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How
to Set Up Your Merchant Certificate Promotion
Ways
to Discover Potential Cross-Promotion Partners
Business-Card Drawing
Drive-By
The
Ten Steps for Setting Up a Cross-Promotion
Setting
Up a Cross-Promotion in Person
The Introduction
When the Manager Has to Get Permission from the Boss
Turndowns
Setting
Up a Cross-Promotion Appointment by Telephone
Getting Past Secretaries
Choosing
the Right Words to Sell Your Cross-Promotion
Words to Avoid When Setting Up Your Promotions
Words to Employ When Setting Up Your Promotions
Tracking
Your Results
New Product or Service Introductions
How to Determine if the Customer Is New
Chapter
Summary
How
to Get More Cooperation from Other Area Businesses
Value
Cards
The
12-in-1 Value Card
Setting
Up the Value Card
Back
to The Fish Bowl
Ensuring
Proper Distribution
Value-Card
Format
Getting
Off the Wagon
The
Two-Way Promotion
Reverse
Promotion
Coop
Promotion
In-the-Loop
Promotions
Chapter
Summary
Building Your Neighborhood
Sales with Merchant Networking
In nearly any neighborhood there are hundreds of opportunities to get either free or low-cost distribution of your promotional and advertising messages. These opportunities generally fall into ten different categories, which could be called the Ten Avenues of Free Distribution:
When the movie Batman Returns, the sequel to the original Batman movie, was released, Jayson Lynk, the manager of Big League Sports, a comic-book store in Warren, Ohio, saw an opportunity for a merchant-certificate type of cross-promotion. Lynk reasoned that, while not everyone who would go to the movie would be a comic-book buyer, nearly everybody who does buy comic books would go to see Batman Returns. Because of the major competition in his area for those comic-book customers, he wanted to do something very special.
He approached the manager of the biggest movie theater in the area. He first suggested trading some free movies passes for gift certificates at his store that could be used for employee incentives and customer door prizes. He then suggested that they display each other’s posters. Lastly, Lynk provided the movie-theater owner with a batch of special cross-promotion certificates good for $1 off the purchase of $10 or more of any Batman products in his store. Each person who bought a ticket to Batman Returns received one of these certificates; over 10,000 were distributed. (See Figure 2-1.)
Out of the 10,000 certificates distributed, 150 were redeemed. That’s just a 1.5 percent return, apparently not very good until you look at it from a return-on-investment standpoint. Those 150 people has to buy at least $1,500 worth of merchandise. Even better, about 50 of those people became Lynk’s regular customers. Comic-book readers often visit a comic-book store every week to keep current with their favorite titles. Lynk figures that his regular customers spend an average of $10 per visit. When you do the math, you discover that this one promotion generated over $26,000 for Lynk in the first year. But that’s not all! One of those new customers was a twelve-year-old boy who showed up in a chauffeur-driven limousine. Accompanied by his personal nanny, he spent no less than $300 a week. On his birthday that year he spent over $3,000. Can you imagine how much he’ll spend the year after his bar mitzvah? The bottom line on this promotion was a $30,000+ increase in sales the first year.
One year later most of those new customers were still spending their $10 per week in Lynk’s store. When Jurassic Park opened at the same theater, Lynk organized a similar promotion. David Rarick of Stand Up Comics in Circleville, Ohio, was thinking along the same lines when he teamed up with Circle Cinema, the only movie theatre in his town. After his wife, a graphic designer, worked up a draft of the certificate he wanted to distribute (see Figure 2-2), Rarick approached the manager of the Circle Cinema. The manager enthusiastically agreed to distribute the certificate in return for Rarick’s promise to put a sign near his Jurassic Park display reading "Now Playing at the circle Cinema."
Jason Lynk, David Rarick, and many other comic-book retailers as well as traditional booksellers across the nation are looking forward to the promotions opportunities that new Spiderman, Fantastic Four and X-Men movies will present.
Since many of these movies are so well merchandised, another major cross-promotion partner could be held with a toy store. Also, it’s likely that one of the major fast-food chains will pick up on some of them, so comic-book stores should look for neighborhood opportunities with them too.
