Six Critical Success Factors for Co-Pay Programs

March 31, 2016 Gary Ritkes

Change is hard. Risk is, well, risky. But the opportunity cost of staying the course could carry a hefty price tag you don’t realize you’re paying. Unrealized revenue, unmeasured customer loyalty, frustrated channel partners - these are losses to your bottom line.

The new paradigm in co-op programs adopts a co-pay model instead of the traditional reimbursement system. The old model places the burden on channel partners to pay up front for all local marketing costs and then plan and execute their local marketing on their own all the while waiting to get reimbursed later. With manual processes, multiple vendors to coordinate, tight brand control, and lacking support, channel partners are easily frustrated with these shared marketing programs. In reality, traditional models are cumbersome for both brands and their channel partners as evidenced by years of data showing billions of co-op dollars going unused year after year. (

The new co-op model—a key part of SproutLoud’s through-channel marketing automation approach ( —front-loads the process with co-op marketing dollars that are applied to pre-approved, turnkey marketing programs complete with the ability for customization at the local level and real-time monitoring and data analytics.

There are six key elements to every successful co-pay program.

Centralized Software Platform – Co-pay programs should be centralized on one software platform with the user-friendly ability to manage all aspects of the campaigns including approvals, execution, and cost management. One cohesive platform that simplifies and demystifies co-pay marketing can significantly reduce channel partner frustration and increase engagement in local marketing activities.

Dedicated Funds – Brands that invest in co-pay programs at the very beginning gain the attention and loyalty of partners, showing the brand’s commitment to making the program a success. This commitment also gives channel partners confidence to push branded products and services over the long-term because they now see the support from the brand instead of waiting for reimbursement.

Disbursement Flexibility – Being strategic when structuring pay-outs works to encourage a variety of marketing behaviors. For example, some efforts do best working on a flat percentage or set dollar amount for that particular activity. There is no reason to unnecessarily complicate a straightforward process. But there may be instances where tiered co-pay levels are structured to meet tiered goals or a set time frame or using a defined set of criteria.

Integrated Collateral Management and Delivery – Unifying this dynamic part of the marketing program will go a long way to reducing frustration, and in addition, save time and money. Whether it’s tracking collateral inventory or ordering and shipping on demand, there is real bottom-line benefit here.;

DIFM (Do It For Me) – Just having a platform isn’t enough. The most successful programs operating on centralized software platforms use a dedicated support system, a concierge-style approach to building and running the programs for the channel partners. Brands typically have a marketing team, channel partners don’t, roadblock removed.

Dual Measurement – Metrics measure success and also offer insight into channel partners’ behaviors. ( All results should be collected in two ways; measuring leads generated or new customers based on the goals of the marketing campaign, and partner participation in each campaign. These are broad areas and can contain lots of smaller data sets that will more clearly paint a picture of the success of the program. Knowing what your channel partners are participating in is valuable information that can be applied to future programs, used to fine tune and adjust, confirming for those partners your commitment to their success.

Before jumping head first into a new program, take a step back and critically evaluate your existing co-op program. It could be that your co-op program has become a relationship tool rather than a branding or sales strategy. In many cases, brands continue to offer co-op programs to channel partners as a mechanism to maintain the partnership, as if the co-op program, no matter how successful, is a benefit or added value for the channel partner under the broad brand umbrella.
Think critically about your co-op program by asking these questions:

  • Are channel marketing activities increasing sales?
  • Are co-op marketing messages reaching target audiences?
  • Are shared channel partner marketing materials brand compliant?
  • Can you track the effectiveness of co-op marketing campaigns?
  • Is co-op program management too cumbersome and time-consuming for you?
  • Do most channel partners understand the best way to spend co-op funds?
  • Do co-op approvals take too long and cause channel partners to miss marketing opportunities?
  • Are your channel partners frustrated with long reimbursement cycles?

The answers will reveal opportunities for improvement and help identify the types of solutions you need for a co-op model that works, literally.
The new co-pay model, using an automated marketing platform, empowers brands, helping to drive program adoption rates by eliminating the burden of channel partners and the frustrations associated with the old model. Brands have a powerful tool to collect and analyze data across all of their local markets, knowing at any minute how the programs are doing and how their partners are participating. Change can be hard, but as you have seen now, very liberating while allowing for the one thing all brands want – control and insight into the performance of their marketing spend at the local level.

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About the Author

Gary Ritkes

Gary Ritkes oversees all Business Development and Marketing at SproutLoud. He has been a pioneer in the emerging vertical of Distributed Marketing Technology and is an industry leader and innovator with 20+ years experience in graphic communications and marketing strategy. Gary has been involved with SproutLoud since the inception of the company. Prior to joining SproutLoud, Gary was VP of Marketing for Rex Three, Inc., SproutLoud’s first and largest vendor among its network of providers. He has served many Fortune 1000 clients and worldwide advertising agencies in providing marketing technology direction and optimization. He was an original founder of U.S. based Earth Color Group and a co-founder of Advanced Digital Services (ADS) which was sold in 1996 to publicly traded Katz Digital Technologies. He is a current board member of the local Advertising Federation chapter and has served as a member for other national industry associations including the DMA, AGA, and the CMO council.

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