Claims Adjustment
Wolf Distributing handles dealers’ co-op claims, and also uses co-op dollars it earns for itself from suppliers to support dealers’ trade shows, in-store merchandising, and product launches. Downs notes, however, that some dealers still don’t know what they should do with co-op dollars, so Wolf tries to develop a marketing plan with them. Wolf also makes sure that dealers stick with the brand message that suppliers set out, so there are no snags in the claims process. To that end, Wolf is developing, via its dealer-only Web portal, downloadable envelope stuffers that are pre-designed to vendors’ specifications and that dealers can modify.
As dealers shift their co-op dollars from conventional advertising to “event” marketing, Downs and others believe claims verification could become more elaborate. “Unless they get names and addresses, some vendors won’t see the value in this,” she says. Such an exchange of information, though, would require a leap of faith among those dealers that always suspect manufacturers of trying to shorten the supply chain and sell builders directly.
Yet, as the verification process evolves (and is facilitated by Internet-enabled technologies “that allow you to get approvals in a day,” says Kuiken Bros.’ Mulkeen) dealers and suppliers are convinced they can arrive at a happy medium. Already vendors are becoming more flexible about how dealers document their co-op claims. “Quail hunting is big down here,” says Cheri Jones, director of marketing for Vidalia, Ga.?based VNS Corp., which operates nine Choo-Choo Build-It Marts and two millwork showrooms. “So if we take a bunch of builders on a hunt, we’ll take a group photo with the vendor’s banner in the background, and send that [with the claim] identifying who was there.”
Jones also notes that her company gets any vendor restrictions about co-op out of the way when its purchasing managers are negotiating buying terms. McCoy’s has assigned a marketing manager as a liaison between its buyers and vendors to work out the details of a co-op program. “That’s where the decision-making has to be made, because it’s harder to influence a program once the horse has left the barn,” says Stauffer.
Indeed, one unexpected byproduct of the shift in co-op dollars to relationship marketing has been that it’s forcing dealers and suppliers to coordinate their marketing efforts. “Approval of a dealer’s special event begins with the strategic partnership” between Timberlake’s sales rep and the dealer, says Dodge. And several dealers say they encourage vendors to send reps to co-op?sponsored events. “The builders are our customers and their customers, and we believe vendors need to be there,” says Hayward Lumber’s Scattini. Taha of Alpine Lumber–which has used co-op dollars to defray the cost of everything from snowmobile trips to flying builders to the Builders’ Show or Guardian Fiberglass’ annual trade show–points out that “more and more vendors are offering trips” that mix “education with an extracurricular,” such as a visit to a CertainTeed mill that might include a fishing trip, or a tour of Trex’s composite decking plant in Reno, Nev., which in the summer would tie in some golf and in the winter skiing.
Expanding the Boundaries
It would be an exaggeration to suggest that pro dealers want to move away from price and product advertising entirely. For example, Kuiken Bros. has cable TV ads scheduled for this fall that co-op dollars from Andersen and Marvin Windows will help fund. But there is no question that dealers and their suppliers are broadening the parameters of what co-op dollars can be used for, to get the biggest bang for their bucks with the right customers.
Therma-Tru’s distributors can use co-op dollars from that supplier to recreate in their markets a “door tour” that Therma-Tru took to 90 cities earlier this year. Andersen Windows works with Performance Marketing, which creates 360-degree video tours of up to eight rooms in a builder’s or a remodeler’s home that can be viewed on HomeTalkTours.com. Warren of Black Millwork says Andersen lets dealers share co-op dollars with customers to help pay for the $225 charge and $35-per-year maintenance fee.
But who will pay how much for what is still being sorted out by trade partners. VNS recently launched a new Web site on which it includes, for free, links to vendors’ sites. “That’s definitely something we need to look at” for co-op support, says Jones.
–John Caulfield is a contributing editor for ProSales.