A merchant promotion doesn’t always have to include a piece of printed advertising that is distributed to customers, though I believe that such advertising produces better results. Nonetheless, simply using another business to give your own business more exposure provides you with an opportunity to attract new customers at little or no cost to you.
An East Cost scuba-diving center with a customer base of affluent people who could afford to spend thousands of dollars on scuba equipment and trips to the Great Barrier Reef in Australia or the Red Sea in Israel did a cross-promotion with a restaurant that attracted many new customers. Their demographic target audience was made up of yuppies, DINKS (dual income, no kids) and OINKS (one income, no kids). One local business that appeared to cater to the same type of people was an upscale seafood restaurant. Also, since it was a seafood restaurant the theme of the promotion tied in very nicely with the scuba-diving center.
The diving center put a display in the restaurant lobby featuring scuba gear and continuous videos of exotic underwater dives. A poster indicated who was responsible for the display and brochures provided interested parties with information about the center’s services, including their diving courses. On busy weekends there was a captive audience in the restaurant lobby, people were glad to watch the diving videos while waiting for their tables. The display cost almost nothing. The restaurant loved it because it created something of interest in their lobby at no cost to them. Everyone won.
In this particular promotion, no special certificate was given to the restaurant’s customers. The promotion might have gotten a better response if each customer got a "Discover Scuba" invitation allowing him or her a free scuba-diving lesson. That one addition to the promotion might have provided the little extra incentive to prompt more of the restaurant’s customers to give scuba diving a try, and it would have allowed the diving center to track the number of customers that the restaurant promotion generated.
Basically, the whole idea
behind a cross-promotion is to get someone else, someone who has contact
with people whom you want as your customers, to distribute your advertising
for you, for free. To be most successful, you must choose a promotional
partner that already has a strong customer base consisting of that specialized
audience that has reason to be interested in what you have to offer. The
specialized groups comic-book buyers and people with large discretionary
recreational budgets have relatively few members in terms of the total
population, yet, by looking in logical places, you can attract the attention
of members of these specialized groups or any others you might want to
reach.
The Three C’s of Cross-Promotions
The elements that make cross promotions so successful are best represented by the Three C’s of Cross-Promotions:
There are two different benefits to the cost element of a cross-promotion: free distribution and low-cost production.
FREE DISTRIBUTION
The most expensive element of most
advertising is the cost of distributing the advertising message. Generally,
the cost of creating that message is only a fraction of what it costs to
put that message on TV or radio, in the paper, on a billboard, or in a
mailing. With a cross-promotion, you get your advertising message distributed
for free.
LOW-COST PRODUCTION
The production of a cross-promotion
doesn’t have to be expensive. Most applications use quick printing, with
black ink on colored 20-pound paper. This is very inexpensive. To have
impact with a mass mailing or an insert in the newspaper, however, you
have to do something to make your message stand out. So you pay for full-color
printing, scratch and sniff, lick and stick, and every other gimmick you
can think of. With a cross-promotion, on the other hand, because of the
unique environment in which it is distributed, you don’t need to go to
that expense. Of course, there are exceptions to this rule. A white-tablecloth
restaurant is one kind of business that should use a classier piece. In
this case, the piece might be printed on a higher quality paper, engraved,
and perhaps designed to look similar to a wedding invitation. A bank branch
might want to print with two colors on a textured or coated paper stock
to give its piece more class. Whatever the printing quality, you want your
artwork to be very professional. A professionally designed, typeset, and
pasted-up piece will still look professional even if printed in black ink
on basic colored paper.
Control is another feature of cross-promotional activity that provides you with great results, when it is done properly. By "control" I’m, referring to the ability to control the audience to whom your message is distributed.
There are five types of promotional control:
While you may want to focus your distribution in your neighborhood, you probably do not want to cross promote next door. If your business is well established, it’s likely that most of the customers of the business next door who could be your customers are already your customers. It doesn’t make sense to offer a discount to customers your already have who are paying your regular price. But, during a slow time of the year, or when you are introducing a new product or service, or if your volume is very low for any reason, you may have good reasons to promote next door.
