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Which SMB Clients Are the Best Co-op Advertising Prospects?

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Some small and medium-sized businesses (SMBs) are better prospects for co-op advertising than others. In determining which clients have the biggest co-op opportunity, there are several key factors you MUST focus on to determine your best prospects:

  • Local businesses: Identify the “mom and pop” stores in your area. They will often benefit the most from co-op advertising and they make their advertising decisions locally.
  • Brand-name products: Co-op funds are most often attached to products and services from major manufacturers. Of course, co-op can be found in brands from any size company, but you’re certainly more likely to find success with bigger names.
  • High turnover of specific products: Many co-op plans are based on how much a retailer sells, so those constantly buying products from manufacturers tend to have higher accrual funds.
  • Direct purchases from manufacturers: Retailers who buy directly from the manufacturer are ideal due to the one-on-one nature of their buying structure. (Note: You can still get co-op money when distributors/middle men are involved in the purchasing process.)
  • Simple is better: Some retailers are simply easier to work with and will provide a better return on your time investment. Current advertisers are always a good start. Then look for businesses with good reputations and work from there.

As for the business types, depending on your location and the influx of big box competition, you should see success with hardware, sporting goods, lawn and garden, jewelry, boating, etc.. However, the following categories will typically bring in the biggest ad dollars. (Note: In all cases, your co-op activity should focus on product categories that are key to your area.)

Home Improvement Businesses: From contractors and installers to specialty stores and supply warehouses—offer co-op at every level of the brand distribution cycle. Product lines will run from air conditioning and appliances to carpet and flooring to paint and wallpaper, and everything in-between. Most of these products will either be high volume or high cost per unit.

Automotive Dealers: Often have a decent understanding of the co-op arrangement for their new vehicles, but that is not always the case. Plans may vary regionally and/or seasonally based on inventory levels, but certified pre-owned and parts & service plans may offer the most opportunity to assist the local dealer.

Auto Accessories: Covers a wide amount of product lines across a large number of manufacturers, including all of the major oil and tire brands. Aftermarket stores and auto service shops often carry a wide selection of brands with co-op funds

Power Equipment Brands: From power tools to lawn mowers to heavy-duty farm equipment—are generally carried by local independent hardware stores and specialized equipment dealers. The seasonal structure of these businesses means the stores often pre-order most of their inventory well ahead of the season. When possible, advertising programs should be outlined prior the season to maximize co-op draw.

Motor Sports: Motor sports businesses can accrue significant dollars over the course of a season, especially with dealers who carry multiple brands in inventory. Manufacturers in this category are heavily promotional, with ads, signage and point-of-purchase material sent to dealers to reflect the latest consumer offers.

Click here to see how LSA can make co-op advertising a simple, revenue-driving strategy for your local media and marketing company.

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