Cooperative Marketing

Do you remember the lessons you were taught in grammar school? Do you remember what your teachers used to say about sharing and cooperating? Perhaps those years are well behind you, and the school work is not so fresh in your minds; however, the lessons we learned back then are as important now as a small-business owner as they were as children.

Learning To Cooperate

Cooperation, sharing and working together sound like ideal aspirations in a perfect world but seems far from a solution to age-old business questions such as: "How do I attract more customers?" and "How do I make more money?" However, these simple lessons may be just the perfect solution. Cooperative marketing, an often spoken about but more often unused form of marketing, offers a number of great benefits to the small-business owner who correctly utilizes it as a part of his or her overall marketing plan.

In many of my marketing seminars I define cooperative marketing as an arrangement where two or more organizations work together to combine assets for the objective of reaching a defined market segment for a benefit they individually desire. In plain English this means you and another business owner work together or share in the cost of marketing to potential customers to make more money. Cooperative marketing provides business owners with a very unique advantage over other forms of marketing as well as improving your odds of running a successful marketing campaign.

For example, in a traditional marketing effort such as a local advertisement, a salon owner might choose a publication that reaches a very large audience in many areas of your community with no guarantees of exactly who will see it. With that ad you would hope that a potential customer who lives close enough and has an interest in your services would notice and respond. In addition, you also would hope that enough potential customers would react to make the ad worth the cost of running it in the first place. Consequently, in this example, the salon owner is taking a financial risk without much assurance that the effort is reaching the target audience.

Conversely, in a cooperative effort, a salon owner almost can guarantee that the vast majority of the audience will notice the advertisement as well as be potential customers that are interested in the services he or she provides. In addition, by virtue of your relationship with another successful business you also will cut your costs for the effort and increase your chances of success by combining your resources and credibility.

For instance, you might establish a relationship with a local gym owner who has a large membership database. Each of the gym's members is a potential customer for your salon as would your current members be a potential customer of the gym. By coming to an agreement to develop a direct mail piece that features both of your businesses and offering a promotion for members of each of the businesses when they use the other's services, you have completed a cooperative ad. In addition, you also would then split the production and postage cost of this venture.

What you effectively have done now is reach an audience of potential customers who you know live close by virtue of their membership to a nearby business. Additionally, you know the people you have reached might have an interest in your services by taking into account their fitness habits and you have gained their attention because of your relationship and endorsement from a business they already use.

Cooperative marketing efforts do not have to be limited to such obvious examples. By virtue of the definition, any arrangement you can think of that mutually is beneficial to two or more parties is considered cooperative. The objective is to look for relationships that will yield the greatest benefit for both parties. Moreover, you want alliances that will help you reach a more precise target audience and the one that will be most receptive.

Expanding upon our previous example, put aside the obvious benefit the gym owner would receive if they used your database in an effort to attract new customers. If a salon owner approached the gym owner with the goal of helping them increase goodwill with his current customers while potentially bringing in more business and the promise of no out of pocket expense, you probably would find the gym owner extremely interested. You might offer to pay all the costs of sending out specialty greeting cards to the gym owner's customers in exchange for the right to use the gym's membership database in your own mailings along with the gym's personal endorsement.

What you then could do is send a variety of greeting cards commemorating special occasions such as birthdays or anniversaries to the gym's customers offering special promotional gifts for your services using a personal endorsement. What you effectively have done is reach a highly receptive audience at a time when their anti-marketing radar is down. You have slipped in an advertisement to a potential new customer, garnered goodwill for two businesses and increased your chance of marketing success for the cost of a postage stamp and a handshake.

Still not convinced that cooperative marketing works? Think about how many examples are around you everyday and perhaps have persuaded you to try something new. For example, when a credit-card company offers you a new card with the promise of frequent-flyer miles on a specific airline. When your favorite professional sports team invites you to a game with the promise of receiving a free Chase Bank® calendar, Oscar Mayer® seat cushion or fan appreciation Beanie Babie®, those are proven cooperative marketing promotions which benefit both the team and the company who is supplying the give-away item.

Cooperative marketing efforts do not have to be limited to relationships between small businesses. Your small business has assets that potentially are valuable to large businesses as well. In addition, by partnering with a large business most times it will make the effort even less costly to the salon owner. For instance, many of the large lotion and equipment manufacturing companies in the indoor tanning industry have complete cooperative marketing departments with an entire team of experts and resources just waiting to assist salon owners in their marketing efforts. What you are providing them with is a way to increase product awareness and sales.

While it sounds like a very attractive proposition, the biggest stumbling block to a cooperative marketing effort usually is narrowed down to one thing--you. Typically, the business owner is the one who is standing in the way of any successful marketing campaign, but even more so in the case of cooperative marketing.

Is it self-sabotage? Why would it be that the business owner themselves would cause a cooperative marketing campaign to fail? Simply, it is fear, mistrust and in most cases, passivity that most often destroys a potentially successful campaign or never allows one to get started in the first place.

All marketing takes effort and a certain amount of guts. Effort to put the whole project together and guts enough to take a leap with your checkbook and ego to see if it will work. Cooperative marketing just takes more of these aspects as well as taking an agreement between two different business owners, each with their own selfish goals and steadfast beliefs in their ideas.

It is understandable how, as small-business owners, we would fear a cooperative marketing effort because we want to avoid conflict with other strong-willed business owners. It's also understandable how we might be paranoid and mistrustful, worried that someone is going to steal our database or other valuable ideas. Finally it is understandable how we might just be too caught up in our other obligations to try and establish a relationship with another business owner and convince them of the idea of sharing the cost as well as the benefit of a cooperative campaign. It simply is easier to continue doing the same things we have been doing and getting the same results.

It is this reluctance that never allows a potentially great idea and valuable relationship to start, let alone work. You are guaranteed to get only what you already receive if you don't strive for more.

Don't be afraid to take the first step. Only you can help yourself become more successful. Use this time tested and proven method of marketing and I promise you will be satisfied with the results and probably even more satisfied with the invaluable relationship which you will establish.