MAP Policy: 3 Incentives to Include

By: Andrew Schydlowsky (TrackStreet) September 5, 2017

Most discussions of minimum advertised price (MAP) policy are centered on the sticks — effective ways to threaten and punish resellers who violate the policy by advertising products below the manufacturer’s MAP-approved levels.

MAP Policy

This makes sense. A MAP policy exists, after all, to protect the manufacturer and its resale partners against being unfairly undersold. When a retailer violates a company’s MAP policy — whether the business is an official member of the product’s resale channel or an unauthorized gray-market retailer — this can harm the manufacturer’s legitimate sales partners and eventually erode the value of its brand. So it’s a perfectly logical strategy to focus your MAP policy on warning resellers about the consequences of violating the policy.

But using sticks is only one way to develop and enforce an effective MAP policy. A manufacturer or brand can also use carrots — positive incentives — to encourage its resellers to adhere to the company’s MAP pricing.

 

Here are a few ideas for including incentives in your MAP policy.

 

  1.   Offer special wholesale pricing

While your MAP policy sets a floor at which resellers can advertise your products to their customers, you can still give your honorable, MAP-abiding resale partners the ability to increase their own margins by offering them reduced pricing on your inventory.

When retailers know by following your MAP policy they’ll be able to increase the spread between what they pay you for your products and the prices they can advertise those products, they’ll have a clear financial incentive for adhering to the policy.

 

  1.   Offer co-op advertising or marketing funds

As you know, your resellers’ successes with your products are your successes as well. So offering to share in the costs of advertising, to help bring your products to the attention of your resellers’ customers, represents a win-win.

Often a MAP policy’s language will focus on the stick side of the co-op advertising issue — discussing those funds only in the sense that a reseller who violates the MAP policy risks losing access to them. But you should also turn this issue around and make the ability to gain access to shared advertising dollars a positive incentive for your resale partners to always adhere to your MAP pricing.

 

  1.   Offer a “Verified Authorized Retailer” trust icon

This is a great way to help those honorable retailers in your channel stand out as the trustworthy, high-quality sellers they are.

The authorized dealer program is another clause in many MAP policies that manufacturers use only as a stick — only as a threat that states if a member of the company’s authorized dealer program violates the terms of the MAP policy, that reseller can lose its standing.

But this can and should also be turned around and used as a carrot, a positive incentive for a retailer to abide by your MAP policy.

When you offer membership in your authorized dealer program — and a “Verified Authorized Retailer” trust icon — to those resellers who are abiding by your MAP pricing, you allow those businesses to establish immediate trust with their customers.

For this program to be as effective as possible, the trust badge should be clickable and a live link to your network (or the network of your automated MAP policy enforcement platform). This way, when a customer clicks on the icon, they will see a real-time popup explaining that the retail site is indeed an officially recognized seller of your brand.

Like the other suggestions here, when you use your authorized dealer program and a Verified Authorized Retailer trust icon for those resellers who earn it by following your MAP policy, you will benefit everyone — your company, your reputable resellers, and your customers.

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