Posted on 27th September '16 in MAP Enforcement - Comments
This is the second post of our two-part series, A Beginner's Guide to MAP Policies. If you missed the first part, you can get caught up with our previous post, "What is a MAP Policy?"
Now, it’s time for the fun part! Armed with an understanding of the basics of a MAP Pricing policy - what it is, how it came about in the online world, and why you need - you’re ready to get your hands dirty!
Building and implementing a rinse and repeat cycle for finding, catching, and contacting your MAP policy violators is critical to your profit margins. Having a step-by-step guide for monitoring and enforcing your policy means reducing the number of cracks where violations can silently fall to the wayside.
We don’t want to let that happen! We’ve seen far too many brands slowly diminish in brand and product value, without evening knowing it.
Assuming you have your MAP agreement ready to go; it’s time to buckle up, you’re in for a bumpy ride. If not, start reading about the laws surrounding MAP policies and if they're legal or not.
Part I: Let the world know about your MAP policy
You’ve put in the time and effort to craft a MAP policy for your brand, and now it’s time to bellow from the rooftop and let everyone know.
Step 1 - Introduce your MAP policy to your sellers, distributors, and industry
First off, we like to think of a MAP policy as your friend; your pal that’s on your side. This mindset is extremely important when introducing your policy to your sellers: your feelings about your policy will be transparent in your introduction and set the tone for how your sellers will react. Your sellers often prefer brands that have a strong MAP enforcement process in place.
First impressions matter! Think of it as if you’re connecting two friends: a warm, nice, light message to a friend rather than a punitive, cold letter to someone who’s done or will do something wrong. You want to clearly outline when your policy will be launching and provide your sellers with at least one week to change their prices - we recommend 30 days. The more notice, the better.
Along with the tone, the most important part is your explanation for why you’re rolling out this new policy. You, us, your sellers, we’re all in the same fight to maintain your margins and protect your brand, and a MAP policy is a step in that direction. Your brand is only as good as your weakest seller, and if they aren’t given the proper support to promote your products, you’ll both lose out.
Last, but not least, the end of your introduction should highlight what will happen if a seller violates the policy, or should we say, the consequences of their actions.
If you have distributors, make sure you contact them first to ensure that they'll put your sellers on a "Do Not Sell" list if they don't follow your MAP policy. Your distributors should be your allies - if they're not on your side, they're fighting against you.
Just so everyone knows, have your industry's influential websites run an article that tells dealers and retailers that your brand now has a MAP policy that will be enforced within 30 days (or however long you decide for the 'grace period'). Industry forums are also a good avenue to share the news.
Step 2 - Provide a quick summary of your MAP policy rollout
This is where most brands go wrong. We’ve seen it for ourselves: brands will roll out their MAP policy and disappear like a ghost. This is a big no-no and actually leaves the wrong impression with sellers. No follow-up signals there’s probably no bite to your new policy, making it harder from the get go to drive policy adoption. You want to get things right from the beginning because it’s a heck of a lot harder to do it later on.
Keep your update short and sweet. It’s a simple note to let your sellers know that the policy is top of mind for your brand. Share the compliance rate and don’t forget to thank the sellers who comply. We’d even recommend going the extra mile and sending them an individual email. (Hey, gratitude and appreciation go a long way!) Finally, lay out the remainder of the consequences faced by those sellers who have yet to comply.
Before telling the world about your new policy, make sure you have a few things on hand:
A pdf and/or URL to your MAP policy
An organized database of all your sellers and their contact information
Warm, friendly email templates to introduce how you’re helping your sellers
Part II: Stay on it #mapmonitoring #mapenforcement
Don’t just monitor your sellers when you feel like it.
Just like building any new habit, you need to add monitoring into your routine. Make it a priority and don’t let anyone interrupt that time. Whether it’s in your calendar as an event, a reminder on your task list, or your co-worker nudging you on the shoulder - you need to be consistent with when and how you monitor.
You’re not just looking for violators, you’re looking for the chips and cracks that are damaging your brand and diminishing your profit margins.
Step 3: Check up on your sellers
As soon as the 'grace period' ends, let the fun begin aka. monitoring! This step is actually the simplest, but one of the most time-consuming parts of the process: finding all of your sellers and ensuring their prices align with your MAP policy.
