In 2009, Kerry O’Brien, owner of T.F. O’Brien and Company Inc, a heating ventilation and air conditioning provider in New Hyde Park, N.Y., was approached by an AC manufacturer to partner and expand both companies’ marketing efforts. That manufacturer was interested in helping the HVAC services provider take a whole new approach to marketing their company.
In co-op marketing, a manufacturer (or other type of company) pays a percentage of advertising costs for a customer’s advertising programs. In turn, the manufacturer’s brand is often mentioned in the advertising.
In T.F. O’Brien’s and Company’s case, not only did it end up partnering with the AC manufacturer, it introduced them to an ad agency, which helped it establish a whole advertising program and campaign.
“A lot of manufacturers have cooperative advertising—that’s not uncommon,” O’Brien says. “We looked at our whole advertising program comprehensively instead of piecemeal.”
To establish the relationship with the AC manufacturer, T.F. O’Brien and Company initially committed $50,000 toward advertising. The AC manufacturer supplemented that initial $50,000 investment by providing about 25 percent, or around $12,500, and covered a portion of the agency fees, O’Brien said. In addition, the AC manufacturer provided co-op dollars, which was a separate investment based on sales.
“It’s an upfront negotiation. This is not based on sales; it’s based on investment,” O’Brien says.
This agreement between T.F. O’Brien and Company and the AC manufacturer is renegotiated annually when the company reviews their marketing efforts.
Then a marketing company devised a comprehensive marketing program. The marketing company helped T.F. O’Brien and Company identify its target market and what message it wanted to send to potential customers, while simultaneously factoring in the amount of money the company wanted to spend on advertising and analyzing the different avenues on where to spend its ad dollars. T.F. O’Brien and Company ultimately decided on a monthly e-blast, certain direct mail advertising and TV ads. The ad agency then helped T.F. O’Brien and Company create the message they wanted to send to potential customers.
“The focus is really on selling us, but we also have the manufacturer branding in there,” O’Brien says. “The manufacturer picked up a piece of it and we picked up a piece of it, but we looked at the whole year in advance and together decided we were going to spend money on these three items.”
Today, O’Brien and Company’s advertising is set for the year. He has calculated where and how ad dollars will be spent each month. Before establishing this partnership, his marketing was very piecemeal, taking ad opportunities when they were presented or when he had time to create something.
“My marketing is now done by design, not by opportunity,” he said. “We anticipate when our slow season is going to be, when our busy season is going to be and what type of marketing we’re going to do or not do, depending upon the season, time of year and everything else. To large companies, this is fundamental—to a small company this seems completely over the top.”
This approach has helped T.F. O’Brien look at their advertising comprehensively as well as proactively versus reactively—an approach he recommends to all business owners. “To really get a better handle on your marketing, it’s important to really look at it in its entirety,” O’Brien says. “An astute manufacturer can create ways to help make that happen for somebody. [The AC manufacturer] led me in that direction, and now we partner together in our advertising effort. Now I am very loyal to that manufacturer because they’re the ones that helped us grow in that aspect.”
The results have been significant. T.F. O’Brien and Company has seen 20 percent growth over the past for four years.—Amalia Deligiannis