Have you noticed that a lot of businesses seem to be working together? For example, when a major children’s movie comes out, you can buy special cups with the characters imprinted on them at your local McDonald’s. It’s not a coincidence.
Efforts like these are called “cooperative marketing promotions.” And that is one of the most cost-effective methods you can use to promote your business. Keep in mind that while Fortune 500 companies use these kinds of promotions regularly, they’re by no means limited to large companies.
For a small-business owner, there are several major benefits to striking up strategic alliances with other businesses and executing cooperative promotional programs.
First, you’ll be able to expand your marketing efforts without spending more money for advertising — money that most small businesses don’t have.
R.T., an entrepreneur who owns a martial arts supply company, did that by printing up a huge number of flyers with a 20% discount offer and handing them out to all the martial arts studios in town. In order to get the studio owners to distribute the flyers, he made a deal with them. He agreed that each time someone made a purchase from him as a result of a flyer that came from their studio, he would pay them a commission.
According to R.T., he brought in quite a number of new customers this way.
A second big benefit is that your business can receive a credibility boost by being associated with a related business.
Let’s say, for example, you’re a massage therapist, and you make a deal with a chiropractor to refer some of his patients who are suffering from muscular backaches to you. The automatic credibility you receive when you are in effect “endorsed” by a professional ally like this can be very valuable — especially when your business is in its early growth stages.
There are potential strategic partners for virtually every business. The most obvious strategic alliances are those that have a natural tie-in with your business, but that’s not always necessary. For example, in almost every Subway store I go into, I see promotions for gym memberships, , cruise lines, and other totally unrelated businesses. And since I see this all the time, I figure the strategy must be working.
Let me give you an example of how I used a strategic marketing alliance to create a very successful promotional campaign. I was operating a ballroom-dance business and was trying to find ways to bring in customers without shelling out precious dollars on advertising that I wasn’t sure would work. So I asked myself, “What other kinds of businesses — businesses that I could team up with — would my potential clients be interested in?”
I noticed that quite a few of my clients (possibly one-third of them) were young, engaged couples who were taking lessons from me to prepare themselves for the traditional “first dance as Mr. and Mrs.” that they would be doing at their wedding reception.
So, I opened up the Yellow Pages under “Bridal Shops” and made a list of those that had the biggest ads. Using my computer, I made p a very simple one-page flyer. Then I made a few phone calls. Getting the owners of these bridal shops to hear me out was easy, because I made it clear that I wasn’t trying to sell them advertising. Instead, I was offering them a way to make some additional revenue while helping out their clients.
The deal was that if they handed out my dance instruction flyer to all of their clients, I would give them a 15% commission for every “sale” I made. The price I put on the flyer was 15% higher than the “introductory discount price” I had been offering in my other advertising . . . so it actually cost me nothing to get these new clients. Even better, there was no limit to the number of bridal shops I could do this with. I actually set up cooperative advertising deals with about 10 shops, and soon found myself with an influx of eager dance students.
The bridal shops made some extra money with basically no effort, the young engaged couples received a referral for a service they urgently wanted . . . and I had a whole new revenue stream without risking any capital on advertising.