Partnering with regional competitors can put larger corporations on the defensive.
A growing number of small businesses have discovered the power of banding together to find new customers. Instead of relying on the same tired marketing and outreach programs, business marketing co-ops allow companies to pool their resources to save money on advertising, events, and promotions. At the same time, a marketing co-op can improve customer acquisition rates by acting as a source of regular referrals. Marketing experts suggest five steps to launching a successful co-op.
Instructions
Business Marketing Co-Ops: Step by Step
1. Choose to market by industry or by neighborhood. The idea of partnering with businesses that serve the same customers might sound counterintuitive. However, companies that form a regional network of trusted partnerships can have the same kind of impact as a chain of corporate stores. While this strategy might not work for similar stores across the street from each other, "vertical" co-ops of auto body shops, caterers, florists and other service businesses have flourished by extending membership across larger geographic areas.On the other hand, a group of different businesses that serve the same geographic area can form a tight knit group that emphasizes community. A bakery, an auto dealer and a small bank might not have the same target customers, but they can all benefit by creating community awareness and passing referrals to each other.
2. Set a budget and baseline expectations. To form a successful business marketing co-op, members should contribute a fixed amount of time and resources. Some co-ops form out of members' desires to help stage special events or to respond to business opportunities. However, the most successful marketing co-ops use marketing models to set expectations for a return on investment.
3. Choose a marketing coordinator. Successful business marketing co-ops designate a specific person to lead marketing campaigns on behalf of the entire membership. In some cases, a single member of the co-op can take on this task, even rotating the role among members evenly. In the most successful co-ops, members budget for a marketing coordinator position or for a marketing consultant to handle day to day tasks. A dedicated marketing coordinator can look at the co-op's plans from a neutral perspective, while allowing members to stay focused on their own businesses.
4. Execute your first campaign. First time members of marketing co-ops tend to meet frequently, without taking much direct action. Marketing experts advise co-op leaders to work quickly instead. Even small, experimental moves can build confidence among a co-op's membership. Campaigns that leverage the strength of "vertical" co-ops include TV and radio direct response ads that refer to a common phone number or website. Community based co-ops often find success through direct mail and event sponsorships.
5. Measure success and try again. Measuring success after each campaign can assure co-op members about the effectiveness of using their marketing resources to support the group. A lack of results can allow members to bow out gracefully, preventing embarrassment or resentment in the future. In many cases, however, members enjoy the benefits of growing their own businesses while deepening their connections to their communities.
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