For a smaller brand with fewer products and sellers, this is a lessor feat. Multiply that by 100’s or 1000’s, and you could be MAP monitoring all day, every day. (Good thing there’s tech for that!)
You shouldn’t take more than 2-3 days with a single round of monitoring because sellers can easily change their prices with a press of a button - they may be a good, compliant seller one day and non-compliant seller the next.
Step 4: Send an initial warning to violators
Attacking a seller and pointing fingers at the first sight of a violation isn’t a good idea. Remember, approach with some TLC.
There are sellers out there that may have accidentally violated your policy because it was simply a mistake or they were following a previous agreement. Regardless, they were never actively intending to do harm. Just ease into it with a nice, friendly “oh hey, your pricing is wrong” message and include everything they need to get things right: where you found the violation, the price, the date, and a screenshot, along with your MAP policy and a deadline.
An email like this should do the trick:
This is [introduce yourself] from [Brand]. In an effort to proactively monitor our MAP Policy across the web, we noticed that you are selling one of our products below our policy guidelines.
Violation Date: April 4, 2016 (see attached screenshot)
Advertised Price vs. MAP Price: $YY vx. $XX
We understand that, more often than not, pricing issues are not intentional. Consider this e-mail a notice that your pricing doesn't appear to be complying with our MAP Policy. Please refer to the attached for a copy of our MAP Policy.
If this is the first you’re hearing about this, not to worry, please go ahead and update pricing right away for all [Brand] items on your website and any other channels, if applicable. We’ll follow-up if necessary.
Being friendly, welcoming, and professional pays off. Evoking “fear” and using a punitive tone won’t get you anywhere.
Step 5: Take another look (or two) at violator prices
With each touchpoint with your violating seller, always make sure to review their pricing two or three days later. Why? Giving them the benefit of the doubt, they may have forgotten to do it, the task got deprioritized, or even if they did change their pricing immediately, it takes time for things to refresh across the web. All good things come with time.
Step 6: Don’t forget to follow-up with non-compliant sellers
This is where brands drop the ball - they don’t ever follow-up. That’s where control over your MAP compliance rates falls fast.
Follow-up shows you’re serious. It demonstrates that you mean business and that those few cents (or dollars) aren’t just something you’ll push aside.
Not sending a second email to violators screams “I don’t care about my brand!”. If that’s the case, then why should your sellers?
Send a second email once the deadline hits from your initial warning (step 4). Following your own deadlines is another way to emphasize your commitment to MAP compliance. Remind them to change their pricing right at the top of the email followed by violation details and a new deadline. This time around, you’ll want to bring up the consequences.
Remember to spend some extra time and show a little love to the sellers that immediately correct their pricing. These guys are typically the ones who violated on accident. You want to encourage them to stay compliant with some positive reinforcement - drop them a quick note to say thank you.
Step 7: Send a final notice to repeat offenders
Everyone’s different and there’s no copy/cut paste with how many follow-up emails you should send before you deliver a final notice. If you’re dead serious about your MAP policy, you’ll need to cut ties with anyone who’s ruining things for you and everyone else.
You’ll need to be firm and assertive, yet professional. Clearly explain what’ll happen if the seller doesn’t comply within your deadline, and cap it off with why you implemented a policy in the first place. See our example below:
Hello [Seller Name],
This email is the final notice to inform you that your pricing doesn't appear to be in compliance with our MAP Policy.
Given our previous notifications, we’ve reviewed our agreement and have determined that there are grounds for termination for failure to comply with our MAP policy. If [Seller] fails to update pricing across your website and other sales channels within three business days, we will send a Cease and Desist letter.
Below are the details for the product that is in violation of our policy guidelines:
April 13, 2016 - Final Notice (see attached screenshot)
April 7, 2016 - Second Warning (see attached screenshot)
April 4, 2016 - Initial Warning (see attached screenshot)
Advertised Price vs. MAP Price: $YY vx. $XX
Protecting [Brand]’s brand is important to ensure the success of our entire seller network. Our MAP policy is a necessary step to maintain the value and integrity of [Brand]’s image and products for the success of our sellers.
