Posts Tagged 'co-op ad claims'

The Secret Pricing Formula

So we wanted to set our pricing so that it:

 

  • Wouldn’t be sensitive to the price of the claim
  • Wouldn’t be sensitive to the size of the market
  • Was based on the minimum calculations possible
  • Wouldn’t be based on collections
  • Would be fair to our retail customers and
  • Would be fair to us.

 

Since co-op claims are a matter of paper handling, the more paper we handled the more we charge – the way we know how much paper we handled is how much the postage costs. If we get a 16-page flyer and bunch of tearsheets and some radio ads, the postage is going to be X. If we just handle a couple of tearsheets, all going to the same manufacturer, the postage is Y.

 

So what we do is we put all your claims together, put them in envelopes, put stamps on them and get a total postage cost.

 

Then – drum roll – we send a bill for 7 times that amount.

 

The price is based on our cost for the postage to mail everything out. Doesn’t matter what market you’re in, doesn’t matter what the claim is worth.

 

That includes the postage, all your reports, all the claims; the complete deal for the month.

 

So a store in Albany with a television ad is paying the same as a guy in Amarillo with a radio schedule.

 

So if you have a big month for claims, we aren’t stuck behind some flat fee and if we have a small month, you aren’t.

 

Brilliant. And it works

 

How do you know your co-op advertising claim got paid?!?

Where to look for your Reimbursements…

We’re all tuned in to looking for checks for reimbursements for our co-op advertising. There are a couple of issues here:

• First, reimbursements, as you may have noticed, don’t come in all at once from every vendor. One of our customers was all excited that a paint claim for over $1,400 got paid just a month after the claim was submitted. False alarm: the claim was actually 14 months old.
• Second, the checks frequently don’t match the amount claimed. We bill 100% of the value of the claim because the manufacturer/auditor is able to apply the arithmetic of their particular program to the claim for us; some programs are 50/50, some 75/25, some reimburse 100%. In fact, we haven’t seen any for a while, but there have been short term, seasonal programs that paid over 100%.
• Some reimbursements, millwork category comes immediately to mind, that pay a credit memo. A lot of credit memos look like invoices or have a number of items on them so the reimbursement is easy to miss. We’ve had a payable department pay a credit memo once, a long time ago, but it was a new person that had just started and a mistake that was easy to unmake.
• Some of those credits show up on your statements. They may be listed with a lot of returns, cancelled or backordered items and, again, they’re very easy to miss or not have accrued to the correct account internally
• Sometimes, you are reimbursed with product. Auto parts and lubricant guys do this a lot. You get a case of product instead of cash. (I personally like these because you have product to sell that usually moves pretty well.) The problem is that a lot of this gets through undocumented. You get a case of motor oil – but it just showed up out of nowhere. There may be documentation for this ‘reimbursement by product’ but I’ve never seen it.

All of this leads to my next, exciting episode: How we price our service.

Btw, if there’s anything you want to see or ask about, feel free to comment or call.

Randy

HA!

We have a local, Massachusetts customer who seems to delight in advertising products that even we’ve never heard of. Impressive, considering we’ve generated the mother of all hardware/millwork/bag goods/tools databases over the past 25 or so years and we’ve heard of all kinds of products.

Well, this time we chugged through their 8-page circular, found 37 good, current claims and they are ALL in our database. We don’t have to Google anything, SRDS anything, call around or visit the library to borrow their Thomas Register to find any of their products this month!

It’s like hitting grand slam when someone’s co-op claims go that smoothly.

Now, if we can just keep our photocopier running…

2013

Well, it was a busy year for shooting out co-op claims and we started doing shows, again. We were at Standard Hardware over the summer.

In a couple of days I’ll see what the totals for the year were and try to get some stuff posted.


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