Understanding Automotive Co-Op Programs

In the automotive industry, co-op programs are an invaluable tool for dealerships and other businesses looking to increase their marketing reach and reduce costs. Whether you’re new to the concept or simply want to understand how to maximize its benefits, I hope you find this blog helpful in understanding what co-op programs are and how they work.

So, What is a Co-Op Program?

Co-op (short for cooperative) programs are marketing initiatives where automotive manufacturers (OEMs) provide financial support to dealerships, service centers, or parts distributors to promote their brand. These funds are allocated for various marketing activities, such as advertising, promotions, or even community events, to help businesses promote the manufacturer’s products. The idea is to share the burden of advertising costs between the OEM and the dealership. Basically, the OEMs help you pay for marketing and advertising to get their brand and your dealership in front of more potential customers.

Benefits of Using a Co-Op Program

Co-op programs are designed to benefit both the manufacturer and the participating dealerships. But for the dealerships, the advantages are numerous:

1. Cost Savings: The most immediate benefit of a co-op program is the financial support that dealerships receive from the OEM. Instead of paying for an ad campaign or promotional event on their own, dealerships can have a portion of the costs covered by the manufacturer.
2. Enhanced Marketing Opportunities: By participating in a co-op program, dealerships often have access to more advanced marketing strategies that they might not otherwise be able to afford.
3. Improved Brand Recognition: Since co-op funds are often allocated toward large-scale campaigns, dealerships can reach a broader audience. This helps improve the visibility and recognition of both the dealership and the manufacturer.

Understanding Brand Guidelines in Co-Op Programs

It’s important to understand that most automotive manufacturers have strict brand guidelines (AKA the brand standards) that must be followed when using co-op funds for marketing. These guidelines regularly use items such as:

• Logo Usage 
• Taglines and Slogans 
• Brand Colors 
• Fonts 

Failure to follow these guidelines can result in delays or denials of reimbursement or funding, so it’s crucial to ensure your marketing materials comply with the manufacturer’s expectations before they go live on your various marketing channels.. Whether you are working on a website slider for Summer Savings or an End of Year Sales event, everything will need the compliance stamp of approval. 

Steps For Submitting Co-Op Claims

Once your marketing campaign is completed, the next step is to submit your co-op claim to the OEM for reimbursement. Here’s a quick guide on how to do this:

1. Prepare Your Documentation
   Gather all relevant receipts, invoices, and proof of purchase for the marketing activities, making sure everything is itemized. This includes items like ad spend, event costs, promotional materials, etc. Check the guidelines manual, and it usually breaks out what is needed for submission. 
2. Submit the Claim
   Most OEMs have an online portal for submitting co-op claims. Follow the steps carefully, entering all required information about the campaign, including the type of activity, the dates, and the costs. Be sure to label the marketing vendor correctly, as you may have several vendors submitting co-op for you in the portal..
3. Verification Process
   The OEM will review your submission to ensure it meets their guidelines and check that all the paperwork is in order. This may take a few days or a week, depending on the manufacturer’s processing time.
4. Reimbursement
   Once your claim is approved, you’ll receive the funds or, depending on the OEM, credit for future marketing expenses.

Submitting to compliance can sometimes be a lengthy process. Even with the OEM’s best efforts to provide clear guidelines and marketers doing their best to follow them, denials can still occur. Don’t hesitate to reach out directly to expedite a resolution—they want your marketing out there as much as you do!

Should You Use a Vendor for Co-Op Submissions?

For dealerships that aren’t familiar with the process of submitting co-op claims or don’t have the time to manage it themselves, using a vendor can be a very smart move. There are specialized firms that handle co-op program management, ensuring that your claims are filed correctly and efficiently.

These vendors can help with:

• Compliance: Ensuring all your submissions meet brand guidelines and documentation requirements.
• Tracking Deadlines: Keeping you on top of co-op deadlines to avoid losing out on funds.
• Maximizing Reimbursement: They can help ensure you’re claiming everything you’re eligible for, preventing you from leaving money on the table.

Tracking Your Co-Op Spend and Allocation

One of the key aspects of managing a co-op program is tracking your spend and allocation effectively. It’s easy to get lost in the details, but keeping track of how much you’ve spent and how much co-op support you’ve received will ensure you don’t over- or under-spend.

It’s important to keep in mind the following:

• Set Budgets: Based on the funds available through the co-op program, plan your marketing budgets accordingly.
• Monitor Spending: Keep a close eye on your invoices and receipts to ensure you’re staying within your allocated limits.
• Use Software Tools: Many co-op programs offer online dashboards that allow you to track your spending and submissions in real-time.

Don’t Leave Money on the Table!

One of the biggest mistakes dealerships make when participating in co-op programs is failing to fully utilize the available funds. Co-op allocations can go unspent for a number of reasons, such as a lack of time or not understanding the eligible media for available opportunities. Remember, check your guidelines for eligible media and the time frame to submit.

To avoid leaving money on the table:

• Use the full amount allocated to you each quarter or year.
• Review your marketing strategies and implement campaigns that qualify for co-op funding.
• Be proactive about submitting claims promptly and tracking your progress.

Maximize Your Marketing Potential Using OEM Co-Op Funds

Automotive co-op programs are a win-win for both manufacturers and dealerships! They provide an opportunity for smaller businesses to access high-quality marketing resources, reduce costs, and increase brand visibility—ultimately driving more customers to your business.

By understanding the ins and outs of co-op programs, adhering to brand guidelines, submitting claims properly, and tracking your spending, you’ll be able to maximize the benefits of the program and make the most out of every dollar spent.

If you haven’t yet tapped into a co-op program or are looking to improve your process, now’s the time to take action. Don’t let these opportunities slip away!