Step 8: Remove non-compliant sellers from your network
If all else fails, break it off with the shady retailer. You don’t want someone in your network who’s business model is based on deceit, robbing your other valuable sellers of their profit margins and your brand’s good name.
Directly ask them to remove your product and/or get your distributor(s) to stop selling your products to them. You have to be willing to stop at nothing to protect your brand and maintain your profit margins. If you let one or two violators get away, you’re setting up a dangerous precedence for others to do the same.
Having the 411 on your sellers requires the right tools:
An organized database of all your sellers and their contact information
A communication tracker to stay on top of all the back and forth
Setup a consistent schedule of when you’ll monitor and contact your sellers - we suggest a three-warning system
Email templates that will increase your chances of getting violators to comply
We’ve carefully crafted a sequence of FREE email templates to help you save time and drive higher compliance rates. It’s all in how you say something. Feel free to use them as-is or to update your existing messaging for steps four, six, and seven.
Part III: Look under the hood
It’s time to take things one step further and explore some territory that you probably didn’t consider. We know how overwhelming it can get with finding, identifying, and contacting violators.
With every violation, violating seller turned compliant seller, to the number of violations a seller has in ratio to the number of days a product is in violation, tell you boat loads about your business and how to improve.
Keeping tabs in a neatly, organized spreadsheet is a step forward, but to really get your hands dirty, you’ll need some powerful tech support to help you out.
Step 9: Take a look at key metrics every quarter
If the term “quantified” business is new to you, let’s take it slow.
Get to know your top brand advocates, the ones who are always in compliance - they are the champions of your business. Equally, keep a hawk eye on your top brand detractors, the sellers that are consistently violating - they’re in it for the quick buck. Stay on top of which products are continuously in violation - aside from being high profit margin or selling well, what other factors are enabling retailers to violate your MAP policy?
If you want to dial it up a notch, look deeper into your detractors: how many products are they violating and how many days are they typically in violation? Also, dig into your top products: what is the average length of time that each product is in violation and how many sellers carry that product?
Setup benchmarks. You don’t want to be checking on numbers and not know where you started, which leads us to the next step...
Step 10: No analysis paralysis
Take action based on your benchmarks.
For instance, reward your advocates. Go beyond an email, send them a handwritten card or feature them in a blog post or newsletter. Terminate agreements with your brand detractors.
Review your MAP policy and enforcement process once or twice a year, is there something that’s enabling certain products to always be in violation?
Most importantly, constantly think about how to crank the gears on your process to increase MAP compliance. If one part of your process is faulty, everything else will go down the drain. Have the right system and tools in place and you’ll be winning the battle.
Part IV: Circle back, always
Once a year, let your sellers know that “yep, we’re still on this!" This keeps your process tight and lets your sellers know your MAP policy is top of mind, all year round. It’s also a subtle way of saying “hey, we got your back” to your good sellers and “you can’t hide from us” to your shady sellers.
Step 11: Let your sellers know how violations are being handled
Before getting to the meat of the email, thank your retailers in compliance - they’ll know who they are. Then, let everyone know what’s being done about violators. This will reassure your supporters, and hopefully inject some initiative into your non-compliant guys. Kindly remind everyone about the terms of your MAP policy agreement and consequences, just in case they forgot. ;)
DRIVING A SOLID MAP POLICY PROCESS
Phew! If you can’t remember all eleven steps for keeping your MAP policy in check, remember these three things:
Our crash course on MAP policy should give you an idea about how to get started on the road to minimizing and eliminating any erosion being done to your brand. Here’s a snapshot of our eleven step guide to monitoring and enforcing your policy:
Introduce your MAP policy to your sellers
Provide a quick summary of your MAP policy rollout
Check up on your sellers
Send an initial warning to violators
Take another look (or two) at violator prices
Don’t forget to follow-up with non-compliant sellers
Send a final notice to repeat offenders
Remove non-compliant sellers from your network
Take a look at key metrics every quarter
No analysis paralysis
Let your sellers know how violations are being handled
Whether you copy/cut our process, use it as a starting point, or create your own, always make sure you walk the talk, lead with being friendly and nice, and understand how your policy fits in th