Utilizing co-op to maximize your advertising budget

In a recent conversation with a manufacturers rep he told me the staggering amount of dealer co-op available to dealers that are not utilized every year. This figure was well over $300,000 in just his region. The fact that dealers are not utilizing this money is alarming and dangerous for our industry. These manufacturers have meetings about these numbers and if large dollar amounts continue to go unused, I would think that eventually they will cut the funds available. Then when these manufacturers do cut the funds, dealers will complain that the manufacturers will not help them with advertising funds.

Advertising is the single most important part of your business. In my opinion it is more important than the brands you sell. If you do not tell people you are open for business and how they can buy from you then they will not buy, and the product you have on your showroom is irrelevant. Failure to advertise is like winking at a girl in the dark. Dealers spend tens of thousands, sometimes even hundreds of thousands of dollars in overhead every month to open the doors. However, many of these same dealers only spend $1,000 or $2,000 per month to tell people that they are open for business.

Co-op funds are vital to a dealers’ ability to advertise and brand themselves with manufacturers’ money. Look at it as if you are getting a 50 percent or sometimes even a 100 percent discount on advertising. If you are working with an advertising agency that is not maximizing your co-op, fire them now! I have strongly expressed in past blogs, a dealer with no strategy and budget allocated to advertising should just close its doors. You must spend money to tell people how to find you, otherwise your competition is going to beat you to a bloody mess. In my past experiences in management of a large dealership as well as my current role managing advertising campaigns for dealers across the country, I always maximize a dealers’ budget through manufacturer co-op dollars.

The reality is that the more you spend on advertising the more people are going to know about your business. This means more calls, leads, floor traffic and website visits are going to come into your dealership. Large dealerships are spending upwards of $100,000 per month in advertising, or a million dollars a year. Dealers can accomplish this by leveraging every single dollar the manufacturers are giving them to help brand their store and tell people to come buy! Maybe you are a smaller dealership and not a huge budget for advertising. However, could you afford $4,000 per month, or $48,000 per year, to tell people to come buy from you? Add in co-op and you could potentially take that number to $96,000 per year! That is a huge difference in the kind of impact your advertising can have on your business.

The reality is this: I have conversations with OEM manufacturers every day and they truly want to give this money to dealers. They truly want their dealers to advertise more. They truly want dealers to sell more products. They truly want dealers to thrive and make money. And they truly want the give out all the co-op dollars they allocate to dealers.

The good news is that the second half of the year is fast approaching, but it is not too late to put an advertising plan in place for the remainder of the year. This means it is not too late to advertise with manufacturer money. Utilizing manufacturer co-op is a non-negotiable for successful dealers. Dealers who advertise and utilize these funds are winning and so can you!

Ryan Brown is vice president of powersports at Big Time Advertising, a digital advertising agency focused solely on the powersports industry. Ryan has over 15 years of experience in the powersports industry as a rep and GM of a national top 10 multi-line dealership. He uses his knowledge of the powersports industry and digital advertising to put together winning advertising plans that deliver more leads to dealerships across the country.

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