You have to achieve a balance. The farther away you go from your store, the greater the chance you have to find new potential customers. But at the same time, the farther away you get from your store in your search for new customers, the more difficult it becomes to lure those customers to you, especially if your competitor is closer. So, by cross-promoting with a business that’s located five miles from you, your redemption level will likely be lower than a similar effort with a business located just a couple of miles away. Yet, of those people who do redeem, the percentage of new customers should be higher.
Suppose you have a competitor located three miles west from you. All things being equal, you’re more likely to get those customers coming from east of your store, while your competitor is more likely to attract those coming from west of his store. The customers you’re really competition for are the ones located west of you and east of him in the overlap area. To attract some of your competitor’s customers from this overlap area, you should select a promotional partner located just to the east of your competitor. That will win you many of your competitor’s customers, while cutting down on discounts to your regular customers.
Geographic control also means you can expand your promotion beyond the neighborhood. If you run a multiple-unit operation, you may be able to find other multiple-unit promotional partners who could help promote many stores in your organization. It’s possible to expand a promotion to a citywide, a regional, or even a national scope if it makes sense for the two promotional partners.
The neighborhood mapped in Figure 2-3 is similar to many neighborhoods. This neighborhood happens to be the one where our office and homes are located, in Gahanna, Ohio, a suburb of Columbus near the airport on the east side of town. The map shows a typical mix of chains, franchises, and independent businesses, as well as a typical assortment of schools, churches, shopping centers, government agencies, and so on.
A Streetfighter should have an intimate understanding of just about everything in his or her community. In the area just off the map to the north, there are some major new businesses including a Mejers Hyperstore and a Sears Hardware store, some new apartment complexes, and a United Dairy Farmers convenience store; moreover, a large shopping center will be built in that area in a year or so. To the northeast, again just off the map, is the corporate headquarters of The Limited, a Toyota dealership, Interstate 270, which circles Columbus.
This information is important if you owned a business located in the area the map covers. For example, the Baskin Robbins located near K-Mart in the Hunter’s Ridge Mall just a block north of our office attracts an entirely different group of customs than the Dairy Queen located on Highway 62 just east of Hamilton Road. You might think that the two ice cream stores would be strong competitors, but they really don’t compete very much. The Dairy Queen is a free-standing building with a drive-though window, right I the heart of Gahanna, while the Baskin Robins is located, in a shopping center, at the outskirts of town. The Dairy Queen pulls more customers from the north side of Gahanna, whereas the Baskin Robbins pulls a lot of its customers from the southern area of the community. The overlap area between the two is where the fiercest promotional battles could be fought.
If the diary Queen wanted to reach a greater number of potential new customers with a value offer of some kind, they would probably want to promote south of the Baskin Robbins. For example, they could approach the Gahanna Fitness Center to promote their nonfat frozen yogurt products
Gahanna is only one of a number of communities that make up the Greater Columbus ADI. In addition to Gahanna there is Reynoldsberg, Westerville, New Albany, Dublin, Hilliard, Whitehall, Bexley, Upper Arlington, Worthington, German Village, Delaware, Lancaster, Marysville, and many others.
Each of these communities is a distinct neighborhood, yet for multiple-unit operators, they are also connected. Cross-promotions and all forms of Streetfighter Marketing can be utilized at any level. Much of the time your promotional efforts will be focused on the neighborhood level. However, there are effective ways to transcend the neighborhood level, to market in two or three neighborhoods at once, to go citywide, regionwide, or even nationwide.
Such was the case with a cross-promotion created by Minit Lube, an oil-change franchise, and Skippers, a fast-food fish chain. It started out as a single cross-promotion between a Minit Lube and a Skippers located in the same neighborhood. The success of this single promotion attracted the attention of the Skippers headquarters in Seattle, and Skippers’ management got in touch with Minit Lube’s management and suggested duplicated the cross-promotion in all the areas where both companies had locations. Eventually, forty Skippers and twenty-eight Minit Lubes distributed each other’s certificates (see Figure 2-4), some seventy thousand pieces in all. (This is a variation of the cross-promotion called a "Two Way" discussed below.)
