From airlines partnering with rental cars to soft drinks offering music, co-branded promos provide marketers numerous advantages.
You get a promotional mailing from United Airlines that contains a discount or upgrade coupon from Hertz. You see an advertisement for an interesting restaurant, and are surprised to see it’s not only co-branded by Visa, it explicitly makes the point that the restaurant does not take American Express.
What’s going on here? It’s “marketing synergies,” one of the best but least utilized ways to pump up the results of your promotional efforts.
In an effort to hold down costs and increase response, marketing experts increasingly are abandoning the swash-buckling, go-it-alone style of yester-year in favor of a more cooperative, collaborative strategy closely coordinated with another corporation.
For example:
Sprint and EchoStar have agreed that Sprint will market EchoStar's DISH Network satellite TV service. BellSouth, SBC and Verizon have inked parallel deals with DirecTV. Meanwhile, Qwest is experimenting in different regions with each of the two satellite TV vendors.
These companies have not yet made public many of the details regarding the inner workings of these offers, but at this point it’s clear that if you’re a customer of both DISH TV service and Sprint local phone service, you will get a single bill from Sprint.
A prototypical example is Pepsi’s co-promotion with Apple iTunes. During the promotion, 100 million codes good for a free song download from iTunes will be randomly distributed in bottles of Pepsi, Diet Pepsi and Sierra Mist. That translates to one out of every three units.
What drives such a partnership between disparate companies? Primarily the target demographics of the two firms; they are virtually identical: teens and 20s, cool and urban, trending male. Pepsi was motivated to explore the synergy with Apple iTunes because it was looking for a way to overcome Coke's continuing popularity. And iTunes was attracted to the opportunity to reach out to Pepsi drinkers because its product is perfect for a free trial: getting millions of people to visit the iTunes site the first time is pretty much a guarantee at least some of them will come back for more.
Similarly, Napster teamed with Miller Brewing on a two-month promo to give away thousands of free Samsung-Napster portable music players and $50 in Napster credits. Drinkers of Miller Brewing products can download some of Tom Petty's top-selling albums, including "Damn the Torpedoes," "Full Moon Fever" and "Into the Great Wide Open," as well as hit singles like "Don't Do Me Like That," "Free Fallin" and "Refugee." In fact, for a time some of Petty’s music was available exclusively on Napster before it was released to rival online music services.
Panda Express joined the same parade by giving customers at about 550 of the chain’s restaurants a free movie rental coupon good at Hollywood Video. The coupon is good for any movie, including new releases such as "Daddy Day Care" and "The Terminal," which just happen to contain Panda Express product placements. The same offer also included a discount coupon redeemable on a return visit to the restaurant chain. Hollywood Video supported the offer with in-store fliers plus a link to Panda Express on its Web site.
That such deals are setting a trend should not surprise anyone. Marketers have long known that their best prospects are those who are most similar to their existing customers, and that developing a relationship of trust is a major element in converting a prospect to a customer. Synergies in marketing help capitalize on both these factors to increase the results from every advertising dollar.
Marketers interested in finding their own synergies can start looking in the following places:
Among Your Vendors --People who already have business relationships with your firm are the easiest to approach for a joint marketing arrangement. The relationship may work for both of you because your products are similar, or because your customers are. Or both.
Among Your Customers -- People who already buy your products and services may be amenable to a joint marketing arrangement. If their company offers a similar product, or markets to a similar segment, you both may find that the synergies are compelling.
Among Companies in Related Industries -- Even without an existing relationship, the mere fact that there may be synergies when reaching out to your various target markets can form the basis for profitable cooperation. If you’re selling chips and someone else is selling dips, there are plenty of reasons to try and cash in on the obvious marketing synergies.
As for the benefits of a synergistic marketing relationship, these are only the most obvious:
Instant Trust -- Melding your marketing efforts with an established partner lets you leverage the trust they have painstakingly developed over the years with their customers, and thereby accelerate the process of gaining their trust for your own products and services.
Major Savings -- Most shared marketing efforts turn out to be far cheaper than solo efforts. Because you’re piggy-backing on the expenditures of your marketing partner, distribution can be cheaper, and the CPMs for media buys can be significantly diluted.
Expanded Opportunities -- Shared marketing efforts generally help you reach people you might not ordinarily contact, or reach them while they’re more receptive. Either way, you get important new opportunities to expand your customer base beyond your ordinary universe of prospects.
Tighter Targeting -- If you select an appropriate marketing partner, you’ll gain access to people who are, by and large, exceptionally ripe for your marketing message.
New Customers -- The net result of all these advantages is to add new names to your customer list far easier, cheaper and faster than you could through even the most aggressive solo marketing efforts.
For all these reasons, you’re almost certainly going to see more and more companies joining hands to reach out to prospects and customers in tandem. Is there some compelling reason you’re not going to be among them?
Robert Moskowitz is a consultant and author who speaks and writes frequently in the U.S. and abroad on such topics as white collar productivity, knowledge management, practical use of the Internet, telecommuting, caring for aging parents, and business applications of information technologies. He has authored several books, including "How To Organize Your Work and Your Life," and "Parenting Your Aging Parents," and teaches several online courses.