Tuesday, November 6, 2007

The Value of Co-Operation

One of the biggest challenges facing small businesses is that they often must compete with chains that can spread advertising expenses over dozens or hundred or thousands of stores. A $1000 ad that benefits 10 locations costs $100 per store. The same ad for just your one location costs $1000/store. This is why so many small businesses get frustrated with their advertising. It doesn't seem to be generating enough bang for its buck. That's because it isn't.

One solution to this dilema is co-op advertising. Instead of buying advertising for your single location or office, you team up with related businesses and advertise jointly. An example of this is our upcoming South Side Holiday Savings brochure. It's a 10,000 piece, glossy, full color brochure that will feature 16 area retailers. All will be the kind of place where you might actually do some Christmas shopping. Things like car care, restaraunts, professional services, will be covered in later editions. Distribution will be through newspaper inserts in 3 different small regional papers. The advertiser gets a 2" x 3" ad, great targeted coverage, in an attractive, substantial, festive looking, holiday themed brochure for 1.5 cents per piece.

You can also team up on things like calendars, memo boards and other "top of the mind" type promotional pieces. This not only gives you the advantage of volume buying, but it gives you several additional distribution channels, since each participant will be distributing their portion.

Another opportunity not to be overlooked is events that offer vendor booths. It might not make sense for you to pay the booth fee just to give out your own promotional material, but it would be very cost effective to go in with several of your network partners on a single booth. You could make the purchase as "The West Side Alliance" or whatever you want to call your group. For $10 a piece or so you could spend a few hours reaching hundreds or thousands of potential customers.

Yet another great co-op is a campaign involving prizes. People might not get excited about a $25 gift certificate, but they probably would take a look at a $500 shopping spree! (20 participants each put in a $25 certificate. Entry forms and boxes at each participant's location.) You could market the campaign jointly. Newspaper inserts can be had for around 5 cents each (not counting printing) and the cost, again, is split 20 ways. It might be easier to organize a smaller group, maybe 10. The cost is still minimal. When you consider the cost of goods sold plus a fixed amount each for promotion. The whole thing could be done in a targeted manner for less than $100 each including gift certificates, printing and distribution.

Don't try to mimic the chain stores. The single location operation is a different animal. Leverage your relationships to benefit yourself and your network associates.

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