There are some compelling reasons why businesses should team up and work together; they can reduce costs by sharing resources, improve the service they offer to their customers, and boost their promotional power by entering into a joint marketing arrangement.
In the case of the latter, promoting other companies’ products and services can be a cost effective way for small businesses to grow, reducing the marketing budget involved, while increasing marketing exposure, and ultimately, sales. The key to a successful joint venture lies in choosing the right organisation to work with, and being clear about what is expected of both parties.
Sarah Brown, director of marketing company inspire2aspire says: “In choosing a company to work with it is critical they share your values, style of working, attitudes to quality, for example, and that you trust each other. [But] however much you trust each other, it is important to clarify the practical details such as who will own and manage any customer data, who invoices and how is any money shared, and when.”
Thinking outside the box
When Bolton-based photography studio fourTwographs and framing business Framearound embarked on a joint venture earlier this year, the owners of both businesses were completely frustrated with their lack of success using conventional marketing channels.
John Bentley, owner of fourTwographs, found it difficult to increase new footfall to his studio, which was based several miles from the town centre. He said: “I’d tried everything, from social media advertising to leafleting. Last year I spent £1,000 on marketing but it failed to deliver anything. I’d tried approaching other businesses with the idea of cross promoting each other, but with little success. I realised later I was approaching the wrong businesses.”
Bentley had been dealing with Framearound owner Les Cliff for two years when he suddenly realised that the shop’s town centre location and relevant customer base presented the opportunity he’d been looking for.
He says: “Les had always bought artwork to show off his frames in store. I suggested that he used local artists’ work, including mine, instead, and rented out some wall space. It would give me the town centre presence and exposure that I needed.”
Cliff had had a similar lack of success with his own promotional efforts, which had included advertising on buses, on menus, in theatre magazines, and in pamphlets delivered to select areas.
He says: “By forging links with John I can capitalise on his experience with using social media and make some new contacts within the art and photography groups that he is involved with. Working with another business in a connected field is still a gamble, but it’s one that we both know should be beneficial if we can help each other in a common goal.”
The joint marketing venture has incurred some initial expenses, but overall Bentley expects to make significant savings on his own marketing expenditure and see an increase in revenue for both businesses.
He says: “It is about helping each other to maximise business opportunities. For me it is about promoting my photography services in a more targeted way to a much bigger potential customer base, and for Framearound, it is about growing that customer base and the business. It is a win-win situation.”
Utilising each other’s skills
In looking for a joint marketing partner, small firms could find what they are looking for outside the business sector. Two years ago, dog behaviourist Peter Archer, owner of Pawsitive Training was asked by local dog rescue centre, Lancaster-based Animal Care to work with some of those who had adopted rescue dogs with behavioural issues.
Animal Care assistant manager Abi Sadler says: “Without Peter’s help some of these dogs would end up being returned to us, and taking up space that we desperately need for new dogs coming in. Since he started working with us, we haven’t had a single dog returned to us.”
For Archer, who had trained dogs in the Army before setting up his own business, the move was the boost he needed. He says: “To succeed in this industry you need word of mouth recommendations from satisfied dog owners. The referrals that have come via Animal Care and the fact that the team promotes my services to potential adopters, has kept me extremely busy.”
Animal Care and Pawsitive Training promote each other through their websites and social media networks. This brings more potential adopters to the rescue centre and its various fundraising events, while Archer has been able to reduce his marketing and advertising spend to zero.
Safeguarding against problems
While these collaborative marketing agreements can go wrong, it is usually because the two parties have different motives, which have not been properly discussed. A formal agreement that sets out how the arrangement will work, who will do what, and how any costs and other financial issues will be handled, should help to avert such issues.
“Problems can arise when assumptions are made and verbally agreed details have not been confirmed in writing,” says marketing director Brown. “One issue for smaller firms can be VAT, if one company is charging another, and the other isn’t registered. Friction can also occur if there appears to be an unequal level of commitment; one party does all the work or bears lots of the costs.
“A good place to find potential collaboration partners is at networking events, particularly where you can meet people regularly and develop a relationship before you work together so that you minimise the risks and maximise the potential. When it works it is great.”
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