This is a good illustration of why not only individual store managers, but regional and district-level managers need to be familiar with all the facets of Streetfighter Marketing, Multiple-unit operations have dozens of opportunities each year to expand successful neighborhood-level promotions to the citywide, statewide, regional, or even national levels.
Special Geography. If you have a business that attracts customers only because of special circumstance, you need to look for special promotional partners. Such was the case of the McDonalds located at the airport outside Gahanna. People who worked at or who passed through the airport often visited this McDonald’s, but the restaurant needed a larger customer base. To draw customers from outside the airport McDonalds instituted a cross-promotion with the Uniglobe Travel Agency. The McDonald’s coupon (see Figure 2-5) was inserted in the ticket envelopes for all Uniglobe’s travel customers.
DEMOGRAPHIC CONTROL
A cross-promotion allows you to focus
your effort on a very narrow target audience. To do this, you first must
identify other potential cross-promotion partners in your area who reach
the same people you want. Jayson Lynk knew that Batman Returns was
likely to attract a large number of people who buy comic books. A bookstore
selling several Jurassic Park books (the novel itself, the nonfiction story
of how the movie was made, children’s versions of the story, coloring books,
and so on) plus other dinosaur titles would do well to cross-promote with
movie theaters showing that movie. A toy store could do the same (and it
might want to push some of its "Barney" items at the same time).
For businesses that have a broader appeal, a restaurant, for example, or a service station, you still can benefit form this demographic control. The example of the Dairy Queen and Gahanna Fitness Center’s cross-promotion of a low-fat product actually represents a combination of geographic and demographic control. If a sub shop does a lot of business with adults, but little business with teenagers, and wants to increase teen business, its owner should first determine what area businesses serve that group. The owner would do well to cross-promote with a music store, and arcade, and athletic shoe store, a movie theater, a comic-book store, or a clothing store that sells to teens. These cross-promotion partners would tend to reach the teenage target audience the sub-shop owner wants to tap into.
An automotive service business like a tire store, muffler store, or brake shop would want to go after a different target audience. It would be looking for adults eighteen and older or perhaps males aged eighteen to fifty-four. With this broad target spectrum you again begin by identifying those potential partners in your neighborhood that would reach those people. Some that immediately come to mind include a full-service car wash, a convenience store, a high-volume fast-food restaurant with a drive-through window, a bank branch, an auto paint shop like Maaco, a dry cleaners, a golf shop, and a sports bar. Of course, there are dozens and dozens of others.
An adult women’s clothing store like a Limited, Henry Bendels, or Petite Sophisticate can target many of their potential customers by cross-promoting with Jenny Craig Weight Loss Centers, women’s shoe stores (in the mall and outside of the mall), hair salons, cosmetic counters at department stores, and auto dealers that make an attempt to appeal to women (like Performance Toyota in my neighborhood).
Take the case of Doug Owens, a personal trainer. He was specifically looking for clients who could train during the middle of the day since his early morning, evenings, and Saturdays were totally booked. Hoping to attract housewives, he did a promotion with a hair salon. The salon only handed out a couple dozen pieces offering one half-hour training session for free (see Figure 2-6). He only had one taker, but she signed up for services that netted him about $750 per year. Based on Owens’s $20 investment, this was a pretty good return. To find more clients, Owens offered to provide a free lecture for a women’s charity organization. Everyone in attendance was given a coupon for "one free training session."
Vendor Distribution. Sometimes you can get your vendors to promote you, and because you are their customer your promotional piece doesn’t have to include an offer. Your vendors are motivated to help you because they want to keep your business. I did this when my last book, How to Get Clients, was released. My main target audience was small business, which meant I needed demographic control for my promotion; location wasn’t critical since the book was available through bookstores. So I had both full-sheet 8 ½ x 11 fliers and on-third-sheet fliers printed. Then I asked two of my key, high-volume vendors to hand out my fliers to their customers. My printer distributed my larger flier to every customer, while my travel agent inserted by one-third-sheet flier (see Figure 2-7) in each of the agency’s ticket envelopes for well over a month. This book promotion was merely an announcement, direction the customers to go to their bookstore to buy my book; no special offer was included.
