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Using Your MAP Policy to Understand Your Business

Posted on 7th June '16 in Monitoring - Comments

Using Your MAP Policy to Understand Your Business

We know you have your hands full monitoring and enforcing your MAP policy, but there is a lot of interesting stuff to be found under the sea of information that’s being collected.


This “stuff” can be translated into very useful data that will provide valuable insights into your business, methods, and seller network. In turn, you can use these insights to drive decisions at a strategic and frontline level so you're maintaining profit margins.


The problem is, most brands are so consumed with increasing their MAP compliance rates that they don’t have time to consider all this information. If they do, it’s rare that they know what they should be looking for and what to do with it.


In today’s post we will look at three areas of your MAP policy and how you can turn that information into actionable steps for protecting your brand and improving your business.



UNDERSTANDING YOUR BUSINESS

The most successful companies are driven by data. This means looking at trends and patterns within everyday activities to understand what’s working, what’s not working, and what you need to do to move forward toward success.


Unfortunately, this is easier said than done. Many are confused about what their MAP policy trends are telling them. We’re here to provide some key considerations for monitoring MAP compliance.


Who are your top brand advocates?

There are always a handful of sellers who contribute to your success as a brand. Think of the 80/20 rule: 20% of your sellers drive 80% of revenue in the marketplace. These are your champions- your unconditional supporters- the ones you can count on. Knowing who these sellers are and how they help build your brand is equally as important as knowing which sellers are doing the opposite.


In the context of your MAP policy, your brand advocates always comply. Their listings for your products always abide by your minimum advertised price.


They understand why it’s important to comply for all sellers: discounting damages the brand and product, which lowers the value from the customer’s perspective. Abiding by the MAP policy keeps competition fair so they're maintaining profit margins for everyone, while preventing retailers from underselling and engaging in price wars.


The advocates believe in your product and your brand. In turn, it’s your responsibility to show them that you are fully invested in supporting them so they can be successful with your product in the marketplace.


Who are your top brand detractors?

Just as there are top advocates, there are sellers who take away from your success. These are your top brand detractors- the ones damaging your brand. In the eyes of other sellers and customers, they’re decreasing the value and integrity of your products in the marketplace by not complying with your MAP policy. Typically, these sellers will offer price-match guarantees, buy-1-get-1 deals, or hide pricing until the customer gets to checkout.


Why do detractors do this? Simply put, they’re only in it for the quick buck. They have no regard for the other sellers nor do they consider how it actually affects their profit margins in the long run. They are well aware of what they are doing and are consistently making the choice to violate your MAP policy, in spite of the consequences.


In addition to looking at which sellers are your detractors, you should also look at...


  • The number of products that they’re violating. Are they advertising prices below your policy for all of your products that they’re carrying? Or is it only for a few? If the latter, why these specific products over the others? What channels are they being sold on?

  • The number of days in violation. Why have they been in violation for so long? Is it because the seller has ignored your notifications, or because you haven’t properly set up a consistent monitoring and enforcement process? Is it a combination of both?


Knowing your top violators and having the data is proof in the pudding! It tells you who your repeat offenders are and what you need to do about them, or more bluntly, who you need to kick to the curb.


What are your top products in violation?

Data from your MAP policy process should tell you which products are consistently in violation by sellers. You can measure this in two ways...


  • By the length of time that each product is in violation amongst all sellers. For example: product A is in violation for 100 days by seller 1, whereas product B is in violation for 80 days by seller 2.

  • By number of sellers who carry that product in violation. For example: product A is in violation by 20 sellers, whereas product B is in violation by 15 sellers.


As you look at your top products in violation, ask yourself...


  • Why are these specific products in violation?

  • What aspects of the product are leading sellers to violate our MAP policy?

  • How has our brand enabled / made it easier for sellers to violate for these products?

  • Should we add specific restrictions for these products?



TAKING ACTION

So now you know who your top brand advocates and detractors are, and which products are in violation by length of time and number of sellers. But what now?


If you’re not used to looking at these metrics or have never considered them before, it’s probably an overwhelming amount of information to think about, let alone know what to do with. Here are a few actionable steps on what you can do with your newfound information:


  • Reward your brand advocates - When it comes to your MAP policy, you don’t want to only focus on the bad. You need to highlight the good as well! Create a strategy or plan around rewarding your distributors and sellers who show support by complying with your MAP policy. This could be in the form of a handwritten card expressing your appreciation for their business or highlighting them in your blog or newsletter. Positive reinforcement works!

  • Terminate agreements with brand detractors - Don’t be afraid to end seller relationships. In the long term, they are doing more harm than good to your brand and business. Ensure you have a Cease and Desist letter prepared and that you have a plan in place once you deliver the letter. It may be a battle, but doing nothing will eventually cause a lot more frustration and headaches.

  • Review your MAP policy agreement - Every few months, it’s a good idea to review your policy and see if there are any modifications that need to be made to address issues that you might see. We don’t recommend changing your agreement too often. However, for instance, if you see that the same products are constantly in violation, maybe consider adding in a special term in your policy for these products.

  • Review your MAP enforcement process - Aside from the fact that there will always be a few bad apples in your network of sellers, many of your MAP policy violations can be addressed through how you monitor and enforce your policy. Are you monitoring your products regularly? Are you following up with the sellers in violation? Are you applying the consequences that you outlined in your agreement to your violators? Do you have the right tools setup to help you be efficient in the process? If you’re answering “no” to a majority of these questions, you may want to consider moving to a software solution.



CONCLUSION

As you create your monitoring and enforcement process, or if you already have one in place, we highly recommend building out the next step: making sense of all the information that you’re collecting about your policy and applying it to your business.


To review, the three main things to look for are:


  1. Your top brand advocates: make sure to acknowledge and reward them!

  2. Your top brand detractors: be ready to sever seller relations if they are not willing to comply.

  3. Your top violated products: this will let you know if your MAP policy needs adjustment.


This can be done using a spreadsheet if you are manually tracking everything; however, to reduce the risk of error and save time and effort, consider moving to a software that’ll spare you the hassle. The insights that you uncover can provide upper/senior management with the right information to make the best decisions for the business.


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