MAP Policy Enforcement Guide
Posted on 9th January '18 in MAP Enforcement - Comments
Just getting started with your Minimum Advertised Price Policy? We put together our top blog posts for getting started on the road to MAP compliance. It starts with the right mindset, tools, and process -- luckily it’s all right here!
WHAT IS A MAP POLICY?
Let’s take it one step back and make sure we’re on the same page about what MAP stands for: minimum advertised price. This is the lowest price at which a product can be publicly displayed by a retailer, without restricting the actual sales price.
A minimum advertised price or MAP policy is an offer unilaterally enacted by a manufacturer to ensure their retailer network does not advertise their products below the minimum advertised price.
The MAP policy evolved from the growing online world, which became a hypercompetitive space for online retailers. This meant retailers often resorted to discounting, promotions, and lower prices to stand out and get an edge up on their competitors. With the ease of price checking across the web and as a need for retailers to stay alive, discounting amongst retailers spread like wildfire. The MAP policy was the response to prevent this downward spiral, and protect a manufacturer’s brand image, value, and integrity.
Quite often, MAP violations show up as ‘buy one, get one free’ offers, requests to ‘call / click for price’, or ‘add to cart’ to see pricing, but can be easily missed if a MAP enforcement process is not properly set up.
MAP ENFORCEMENT: YOUR UNKNOWN MARKETING CHANNEL TO BUILD YOUR BRAND
Building brand equity and protecting your legacy takes time, hard work, and commitment. It’s a long-term investment that combines a certain mindset, strategic approach, and the right tools. More importantly, it’s about understanding that the investments you make in your brand today will have an impact in the future. That means every decision you make affects how your brand is perceived by your customers and your end consumers. Brands should not only focus on marketing channels that have tangible dollars associated to them, but start thinking holistically about their value and image.
That includes looking into non-traditional, untapped marketing channels like a MAP policy, where the effects are seen over the long-run. This is where the difficulty lies for most business owners, CEOs, marketing, and salespeople: they can’t concretely report on how a high MAP compliance rate impacts their business today.
Although there may be some loss in sales in the short-term, a MAP policy preserves seller profits margins in the long-term. If your sellers know they’ll be making a certain return on your products, they’ll be encouraged to invest the margins and create a quality customer experience that ultimately leads to increased sales and higher revenues for your products.
DON’T MANUALLY ENFORCE YOUR MAP POLICY, SELLERS CARE
Let’s say you’ve taken the step in the right direction and have gone through the due diligence of putting together a MAP policy. Not only do you have to talk the talk, but you also have to walk the walk: how are you going to enforce your policy?
Most brands start off manually monitoring MAP, but why spend weeks or months finding, contacting, and following up with sellers in violation, when you can do it in hours or days with software? Gone are the days where you have to search across major marketplaces to individually check product prices, or collect seller contact information piece by piece. Stop updating spreadsheets and setting up constant reminders to follow-up with MAP violators and check pricing. There’s technology already built for automatically scouring the web for violators, finding contact information and storing them in a central database, streamlining all information in one spot, and knowing when sellers need to be notified again or prices need to be rechecked without you having to think about it.
Many brands are still on the fence about investing in MAP monitoring software to drive compliance. Yet, little do most brands know: sellers do care that you’re investing in technology to protect their best interest, which plays a role in the success of your overall policy.
To sellers, it signals to them that you’re serious about your MAP policy and the consequences if terms are violated. This helps increase confidence and trust in your products, your brand, and their relationship with you. Software helps prevent price cascading, which allows your products to maintain their value, as well your brand equity. Your sellers can focus on factors beyond price when selling your products. Also, using technology for MAP enforcement demonstrates that you’re working towards the same goals as them and understand the ever changing needs of your sellers and consumers.
With your sellers knowing that you’re investing in software, this can have a number of benefits, including increasing the adoption rate, driving higher overall compliance rates, decreasing sellers’ time to compliance, and driving greater revenue and business growth.
A BREAKDOWN OF THE MAP ENFORCEMENT PROCESS
Before you start looking into MAP monitoring software, let’s first get your MAP enforcement process in place. Here’s our nine step-by-step guide for getting your MAP policy up and running within 30 days.
1. Introduce your MAP policy to your sellers: This initial notification sets the tone for all other communication to follow about your MAP policy, so make sure to start off on the right foot. Keep the message warm and light, as if you’re writing to a friend. No need to instill fear.
2. Provide a quick summary of your MAP policy rollout: After some time, follow-up with your sellers on how the rollout went and provide a reminder of the consequences to violating your policy.
3. Check up on your sellers: Check the prices for all your products across your entire seller network to see who’s violating and who’s in compliance. If you have 10 sellers and few products, this won’t be too bad, but multiply that by 100 and you can see where software comes in.
4. Send an initial warning to violators: Similar to step 1, keep things warm and light. It’s more of a nudge saying ‘hey, we noticed your pricing is below MAP!’ You want to give your seller the benefit of the doubt at this point, the violation might have been an accident.
5. Take another look (or two) at violator prices: Stay consistent with when you check up on your sellers and when you send your notifications. Sellers will notice and will often exploit holes in your process.
6. Don’t forget to follow-up with non-compliant sellers: Step 5 and 6 go hand in hand. If a violating seller becomes a compliant seller, you can also send them a quick thank-you note.
7. Send a final notice to repeat offenders: After a couple notifications, always remember to give a final warning to sellers who are consistently violating your MAP policy outlining the consequences (termination).
8. Remove non-compliant sellers from your network: Don’t be afraid to break up with sellers who are always violating your policy.