NUMERICAL CONTROL
In this system you control the number
of pieces that go out. If you want to limit the number of pieces that get
distributed during a promotion, you can do so. Let’s say that you’re introducing
a new product of service, or perhaps it’s a particularly slow time of the
year for you. In these situations you may want to run a very high-value
or deep-discount offer. This offer may be so attractive that you would
like to limit the number of pieces that go out to advertise it. So, you
have your partner simply distribute the amount you want. If that cross-promotion
partner has, say, five thousand weekly customers, but you only want two
thousand pieces distributed, have that partner hand them out only over
the weekend or until the pieces are all gone.
This control also gives you the option of choosing those cross-promotion partners who will distribute enough volume of your advertising pieces to make some real impact.
If a certain business has fewer than a hundred weekly customers, it might not be worth it for you to arrange an official promotion. The numbers just aren’t there. Some of the most successful cross-promotions are done with partners with huge customer counts. A Wag’s in Port St. Lucie, Florida got the biggest return on a promotion other manager set up with a Wal-Mart down the street. Wal-Mart distributed ten thousand pieces at the cash registers in just one week. As a result the Wag’s customer count went way up and sales did too.
COMPETITIVE CONTROL
This means that your competition has
no idea what you’re doing. You can be sure your competitors are looking
for your ads in the newspapers and listening for them on the radio, but
they’ll probably never notice your flyers or cross-promotion certificates.
This "covert" feature allows you to gain a complete foothold in your neighborhood
before your rivals can do anything about it. (see Figure
2-8)
SYNERGISTIC CONTROL
Synergistic control usually falls
into two different categories: combination synergy or accumulation synergy.
Combination Synergy. Those cross-promotions that literally blow the doors off usually combine all of the other four controls. I think the main reason the Batman Returns/comic-book cross-promotion was so successful was its combination of "controls." First, a large volume, ten thousand pieces, was handed out during the run of the movie; this represents numerical control. Second, that movie attracted perhaps 100 percent of a narrowly defined group, the comic-book buying public (demographic control). Third, the two businesses were located only two miles apart (geographic control). And lastly, once the promotion was set up, non of the other comic-book retailers could do the same with that theater (competitive control). Lynk had preempted the competition from doing the same thing in his area.
The more narrow your target audience, the more often synergistic control comes into play. A family restaurant can target a very wide group of customers because everybody has to eat. Wal-Mart attracts a variety of customers; it’s not ver targeted from a cross-promotion standpoint. So when Wal-Mart hands out ten thousand pieces for a family restaurant, that’s bound to have an influence on the restaurant’s sales. IF that same Wal-Mart handed out pieces for a comic-book store or a dive center, the response would not be as strong because each of those businesses has a more narrow appeal. They may still gain some business from such a promotion, but they would be better off to find a more targeted cross-promotion partner.
If you have any one of these controls working for you, you’re likely to pick up a few customers for your effort. That’s good. But every once in a while there’s an opportunity to bow the doors off, and you must be ready to seize it. It usually doesn’t happen often, but when the circumstances are right, you have to be ready.
Accumulation Synergy. There’s
one other aspect of synergistic control, the cumulative effect of many
different promotions over time, as I mentioned in Chapter 1. You may only
have a "grand slam" promotion once or twice a year. Or you may find that
in your situation the grand-slam opportunity just doesn’t exist. But you
can still benefit form the cumulative effect associated with a couple of
dozen different promotions. It takes longer and involves more effort, but
this strategy will have a major impact on your sales.
Credibility, the third of the tree C’s, is another feature of a cross-promotion. There are two types of credibility: price credibility and testimonial credibility.
PRICE CREDIBILITY
This feature has become even more
important over the years. As competition increases dramatically, consumers
are barraged with all kinds of off-price marketing. Coupons, sales, discount
clubs, give-aways, and special financing are some ways of attracting customers.
These devices condition customers to wait for a deal before they buy.
