Do you view your competitors as companies over which you need to triumph? If so you are probably missing out on a key strategy for competing with large companies and corporations, AND a way to market that has virtually no direct cost: Cross and Co-Marketing.
What Are Cross and Co-Marketing?
For our purposes we need not start nitpicking the differences between cross and co-marketing, but here are some general definitions:
Cross Marketing: The process of marketing across product lines, whether you sell them or not. You may be more familiar with a similar process: upselling.
Co-Marketing: The process of working with one or more companies with the purpose of marketing different products offered by those different companies. In effect, this involves marketing by cooperating with competitors in areas where the services and products do not directly overlap.
Again for our purposes we’ll use the term co-marketing to refer to cooperation across product lines that aims to benefit several companies at once.
Background Information About Competitors and Co-Marketing
In any niche, there will be a number of companies that offer products or services that are related, but are not necessarily identical. The offerings from different companies often address slightly different needs on the part of potential clientele. For example, a small used car dealership may specialize in Volkswagens, while another in pickup trucks. Technically, they are competitors but they serve different markets. Someone interested in carrying stuff around is unlikely to be interested in a “Beetle”, and vice versa.
Another example: A small training company that specializes in teaching people to communicate effectively is in a similar market with another company that offers training in conflict resolution. At first glance, those companies are competitors, but what if they don’t actually offer training seminars that cover the same material? What if the goals of the seminars of each respective company are different? So, they really are not in DIRECT competition.
A final example: Two restaurants, one specializes in Chinese food while the other Italian. Are they in competition? Yes and no, but NOT directly.
The Idea Behind Co-Marketing
Each business has to market their services and products. Businesses often market to identical or at least similar potential customers. Restaurants at a certain level (e.g. fine dining) market to similar clientele BUT offer different experiences and cuisines. Same with the training companies.
Co-marketing involves companies that market to similar populations in cooperating to market together. While co-marketing can involve formal agreements between and among the parties, it’s probably best left as an informal process.
So, as an example, the communication training company promises to refer customers whose needs they cannot meet to the appropriate co-marketing partner that CAN meet the conflict resolution training needs, and vice versa. There’s no need to limit this cooperation to two businesses. A number of businesses can work together to enhance sales, and increase customer awareness of other providers of services and products in which they might have an interest.
The methods available to co-market are only limited by the creativity of the partners. A number of business can set up a small community festival, for example, or offer discounts at their “competitors” stores upon the customer hitting a particular purchase level.
Benefits of Co-Marketing
The benefits here are pretty obvious:
- Direct costs of marketing can be shared, so marketing initiatives will cost less per business.
- The ability to compete with large companies (who have difficulty working with their other large competitors) skyrockets.
- Creative marketing methods can emerge due to different perspectives among the group of businesses working together.
- It’s possible to increase customer awareness of each and all of the cooperating businesses.
- It allows businesses to better meet the needs and wants of customers EVEN if the particular business is unable to do so directly. That enhances customer sense of the business’ helpfulness.
You can probably come up with other benefits.
An example: You go to a hotel to book a room, but it’s full. The receptionist offers to phone around to find a nearby hotel that has a vacancy, OR, refers you to a competitor across the street and provides directions (less useful, but it’s something). That’s co-marketing. Everyone wins. You, the first hotel, and the second hotel.
Tips and Tricks Of Co-Marketing
There are some pitfalls to making co-marketing happen, so here are some concrete tips.
- Cooperation works best when all parties have some degree of confidence in their own businesses. Proprietors who are feeling desperate may not be able to get past the idea that working together makes the pie bigger, and doesn’t mean a net loss of business.
- A good place to start is to identify three or four businesses (essentially a small number) and meet over lunch to discuss possibilities. Over time, that group may grow or shrink, and that’s fine.
- Keep agreements informal. There’s no need for contracts and paperwork unless money changes hands, and this more of a coop. than anything else.
- Try to brainstorm ways to cross-promote beyond simple referrals.
- Consider methods to track referrals from other members in the coop. e.g. discount coupons issued by each business with different codes).
- Be patient and understanding. Small business owners have different schedules, concerns and workloads. That’s one reason why things should be left informal.
- In addition to cross promoting where there are no direct costs, consider ways the members of the group can share direct costs of marketing. For example, a group of businesses in the same strip mall can share the cost of a radio or print ad.
- You need the right people; those who like working with others,and are relatively trustworthy and trusting. For this reason if you want to set up a cooperative, start with people you already know, and feel comfortable with.
- It’s not advisable to put out a “call” to a large group of businesses to ask them to attend a meeting. Start small. Think about the LITTLE things businesses can do together to create a win-win-win.