9. Let your sellers know how violations are being handled: Every quarter or six months, update your entire seller network on how your MAP policy is doing and what’s being done about non-compliant sellers.
If you need a hand writing a few of the email notifications, get started with three free templates that we put together for you: The Three Must-Have Email Templates for MAP Policy Violators.
HOW DO YOU CHOOSE A MAP MONITORING SOFTWARE FOR YOUR BRAND?
Once you know what kind of process you’d like to setup for monitoring and enforcing your MAP policy, the next task is choosing the right technology for your brand.
It’s important to consider your overall business goals, objectives, and requirements and how different software options meet those needs. Additionally, there are six questions to ask yourself while you’re doing your research into MAP monitoring software:
Will I be provided with actionable, high-quality data?
Will I be able to communicate with my customers?
Will I be able to stay organized and on track with little hassle?
Will I be able to easily learn how to use the software?
Who’s the team behind the technology and what kind of customer support is offered?
How does pricing fit within my budget?
Always keep the long-term, big picture in your head when deciding on the best software for your brand and which will help support you in reaching those goals.
MAP policy in place? Check.
MAP monitoring software setup and running? Check.
If you’re at this stage, you’re already ahead! You understand the importance of a policy and the benefits of using software for MAP enforcement, and you’re keeping your sellers in check and driving MAP compliance.
However, relying on software to be the be-all and end-all of your MAP issues is a big no-no. Technology is only as good as the person or people behind it, it should support your MAP enforcement process that’s already in place. Your brand still needs to dedicate some time and energy to make sure the software works within the process you have set up.
Alternatively, if you’re strapped for resources, Trade Vitality offers a Managed Services plan: we combine our high-tech online dashboard with a dedicated account manager that has the experience and knowledge to properly enforce a brand’s MAP policy, we take care of 99% of the work for you. The experience that Trade Vitality brings to the market puts us in an unique position to understand the trials and tribulations of manual MAP monitoring and enforcement from both the brand and retailer perspective.
Under the Managed Service plan, brands are assigned a dedicated account manager who works with you each step of the way. They contact your sellers in violation, based on criteria that you set. Each week, you receive a report on your violators and an overall look at weekly changes. Our team understands the importance of delivering high-quality customer service, which we extend not only to our own clients but to yours as well -- we become an extension of your team.Trade Vitality’s Managed Service plan provides consistency in your MAP enforcement process, which is key to compliance. All you have to do is ‘set it and forget it’.
USING THE DATA TO UNDERSTAND YOUR BUSINESS
Without the help of software, collecting data in an organized way about your MAP policy wouldn’t be possible. It would likely take a good amount of time before you could make sense of any of it. All that information provides valuable insights into your business, processes, and seller network, which in turn can be used to drive decisions at a strategic and frontline level so you can maintain seller profit margins and protect your brand equity.
The top three areas that we recommend taking a closer look at are:
1. Who are your top brand advocates? Who are the 20% in your seller network that drives 80% of the revenue?
2. Who are your top brand detractors? Who are the ones that are consistently violating your MAP policy? Also, consider the number of products that they have in violation and the number of days on average they stay in violation.
3. What are your top products in violation? Take a look at the length of time each product is in violation on average and the number of sellers who carry that product in violation.
Once you identify the brands and products, you can turn that into action. For instance, you can acknowledge and reward advocates, terminate agreements with detractors, and take time to review your policy and enforcement process.
SELLERS HAVE THEIR THOUGHTS ABOUT YOUR MAP POLICY TOO
Brands have their thoughts about the MAP, but it’s not every day that a retailer will share their perspective. We went to talk to Eddie Lichstein from Autoplicity.com and THMotorsports.com, two ecommerce platforms for the car enthusiast. He gave us his thoughts on the MAP policy from a retailers perspective and shared some things with us that brands don’t get to typically hear from the sellers themselves. Eddie discussed:
The misconception that brands have about getting customers into the door with low prices: regardless of MAP or not, retailers still have costs to get end consumers into their stores and buying products.
The difficulties delivering high customer service levels in today’s online world, but why it’s necessary: Retailers don’t have the margins to necessarily invest in high -quality customer service, but they expect it.
What happens when brands don’t properly enforce their MAP policies: sellers and manufacturers will quickly start to see erosion in revenue until MAP enforcement is done right.
The importance of creating partnerships between brands and retailers: it’s about creating allies and not enemies through communication.The benefits of Trade Vitality’s approach versus other options: our approach to handling MAP violations is borne out of understanding and working together as a team, not through driving compliance through fear.
It’s great to hear a retailer speak so passionately about the MAP and drive home the importance of properly enforcing a MAP policy across the board. Often brands don’t care to hear about what their sellers think about how things are being done with their policy, but sellers have lots to say and it’s quite eye-opening!
CONCLUSION
The MAP policy is a relatively new concept, born out of the growth of the online world. It should not be seen as a cost or something that should be implemented so you can check it off your list, brands should approach their policy as a new marketing channel. It’s a new type of long-term investment that will benefit your brand’s image, value, and integrity. Your MAP policy shouldn’t be something you take lightly; it’s important to use all the right tool to make sure it’s properly enforced. That means using software to drive MAP compliance.
By choosing to use technology to support your MAP enforcement process, you’re letting your sellers know that you care about them and their profit margins. Consistency is key to catching sellers in violation, and if you don’t have the time, Trade Vitality’s Managed Service plan can help you out. Once you start collecting enough data, you’ll be able to start making strategic decisions about your business, sellers, and products.
While many brands see their MAP policy as something they should revisit only once or twice a year, the most successful ones understand that it’s a constant, ongoing process that takes time and effort before seeing results.