Co-Marketing: What It Is and How You Can Make It Work
Pop Quiz: What do Vistaprint (online printing) and Indeed (online job search engine) have in common? What about Bluehost (website hosting company) and Google? Answer: me. Or more specifically, co-marketing to my business.
I just got back from vacation and, in my stack of mail, there was an envelope from Vistaprint with an offer described on the envelope: $50 credit from Indeed.com which I could use to place a job posting on their website. I’ve never used Indeed, but with a $50 credit I might at least consider them the next time I want to post a job on the internet.
Also in the stack there was a letter from Bluehost telling me that I had a $100 credit for Google AdWords. I’m not AdWord savvy—I know the basics—but having a $100 credit makes me more likely to experiment. I know there is a formula that will work for my business, but I’ve been skittish about the cost of experimenting to figure it out. Perhaps that $100 credit will give me the courage I need.
So what’s going on here? Co-marketing. Co-marketing is where one company agrees to market another company’s products or services. It’s been around forever but I think sometimes we as business owners don’t know about it, forget about it or are afraid to try. Let’s see what these companies did and how you might make co-marketing a successful part of your business growth plan.
- They waited until I bought something. It is a marketing truism that the people most likely to buy are those that have recently bought. I just bought a bunch of note cards and thank you cards from Vistaprint for my business. I also just bought several new domains with hosting through Bluehost. When you are considering co-marketing opportunities, sell to a list of buyers whenever possible. They will be fewer but much more likely to buy.
- They made sure my purchases were indicative of a customer that might also need their services. Buying a bunch of stationery for my business is generally a positive sign—would I be buying note cards and thank you cards if I was in danger of losing the business or planning on folding? Not likely. And would I be buying a bunch of domains if I weren’t planning on growing my online presence? Probably not. It may seem obvious, but just because someone shares potential customers in a general category doesn’t mean you should go after them. Business bankruptcy attorneys probably have a lot of small business clients, but co-marketing to Vistaprint’s small business customers would probably be a waste.
- They made sure the businesses and purchases were similar enough to make a symbiotic or co-marketing relationship meaningful. This is an important step that can give your co-marketing efforts a real advantage. I call them “adjacent space” businesses—businesses that don’t offer what you do but something close enough to make the tie-in feel natural. The fact that I am buying stationery for my business might mean I am doing so well I am in the market for a Lamborghini. Maybe, but it’s a stretch, and the economics of Lamborghini marketing to Vistaprint’s buyers are unlikely to work. On the other hand, if buying stationery indicates my company may be doing well, then it is plausible that I might need to place an ad to hire more help. Similarly, the fact that I bought domains and hosting through Bluehost may mean I am considering enrolling at a technical college to become a software coder. It might mean that, but it’s unlikely, and Devry University is unlikely to recoup the money they might spend marketing to Bluehost’s hosting customers. But if I have domains, I probably want to drive traffic to those websites, and Google seems like a perfect fit.
- They gave me an incentive to try. $50 or $100. Free money is free money. By reversing the purchase risk (if I try and don’t like their offering, they’ve taken on the bulk of the risk and my risk of loss is minimal), they have substantially lowered the barrier to purchase. If I place an ad with indeed.com and it doesn’t produce an army of well-qualified applicants, so what? I’m really not out anything. And if those Google AdWords don’t drive traffic like I hoped they would? Google’s loss, not mine.
- They offered something that has low/negligible cost to them. Indeed.com is offering me $50 credit to place an ad. What do you think their cost of listing my ad on their website is? The marginal cost of placing my ad is probably close to zero for them. And how much do you think it costs Google to run $100 worth of my ads? Although the numbers look big, and convey real value, neither indeed.com nor google.com are taking much of a hit to run my ads. (Yes, I know there are opportunity costs, server costs, the cost of electricity to run everything, etc. I’m not saying it costs them nothing—I’m saying it costs them almost nothing.)
- They make me like the company I bought from even better. Co-marketing efforts should make your customers think more highly of you and the other company. Vistaprint is sending me a gift? How nice. Bluehost is giving me an opportunity to try Google? I like Bluehost! Even though the co-marketing companies are on the hook for copywriting costs, mailing costs, etc., their offers are so good they improve what I think about Vistaprint and Bluehost. It’s important that you only co-market with someone that you want to be associated with and that you only promote companies you feel confident will create a positive association in the mind of your customer.
Here’s the checklist:
- Who has a list of recent buyers who might need what you are selling?
- Are those buyers more likely to need what you’re selling based on what they bought?
- Is what you’re selling a natural tie in with what they are selling so that the relationship seems like “common sense?”
- What kind of incentive can you offer their list of buyers. Don’t just send them a letter saying you’re great, send them a letter saying you’ll prove how great you are by taking risk off the table.
- Offer their buyers something that has high value (real and perceived) that won’t break your budget.
- Make sure your offer is so attractive that their buyers will think more highly of them for introducing you.
One word of caution: agree in writing with the other company before you embark on a co-marketing campaign. If you take time to outline responsibilities, commitments, and expectations, you are much more likely to have a successful co-marketing campaign and much less likely to want to kill someone.
Here’s what got me started: One of my companies was participating in a co-marketing event today. We had printed flyers, made announcements through social media, made phone calls, rearranged our schedules. We spent a lot of time and energy getting ready—you have to if you want it to be great co-marketing partner. Turns out, the only thing we didn’t have this afternoon was the event itself. Without any warning, the organizer of our co-marketing event cancelled it. The odd thing was, they didn’t call us to let us know. The organizer sent an email. No apology, no “let me make this up to you,” nothing. When you co-market, hold up your end of the agreement and do what you said you would.
If you’d like to create a plan to co-market your business but you’re not sure how, please get in touch. It’s what I do.