Buddy Up To Stretch Your Marketing Budget And Have Stronger Impact

Posted on January 15, 2011 by Bill Hansen

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When budgets are tight, some businesses stop marketing and advertising. In fact, according to American Express Open, about 40% of SMB owners reported eliminating their ad budgets in 2009 due to economic uncertainty. Yet we know that this approach costs businesses much more over the long run (if they ever live that long). Still, if you don’t have the money, what are you going to do?

Take a cue from several of the businesses featured after the jump – they found creative ways to ‘partner’ with larger, complimentary businesses to get their names out there and their brands burnished, with relatively little hard cash invested.

Why would a larger business carry you on their back when they’re footing the bill? Good question. It all comes down to two things: 1) They can make a big brand seem more local/personal (small firms often have unique ties to the community that are based on heritage, know-how, and local flavor), 2) The larger business can use the services of a smaller partner directly to differentiate itself and attract broader traffic.

The Big Idea:

• Find a larger business – ideally a steady advertiser in a crowded, competitive field - and approach them with a great idea about how your well-liked product or service can help them differentiate their brand image or provide an incentive for consumers to traffic their location. We’ve seen winning combos as diverse as bakeries/coffee shops setting up house in auto service centers, high-fi/electronics businesses kitting-out the waiting areas of local car washes, retailers working with the local ASPCA, grocers with local vintners and specialty food purveyors, banks and credit unions with a host of companies that benefit from easy financing. The possibilities are endless

• If you’re a larger business, look for cool local firms that have strong connections to their communities. Businesses that have strong social networks, loyal customers who make regular purchases, etc. Have these firms set up shop in your location and drive their customers to YOU. Recently, we worked with an auto dealer who gave discount certificates to one of the premiere local restaurant groups to anyone who took a weekend test drive and awarded several drivers complimentary all-inclusive meals.

• Promote it. These partnerships typically work best when both partners use their respective marketing – and the practices that each does best – to get the word out in a syncronized way.

• Use a matchmaker. It can often be difficult to identify the right partner and make the initial approach to the right person at the right time. Unless you’re highly networked and have some experience designing cooperative marketing efforts, use your local media experts to get things started. Our radio sales teams usually have a deep knowledge about potential partners and relationships with the decision-makers themselves. Moreover, they can help advise you on creative, out-of-the-box ways to promote your partnership for optimal impact/minimal cost.

Small Companies Ride Coattails of Larger Firms to Reduce Advertising Expenses

From the Wall Street Journal

Mountain News Corp., which tracks snow conditions for ski mountains through its website, got a burst of national exposure without spending a penny last winter when Apple Inc. chose to feature Mountain News’ mobile-phone app on an iPhone television commercial.

Before the commercial ran in February 2009, the Orinda, Calif., firm was pulling in 1.2 million unique visitors a month to its site, OnTheSnow.com. A year later, that number had jumped to 2.2 million, which the firm’s global managing director, Chad Dyer, attributes in part to the free advertising. “There was nothing we had to do, nothing to spend,” says Mr. Dyer.

Small companies generally keep tight tabs on advertising and marketing expenses, as the payoff may be uncertain. About 40% of business owners reported earlier this year that the economy was preventing them from spending on marketing and sales, according to a survey released by American Express OPEN, the company’s small business division.

Sharing the Spotlight

While most small businesses aren’t fortunate enough to be able to latch on to the campaign of a big company like Apple, some business owners have found ways to reduce marketing costs by sharing the spotlight with another company.

In May, Birds Barbershop in Austin, Texas, launched an advertising campaign with Lone Star Beer, which is owned by Pabst Brewing Co. The ads, which are running in local print and online publications, show a customer sporting a new hair-do and holding a beer. The ads list the price of the haircut and indicate that the beer is complimentary.

The barbershop has been serving a free beer to customers since 2006, says Michael Portman, who co-owns four locations. Lone Star had already been supplying the barbershops with cases at a discount price, and was game to split the cost of the ads.

The most expensive ad, prominently displayed in a bi-monthly Austin magazine, cost $900. Without a partner, Mr. Portman says he probably would have chosen a more modest ad. “I wouldn’t make that leap alone,” he says.

AssociaDirect Inc., which provides customized marketing tools to help organizations reach new members, is in the process of sending out more than 2,000 direct mailings to potential customers advertising a new marketing application for mobile phones. AssociaDirect’s chief executive, Michael Faye, says the firm is splitting the $3,700 cost of the mailings with mobile technology company ConnectMedia Ventures, which will help create the application.

AssociaDirect is the only firm being advertised on the fliers, even though the two firms will collaborate for each project—AssociaDirect will create the design and ConnectMedia will provide the tech support. AssociaDirect will pay ConnectMedia for its portion of the work.

‘Sales Arm to His Product’

“My partner understands that we are the sales arm to his product,” explains Mr. Faye, who says he has since landed six appointments with interested organizations. “I don’t have hundreds of thousands of dollars in my marketing budget.”

FirstBank Holding Co. ran seven billboards throughout Colorado in the latter half of 2009 showing off its entrepreneurial customers. The billboards listed the services each entrepreneur provided—math tutoring, wedding singing and dog walking, among others—and included contact numbers. The bank’s logo and a message about catering to small firms was at the bottom.

‘I Didn’t Lose Anything’

But even free publicity may have no end result. Math tutor Travis Macy, who is also a high school teacher, says he didn’t land any new customers despite getting a flurry of inquiries from the bank’s billboards. “None of them were a suitable client because of time constraints or subject matter or price,” Mr. Macy says. “But my investment was nothing…so I didn’t lose anything.”

Cost isn’t the only consideration in a collaborative ad campaign, says Paul Weber, president of Entrepreneur Advertising Group LLC., in Kansas City, Mo., which specializes in small-business marketing. One risk is whether the brands can coexist and, if there are multiple partners, whether the brands dilute each other. For example, a mail campaign that contains a stack of individual coupons isn’t as beneficial as a campaign that focuses on the businesses as a collective community.

“If you’re sharing the cost of a rotating billboard, [audiences] can separate the two,” he says. “But if you are putting them together and telling customers that if you like this, you’ll like that, make sure to do your due diligence.”