their manufacturers. In an economic marketplace where you need to align costs and then take share, funding marketing appropriately and with appropriate channel support can help both parties take share.

What are your creative strategies for either selectively supporting distributors or, if you are a distributor, for promoting your manufacturers?

Remember, driving sales can’t happen unless someone asks for the order! What are you doing to make it you?