Co-marketing allows you to leverage the marketing assets of other organizations for mutual gain. By partnering with influential companies in your market, you get more customers and sales faster and with less risk and higher profits.
In a typical co-marketing arrangement, a merchant matches up with a company that promotes the merchant’s product to the promoter’s own customer list. Because the promoter has established trust with its clients sales conversion rates can be very high.
Co-marketing makes it easier to sell. A list of buyers often converts better than a list of non-buyers. When you partner with someone with a warm-list of loyal buyers you add credibility to your offer. A tiny warm-list of relevant, loyal buyers can easily outsell a larger, cold-list. By creating strategic alliances with related businesses you can scale your sales faster and more efficiently, and with less risk than traditional advertising and promotions.
Co-marketing mitigates much of the costs and risks of associated with marketing. That’s because you only pay for results. The merchant does not incur a marketing expense unless results are accrued. Your promoting partner only gets paid when they produce sales. Only after the sale is made and the revenue collected and booked in your account does the promoter get paid.
In some co-marketing arrangements, two or more companies agree to promote for each other, without directly compensating each other. These reciprocal arrangements work best when there is parity among all participants. For example, companies with equivalent amounts of targeted website traffic may agree to swap banners.
Traditional advertising is costlier, riskier, harder to measure and less effective than co-marketing. In traditional advertising you pay whether your offer sells or not. Co-marketing lets you pay for performance, allowing you to self-finance promotions from your profits. It can allow for creative barter arrangements, which means no cash outlay. This means you can eliminate up-front costs and risks. Every sale you make from co-marketing is tracked. And since you’re able to leverage your promotional partner’s access and influence, you can multiply your sales conversion rates.
What are the downsides of co-marketing? When a business endorses and promotes another company’s product, it risks its own reputation. Should the product fail to live up to its hype, the promoter may alienate its own customers. It’s important for a promoter to conduct thorough due diligence on the merchant and the offer before endorsing it. Offers should include ironclad money-back guarantees and the merchant should devise a special customer service plan to keep the promoter’s buyers happy.
Merchants must be well established and have strong credit ratings or establish escrow to ensure timely payments to partners. Your promotional partners can not have any doubts about the merchant or the quality of the product.
Finding promotional partners can be difficult. The ideal promotional partner is well-established in your market but does not directly compete with you. Ideally they are positioned as relevant experts on your product category.
They should have a close, trusted relationship with their buyers. At best, partners who don’t have the market’s trust will be ineffective. At worst, your brand can be negatively impacted by the association.
A good candidate for a promotional partner will have an effective, low-cost way to communicate your offer. Promoters with large email lists of buyers can distribute your message to thousands and thousands of buyers for pennies. However, make sure your brand is not associated with a spam list. Some promoters may include your sales letter inside regular communications like newsletters, account statements, invoices, and product shipments. Retail partners can hand-out samples, distribute coupons or host signage. Call centers can transfer callers who express interest in the offer.
The best promoters are often companies that market a limited product line directly to their end-users. Companies with a small number of proprietary products can expand their catalog of back-end offers without the costs of development, inventory, fulfillment or client support. A well nurtured buyer’s list can continue to generate sales for years to come.
The best structured co-marketing agreements are highly profitable to all parties. My team and I create, source, negotiate and manage co-marketing strategies that help business owners grow distribution and revenue. If you’re interested in growing your business with the incredibly flexible and powerful strategy of co-marketing, please get in touch.
We prefer to work with companies with strong client relationships and those with exceptional product offers. Our merchant clients must have tested and proven marketing collateral that sells, in addition to an appealing product that is worthy of endorsement.