CO-OP funds were traditionally distributed as account credits. However, many manufacturers have discovered that credits do not always generate mental satisfaction for partners. Thus, a more recent solution to distribute the Co-Op funds is as part of a rewards and loyalty program.

Benefits

• More money, more ads: Co-op enables partners with more ability to spend in areas like larger ad space and longer runtimes that they would not be able to afford otherwise. It also provides the corporate brand with a degree of local presence that they could not attain independently. It’s a win-win situation.
• Opens doors to new ways of marketing: With the financial assistance of corporate co-op funds, partners will be more willing to test new marketing strategies and experiment with innovative marketing concepts.

Challenges

• Small business, small budget: Day-to-day operations of small businesses do not have the cash to pay for Co-op marketing campaigns in advance of reimbursement.
• Put a strain on your marketing/sales team: In general, co-op finances are simply another obligation added to your marketing or sales team. Instead, a dedicated team should be working on your through-channel marketing campaign to guarantee that your co-op cash or market development funds are spent efficiently.

Example

Microsoft’s channel incentive program supports channel partners in earning cooperative marketing (co-op) funds by claiming reimbursement for activities that promote Microsoft products.