By Jeff Hemmel
Yamaha recently gave its PWC dealers a little good economic news, unveiling a program that allows dealers to use valuable co-op dollars without sacrificing any cash out of pocket.
Under the program, dealers will, in essence, have access to Yamaha’s half of the normal co-op deal, without having to match it with any of their own dollars.
“This program was really designed to assist those dealers that may be having a cash flow problem, or just maybe said, ‘I don’t have the money to do some advertising because I’m going to work on some other stuff,’” said Yamaha’s National Marketing Manager Bryan Seti. “The dealer has to spend nothing out of pocket.”
Under the typical co-op plan, a dealer buys a certain amount of product, and then earns money, typically 2-4 percent of that total, toward a co-op advertising program. For example, a dealer who purchases $100,000 of product might earn $4,000 toward their co-op program, a figure that is then matched, typically on a 40/60 or 50/50 basis, by the manufacturer. The result is
$8,000-$10,000 to spend on advertising. It’s a valuable program, but one in this day and age presents a problem in typical circumstances – cash-strapped dealers are required to dish out their portion of the money in order to even have access to those valuable matching funds from the manufacturer. As Seti himself explains, often it can be a Catch 22. The more money you earn, the more money you have to spend out-of-pocket to use that total sum.
Yamaha’s solution is to allow dealers to use half their co-op total, but have Yamaha foot the entire bill. “The thought is we just don’t want a dealer to go into a hole and not communicate with his customers,” Seti said. “It will allow the dealers who are tight on cash to be out there marketing and communicating. They’ve got a lot of product in their showroom, and we just don’t want them sitting around not spending any money.
“When speaking to dealers, that’s the big issue. They don’t want to take any of their own dollars out of their pocket. And in this environment, they would have left a ton of co-op on the table. Most years, maybe 20-30-40 percent of co-op is not used. This year, judging by what was happening in the first four months, nobody was using any co-op, because they had to spend the other 50 percent on the dollar. To get a $10,000 ad buy, they had to spend $5,000 of their own money. Well they haven’t had that money, and we don’t want them to go dark, we think that’s bad for business. So we came up with this program we could offer to every one of our dealers, and hopefully every one of our dealers will take advantage of it.
“Go out there, advertise, spend that money on other things that are important to you but let’s not let the economy stop you from getting your name out there.”
The no money out-of-pocket claim is valid from start to finish. Yamaha requires only the purchase be television advertising. The company will provide all the tags and voiceovers, even negotiate and make the ad buy on the dealer’s behalf at no charge through the company’s sales promotion agency. Ad buys will start in April, before ramping up for heavy exposure leading up to Memorial Day. Though dealers still get to choose where the ads will run, Yamaha is pushing for certain outlets that research shows have the best historic results, like ESPN, TNT, Speed Network and The Golf Channel. All ad buys will be in prime time, avoiding the run-of-the-station deals that may slot ads in the middle of the day when the typical customer is away from the television. The only paperwork involved is a simple consent to use the co-op money. “(The dealer) doesn’t have to do anything else,” Seti said. “He can just focus on his core business, which is selling personal watercraft and boats.”
Though the program was just gearing up at the time of this interview, early dealer reactions are positive. Seti indicates Yamaha is hoping to get to a couple million dollars in sales. “It’s really a win-win for those dealers that really do not have the ability to spend cash on advertising at the moment. We want to be a partner to them in their success, so we want to offer a program.”
Dealers who wish to take advantage of the normal co-op program still have that option.
“We get what’s going on out there,” Seti said. “It behooves nobody not to market and let
people know we’ve got great product and we’ve got good financing and incentives.”
Copyright 2009 Powersports Business