Viewpoint: It’s Time to Retire 50/50 Co-op Marketing
by Terry Denton /Like you, I have heard all the carefully marshaled arguments from our supplier brethren justifying their ubiquitous 50/50 co-op programs. These rationalizations can usually be summed up by a fervent insistence that travel agencies must have some “skin in the game.”
Well, I for one don’t mind having “skin in the game,” but I would like to have enough skin left over to keep my admittedly knobby skeletal structure discretely covered.
Here is why the hoary tradition of 50/50 co-op does not strike us over here on the retail side of things as remotely even-steven.
What’s wrong with 50/50
• In the first place, the marketing budget of most suppliers is obviously greater in real terms than the budgets of all but the most successful travel agencies. Suppliers’ marketing budgets’ also comprise a larger percentage of their revenue.
Suppliers are in the enviable position of having enough revenue to cover normal operating costs and meaningful marketing, not something most travel agencies can tout. When you consider the relative scale, all $500 investments are not necessarily created equal.
• In the vast majority of cases, the supplier expects the agent to come up with the creative idea, do all the strategic planning and execute the entire campaign. If it happens to be a consumer event and the supplier’s schedule permits, they will (usually) graciously show up and extol the virtues of their product.
• The supplier expects the travel agent to front all the costs out of the very limited operating capital of their small business. Depending on the marketing strategy, this can tie up a significant portion of an agency’s scant resources.
• The supplier expects the agency to keep meticulous records, assemble sometimes complex documentation and oftentimes submit their request in hard copy, through snail mail, with tear sheets and multiple invoices.
• The travel agency is expected to patiently wait for remuneration to work its way through the labyrinth of the supplier’s institutional corridors. It can take, and in our case often has taken, several months before the check finds its way, bloodied and bruised by its torturous journey, into our modest bank account.
A better idea
We love you beloved suppliers. We honestly do! But we would like to propose a different approach.
When one of your loyal travel agency partners brings you an intriguing marketing proposal, why don’t you evaluate what you think the idea might be worth to you, then tell the agency how much you are willing to commit to the idea from their marketing funds allotment.
This may seem naïve, but if you don’t trust the partner in question, why the heck are you marketing with them?
This suggestion, if universally adopted, would simplify an onerous process, reduce administrative overload on all parties and virtually eliminate unused marketing funds.
And hey, if you miss the good old days of co-op marketing, you can always visit the “old plan” at The Villages and wax nostalgic over a round of golf or hand of bridge!
Terry Denton is president and co-owner of Travel Leaders / Main Street Travel, a $17 million full-service agency headquartered in Fort Worth, Texas. He writes an entertaining travel blog called TravelByTerry.com.