When you think of MAP monitoring — setting up a process for tracking how your resellers are advertising and selling your products, particularly online — you’re most likely focused on protecting your brand’s reputation. That makes perfect sense: The last thing you want if you sell through a channel is for retailers to engage in a battle for customers by driving your products’ prices down, down, down into discount-bin territory.
(Note: I am using the phrase “MAP monitoring” broadly to describe tracking any type of reseller pricing policy — whether it’s a minimum advertised price or unilateral policy. As we’ve written about previously, there are only a few specific conditions under which a MAP policy will be right for your reseller guidelines.)
If you’ve spent any time researching the various types of reseller pricing policies, you’ve probably also learned that publishing such a policy is a great way to signal to your legitimate resellers that you are serious about protecting their interests and enabling them to earn sufficient profits margins.
But the actual MAP monitoring — your strategy for effectively tracking and enforcing your pricing policy — is important for yet another reason, one that most manufacturers and brand owners rarely if ever think about.
SMART MANUFACTURERS ENGAGE IN MAP MONITORING BECAUSE THEY KNOW THEIR RESALE CHANNEL IS MONITORING THEIR RETAIL PRICING TOO
When you bring a new retail partner into your channel, your published reseller pricing policy (whether it’s a MAP, UPP or other type of pricing guideline) represents an implicit promise your company is making to that reseller:
We will make every effort to protect your margins by keeping other retailers from advertising the same products you’re offering at prices below these minimum-specified amounts.
And because the company knows its competitors are also selling the identical products, your new retailer will likely keep a watchful eye on the Internet — checking to make sure other sellers aren’t unfairly undercutting them by offering your products below the amounts they themselves are honoring.
In other words, you need to set up an effective MAP monitoring program in part because your retailers are going to check your work.
After all, what if one of your legitimate retailers — say, a large brick-and-mortar store that has invested heavily in your brand by buying inventory, setting up in-store displays and training their salesforce on your products — discovers another seller violating your pricing policy? Worse, what if this retailer brings the violation to your attention before your company is even aware of it?
IF A RETAILER DISCOVERS A MAP VIOLATION BEFORE THE MANUFACTURER DOES, THAT CAN DAMAGE THE RELATIONSHIP PERMANENTLY
If a frustrated retailer brings your company evidence of a violation of your own pricing policy — before you caught it yourselves — that can lead to several negative consequences for your relationship.
- It can undermine the retailer’s trust and confidence in the manufacturer.
Your retailer might decide to scale back its future investment in carrying your product line. After all, your poor MAP monitoring program — which allowed them to discover a violation before you were able to spot and address it — sends a signal that this retailer might well be unfairly undersold by grey-market sellers again.
- It can trigger a renegotiation of manufacturer-retailer pricing — with the retailer in the dominant position — and you potentially losing some profit margin or the entire sale
If they discover your MAP monitoring approach is ineffective, and they could be unfairly undercut at any time by a seller not even authorized to represent your products, your legitimate retailer might demand terms more favorable to them in exchange for not dropping your product line entirely.
- It can drive some retailers away completely.
But an even worse outcome for a manufacturer that fails to implement an effective MAP monitoring program — leaving a retailer to catch a violation first — is that the retailer decides it is no longer smart business to carry the manufacturer’s product line at all.
Bottom line: Implementing an effective MAP monitoring process is vital for your relationships with your retail partners because many of these retailers — often your highest-volume, most important partners — are protecting their own interests by monitoring the competitive landscape for your products’ pricing themselves.
All the more reason that you’d better be doing it, too, ideally using an automated online brand protection platform so your company catches violations immediately — and before your retailers discover them. Remember, if a retailer spots a MAP violation before you’ve dealt with it, you could be putting your relationship with that company at risk.
Want to see for yourself how much more effective and affordable automated MAP monitoring can be for your business? Let us give you a free demo.