Maximizing your co-op dollars
After seeing huge sums of manufacturer co-op funds go wasted or unclaimed for years, a former ITW marketing exec is changing the co-op game for independent industrial distributors.
“When I was on the manufacturer side, co-op funds were a bit of a conundrum,” says Tim Rasmussen, principal of Rivet|MRO, a marketing consulting firm focused on the unique needs of industrial clients. “On one hand, the large national distributors were built to extract every dime of co-op funds available to them—and they had the marketing teams to put those funds to use. But it’s the polar-opposite with the regionals.”
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| Rasmussen |
Rasmussen says regional distributors—even larger ones—have been at a disadvantage because of resource limitations…until now. “Regional distributors simply don’t have the staff to claim all the co-op money available to them. And they generally don’t have the marketing team to put those funds to use in an impactful way. Only a small fraction of independent distributors claim significant co-op funds. Even then, they are typically used for promotional products, not targeted marketing programs that create a lift in sales.
“When I asked the independents why they didn’t claim their co-op funds—free money to market their business—they identified two key issues: the lack of staff time to manage the minutiae of the claims processes and the lack of executional resources. Simply put,” he says, “they hadn’t figured out how to gain access to their co-op funds or how to drive meaningful results with them.”
Rivet|MRO’s Co|optimizer co-op maximizer program changes all that, providing a resource for independent distributors to maximize the co-op money they’ve worked so hard to earn.
“It’s not just about getting the money for our clients,” says Rasmussen, “it’s about putting it to good, smart use. It’s about building the business for both the distributor and the manufacturer. We understand the MRO business and how to craft impactful, targeted marketing solutions. We grow MRO.”
Rivet|MRO gives independent distributors—and their manufacturing partners—access to Fortune 200 marketing thought leadership and know-how. “We’ve been where they want to go and have the ability to tilt the playing field in their favor,” says Rasmussen. “As the industrial economy continues to grow, our clients are seeing the need to invest more in marketing. They value our ability to drive growth.”
Through the Co|optimizer co-op maximizer program, Rivet|MRO has helped independent industrial distributors across the country fund and create marketing initiatives they could never have implemented on their own. “We do a lot of video and sales promotion projects,” says Bob Stergos, business development director for Rivet|MRO. “Our clients eat them up. They see the exceptional value of video in a multitude of areas—ecommerce conversion, field sales demos, email marketing, search engine optimization and more. Pair them with targeted sales promotions aimed at converting new customers and you have a huge win.”
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Tyler Duke Reed, vice president of supply chain and marketing at Martin Supply in Florence, Alabama, agrees. “Using the Co|optimizer program, we have been able to take advantage of maximizing our co-op dollars while providing a better ROI to help grow our business.
Rivet|MRO produced a series of animated product/solution-based videos for us using co-op funds. Everyone was extremely impressed with the quality/concept—even our manufacturing partners are excited about them.”
“In years past, we didn’t claim many co-op marketing funds,” says Eric Wessinger, president of Richards Supply in Ft. Worth, Texas. “With Rivet|MRO’s help, that changed last year. They did all the work. They reviewed our purchase data, identified co-op programs that might be available to us, developed a marketing plan and even contacted our manufacturing partners to get their buy-in. Then they executed targeted marketing programs and sales promotions to help us get more selling opportunities. Our sales team is excited to have these fantastic new tools at their disposal. We’re already generating new business because of the Co|optimizer program.”
“When we’re working with a new prospective client, they hear our story and think—how can this be?” says John Sanders, business development director. “They’re conditioned to think co-op dollars are too hard to claim and more hassle than they’re worth. Thanks to Co|optimizer, that couldn’t be further from the truth. We make it incredibly easy for independent distributors to claim the co-op funds they’ve earned—and it costs them nothing. We do all the work and they grow their business. It’s exciting to see the light turn on for them when they understand our model.”
Rasmussen has another spin on it. “Most independents operate at around a 23 percent margin. That nets down to somewhere between 5 or 10 percent for most distributors. When we show them how we can help them capture $50,000 or $100,000 or even more in co-op funds, they’re impressed. Chances are, they spend nowhere near that on their own.
“But then they consider the math behind it. They ask themselves, ‘How much product do I have to sell to drive a $50,000 marketing spend for my business?’ Close to a million dollars’ worth? That’s the kind of impact we bring to our clients. It’s incredibly gratifying to see their reactions when the projects come to fruition and the results start to come in. And it’s equally enjoyable when the manufacturers see those results—results they may have given up on when it comes to co-op marketing. Everyone wins,” says Rasmussen.
In addition to its Co|optimizer co-op maximizer program, Rivet|MRO provides strategic marketing consulting, marketing analytics and industrial distributor-specific syndicated social media management—along with the traditional executional resources one might expect from a full-service agency. Visit www.co-opmaximizer.com or www.rivetMRO.com.
This article originally appeared in the March/April 2018 issue of Industrial Supply magazine. Copyright 2017, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
