November 25, 2009

Cooperative marketing will increase sales, instantly!

Cooperative marketing is a surefire way to drum up additional business. Simply put, cooperative marketing is when businesses with a common theme cooperate to market each other’s goods and services.

For example, an electrical contractor may join forces with a plumbing contractor and produce fridge magnets bearing both business names and contact details, and leave one of these co-branded magnets at each job either business goes to.

Another example is when you visit a hotel to find menus and advertisements of local restaurants in the compendium.

The Trust Factor

One of the key reasons that cooperative marketing works is due to the “trust factor.” Each business is putting its reputation in the hands of the other businesses within the marketing cooperative, at least to some extent.

If you had the electricians from the above example come and fix a fault, and they were on time, courteous, and cleaned up, you would naturally assume the plumbers on the shared magnet would demonstrate the same behaviors.

Another example of the trust factor playing a role is in direct mail campaigns. A cold postal mail out, perhaps without even the recipient’s name, will have a much lower success rate then a mail out to a cooperator’s database bearing their logo and a personal introduction.

Everybody Play Nice

Naturally, the flip side of the trust equation is that if a cooperator does the wrong thing, it can reflect poorly on all the members of the marketing cooperative. Be sure to pick your friends wisely, and more importantly, clearly define the relationship and agree on ground rules.

These ground rules may include determinations on:

  1. Cases where members offer a common product or service
  2. What to do when a dispute or complaint arises
  3. How hard a sell should be
  4. How costs associated with any printing, postage, promotional items, etc. will be split
  5. Who is responsible for content, artwork, etc. and what the approval process is before distributing

A Match Made in Heaven

For obvious reasons, businesses whose products and services overlap may not make the best bedfellows. Where products and services do overlap, ideally the businesses should be targeting different markets, for example geographically, price-wise, or business sized in a B2B situation.

The best outcomes however, occur when business owners start to think laterally about whom they could partner up with.

Here are a number of potential common denominators that could yield a good marketing cooperative, with examples:

  1. Physical location – the La Porcetta in Cairns is next door to the cinema, so they offer a “Dinner and a Movie” package deal.
  2. Income bracket – a luxury car dealership could partner with a high-end jeweller.
  3. Point of difference – an after hours medical centre and late night pharmacy can direct patients to one another.
  4. Complimentary services – at 1300 Web Pro, we work with Shayne and the guys from Evolution Studios to get high quality video on customers’ websites.
  5. Age bracket – a day care might share their database with a children’s clothing store.
  6. Unique type of customer – a vet surgery might partner with a pet food store, or a gym might partner with a health food store.

Another way to think laterally about potential matching cooperators is to think about your typical customer and their buying habits.

In the end, you need to find a business that doesn’t necessarily sell the same thing as you, but does sell to the same group of people!

Ok, Now What?

After finding a good partner, or group of partners, to launch a cooperative marketing campaign, you simply need to come up with the campaign itself. Here are a few ideas to get you thinking in the right direction:

  1. Shared mail piece to the collective database (flyer, magnet, whatever)
  2. Common loyalty program (how many ways can you collect Qantas points or Woolworth’s discount vouchers these days?)
  3. Invoice footers or bag stuffers (include a plug for your partner business on the bottom of your invoice, or as a flyer in the customer’s shopping bag, and vice versa)
  4. Running a joint fundraiser for a community group
  5. Offering discounts to one another’s customers
  6. Offering first dibs on hard to get items (luxury brands frequently arrange early access to theatre tickets and sporting events)

Wrap Up

Only a few weeks left before Christmas, which happen to be some of the highest grossing weeks for retail businesses annually. Have a quick brainstorming session in the office and think of two or three businesses that could participate in a cooperative marketing campaign to ensure you are maximising those holiday sales.


Has cooperative marketing worked for your business in the past? Please comment and share your experiences.

We had great feedback last week; thanks to John Gray from John Gray Marketing, Chris Thomas from Dream Machine, and Dave Granfield from Star Gardentown Café for your input. Click here to see what they had to say.


James Deck
1300 Web Pro
Web: www.1300webpro.com.au
Twitter: @1300WebPro

Image credit: lumaxart at flickr

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