E-commerce Link: Mutual Benefit, Revisited

Getting a cooperative marketing partnership started

September 2006 By Peter Figueredo

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In my June 2006 column, “Mutual Benefit,” I introduced the concept of online cooperative marketing partnerships. This is an arrangement between two non-competitive companies to actively promote each other’s products and services to their customer bases. These partnerships offer a great opportunity to grow your customer file and strengthen your brand for very little money out of pocket.

Now, let’s look at six steps to get a cooperative marketing partnership deal started.

Step #1: Compile the assets you have to barter with.
Every company communicates with its customers differently. Take a step back and look at your organization. What customer touchpoints can you leverage for these efforts? Some common examples of inventory frequently bartered are package and customer statement inserts as well as links and banner ads on e-mail newsletters, online shopping cart confirmation pages and online customer order status areas.

Step #2: Identify potential partners.
Competitors make bad cooperative marketing partners for obvious reasons. Other than that, the landscape for potential partners is wide open. There are many different ways to brainstorm on how to find potential partners based on your target audience. For example, you can consider your products and services, then make a list of complimentary companies. In my experience, it’s always beneficial to choose a company that offers products or services that complement your offerings. Similar customer profiles can help increase conversion rates from these efforts. However, if you are looking to diversify your customer base, you may want to select a company with a different customer profile. Examine the behavioral data of your target market and make a list of potential partners based on other brands or products your customers use. Don’t be afraid to use these deals as a testing ground for new markets.

Two such marketers playing on both the affinity and differences within their housefiles are MarketingSherpa Inc. and the publisher of this magazine you hold in your hand, Target Marketing Group. Their deal leverages e-mail co-registration to help one another boost customer acquisition and sales. Other marketers who have found value in cooperative marketing arrangements include The Financial Times, Audible.com and Puritan’s Pride.

Step #3: Develop a standard legal agreement for cooperative marketing ventures.
Often, these deals are done with only a handshake. However, your legal department or your potential partner may require a formal agreement between parties. To increase your chances of getting a deal off the ground, I recommend these agreements be kept brief. Ideally, this means each party signs a standard nondisclosure agreement. If that is not enough, you also may want to include:
* an indemnification for use of ad units and ad copy;
* verification that the advertiser has permission to contact its business partner’s customer base; and
* Can Spam and do-not-call list compliance requirements.

Deal terms also can be plugged into the contract, for further support of the business agreement.

Step #4: Locate the appropriate contact.
Now that you have your target list of potential partners, you will need to get your proposal in front of the most receptive person. Since we are talking about online partnerships, the appropriate contact usually will be in the marketing or business development departments. Stay away from ad sales people because they usually are not receptive to these nonpaid deals, since there is no commission for them. To find the appropriate contact, search the company’s Web site. The easiest way to do this is to use a business networking software such as LinkedIn.com. Once a deal is made, this contact often is the point person with whom you will regularly communicate to measure performance on both sides of the deal.

Step #5: Make the deal.
Present your idea in the most succinct format possible. Many of these deals are structured in a very loose format in which inventory is estimated rather than set in stone. Don’t be surprised if your potential partner has never considered what you are proposing, because many have not. While these types of deals are commonplace in the offline world, they are still relatively rare in the online arena.

While negotiating terms of the deal, you may find yourself placing arbitrary values on different types of customer exposure opportunities. For example, you may value package insert placements more than e-mails, while your partner may feel differently. Making the deal is where creativity really comes into play.

Start small by suggesting you mention each other in a customer communication. This can be part of a regular communication or a stand-alone e-mail. Placing an offer on the confirmation page also can be a good starting point, since most companies know they already have the order captured and, consequently, aren’t as concerned with losing a sale.

Step #6: Track program results.
Finally, make sure you each have a clear understanding of the other party’s success metrics. Then, request regular updates from your partner that allow you to monitor performance from your partner’s perspective as well as your own. If performance on either side is lagging, you may need to take steps to improve results—such as changing a creative ad unit, optimizing an offer or moving a link to another page—or you could lose the partner.

Flexibility is key to most cooperative marketing partnerships. These deals are new territory for most marketers, so you’ll likely hit a few bumps in the road. But, if proven successful, they can be a good ride.

Peter Figueredo is co-founder and CEO of NYC-based NETexponent, an online direct response agency. He can be reached by e-mail at peter@netexponent.com.

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