When a business puts a coupon in the paper every week, its customers come to expect that coupon. If the coupon doesn’t appear one week, the customer will wait for the coupon. Many customers will not shop until the coupon appears. There’s no doubt in their minds that you paid for advertising space in the past to discount your own product or service and that you will do so again. And if you don’t, many of those customers will stop visiting you.
With a cross-promotion you can give someone else the credit for the deal you are offering. When the comic-book enthusiasts received that special certificate from the movie theater, the piece said that it was "compliments of National Theatre Corp." It was perceived as a gift from the theater and the movie theater got full credit for the discount. That means that once the customers got their comic-book discounts on their first visit, they were not as likely to expect another discount on their next visit. The owner o f the comic –book store protects his price credibility by transferring the responsibility to the movie theater, his cross-promotion partner.
One of the major pizza chains started a delivery service in Columbus, Ohio. To order, you simply dial one number an then the pizza is dispatched from whichever of their twenty locations is located closest to you. The system is a boon to the customer, who doesn’t have to look at their full-page ad in the Yellow Pages and try to figure out which location is closest. It was during one of these calls that this chain totally destroyed its price credibility with me.
I called up and the first thing the order clerk asked for was my phone number. So I gave it to her. Then I heard some clicking sounds from a computer keyboard. She said, "Oh, Mr. Slutsky. How are you today?," as if she were a flight attendant. Then she continued: "Let’s see, the last time you ordered a small, mushroom, onion, and extra cheese. You paid the driver in cash. Would you like to place that same order again today?" I was a little overwhelmed by all the information she had on me, so I asked her if she’d like to do my tax returns this year. No response.
I placed my order, and then she asked me if I had any coupons. Now I was upset. She’d just informed me that everybody else in the world was paying less money for their pizza than I was. I then responded, "Do you take other people’s coupons?" She told me, proudly, that they would take anyone’s coupons! I said, "Great! I have a Jiffy Lube coupon!"
She took it. The deliverer cam to my door with a small mushroom, onion, and extra cheese. I handed him my coupon for $3 off an oil change and he took $3 off my bill. I will never pay full price at that pizza place again because they convinced me that their regular price means nothing. They’ve lost all their "price credibility."
TETSIMONIAL CREDIBILITY
When a customer receives a special
value certificate as part of a purchase, there is perceived value in the
piece. It says to that customer, in effect, that "you are a valued customer
and I’m doing something special for you. Here’s a savings or a value-added
for you the next time you visit this other business."
Sometimes you might be able to work out a cross-promotion on a larger scale with a major company. Greg Deerskin of Beach City Scuba in Dana Point, California, created a promotion with American Express Travel that took him almost a year to set up but has been giving him great results. When a customer bought a Club Med vacation from American Express Travel, they gave the customer a certificate good for free scuba lessons at Beach City Scuba. Their lessons included classroom training and confined water training. After finishing these lessons, the customer only needed open water training to receive PADI certification, and this they could do at Club Med with a few lessons. American Express Travel paid Deskin for each student he enrolled. He doubled the number of his students with this unique cross-promotion.
It took Deskin about a year
to put this promotion together. He first approached Club Med with his idea,
but they turned him down. He then tried a number of travel agents, who
also turned him down. Then American Express Travel saw the value in his
program and jumped on it right away. Unlike most cross-promotions, however,
this one is an ongoing promotion.
Cross-promotions are effective when done properly because they provide you free distribution of your message, allow you to target your promotion where it does you the most good, and keep you from getting a "discount" image.
The retail merchant certificate is a type of cross-promotion that helps you reach new customers by getting other merchants in your neighborhood to hand our your promotional pieces to their customers.
These promotions are most
effective when your pieces are distributed by merchants whose geographic
location is within a three to five-mile radius of your store, their customer
demographics are compatible with yours, and their customer counts are significant.
How to Set Up
Your Merchant Certificate Promotion
Before you can set up your initial merchant certificate cross-promotion you first have to know which merchants to approach with your promotion. The most effective and efficient way to do this is to start with those merchants who are already your customers. Starting with your own cutomers provides three advantages:
Ways to Discover
Potential Cross-Promotion Partners
A business-card drawing is
the easiest and least expensive way to find out which of your customers
could be powerful cross-promotion partners. You simply put a fishbowl on
the front counter and ask your business customers to deposit their business
cards for a free-prize drawing. The free prize doesn’t have to be expensive,
merely nice enough to prompt people to participate in the contest. You
can offer some service or product you sell. After four weeks you draw your
winner and award the prize. But the real prize is yours: the names, titles,
business addresses, and phone numbers of your customers. You’ll want to
save all these cards because you’ll use them for a little bit of Streetfigher
research using a technique called a "scattergram, " where the addresses
are plotted on a map to show you where you have your customer concentrated.
There are many major opportunities where the store owner or manager is not your customer . . . yet. To get an idea of what’s out there, take a drive through your neighborhood. You may discover a small factory with three hundred employees tucked away off the beaten path, but not far from your location. You might try driving a different way to and from work every day for a week or two. Get to know your turf.
When doing your drive-by you’ll want to have paper and pen handy to write down the names of all the opportunities in your area. The process will be easier and safer if you use a hand-held recorder; then when you get back to your store, you can write down the information.
Once you’ve completed your business-card drawing and/or your drive-by, you need to select a number of merchants who you feel would make a good cross-promotion partner. Out of that group separate the retail merchants from the rest. From the group of retail merchants select ten you already know by sight or by name and who are likely to visit your business in the very near future. Ten is an easy number of stores to keep track of, though you could choose any number you wish. You’ll eventually use many more then these ten, but ten makes a good starting point. Keep in mind that if you want your cross-promotion to be successful, the merchants you select for your list should provide you with the following four controls:
The Ten Steps for
Setting Up a Cross-Promotion
Step #1: Greet the merchant. For the first ten cross-promotions you do, you’ll already know the person in charge. Keep your greeting low key. You don’t want to come off like a high-pressure salesperson.
Step #2: Show a real sample. It is extremely important to use actual samples of the pieces you want to distribute rather than machine copies or a rough draft you’ve scratched on a yellow legal pad. The finished piece seems to lend a step of approval to the promotion since the piece demonstrates that you and someone else have already done a promotion. With your first promotion, you won’t have a finished sample, so be sure to print extra copies of this first promotion so you can make your future efforts easier.
Step #3: Present the "You" benefits. Position your piece as a nice "surprise" for the merchant’s customers when they’ve paid their bill. It will give him or her an opportunity to show appreciation for the customer’s business. (You’ll learn more about this step later in this chapter.)
Step #4: Agree on a date of distribution. Plan on distribution for one week, two at the most. After two weeks, cross-promotion partners often loose interest in the program. Once you know when the distribution will begin and end you can figure out the expiration date for your offer. Be sure to factor the expiration date from the last day of distribution. Typical expiration dates are thirty days.
With your first promotions, give yourself plenty of time to set up your printed pieces. After the first one you can use the same format and most of the type for future ones, but the first one will take longer. Give yourself at least tow to three weeks to get the pieces ready for distribution.
Step #5: Get the weekly customer count. You need to know how many special certificates to print. Ask questions to get an accurate number because many merchants have a tendency to inflate their customer counts. If your distribution period is for two weeks, be sure to double the weekly customer count when you visit your printer.
Step #6: Get a copy of your partner’s logo. It’s best to get a black impression on a white background if possible. If you’re printing your pieces two-up, get two copies of the logo. This saves time and money in the setup. Also, if the merchant wants his or her signature to appear on the piece, collect several copies of his or her signature made with a black felt tip or ballpoint pen (don’t use blue; it won’t reproduce properly when printed), in different sizes.
Step #7: Offer a free gift or gift certificate. Give the merchant a small toke of appreciation, a gift or gift certificate worth $5. This is not a bribe but rather a way of cementing the relationship.
Step #8: Ask for the number of employees. Explain that you realize bag-stuffing or distributing certificates is a little extra effort for the employees, so you want to provide value cards for all the employees. (Value cards are explained later in this chapter.) Be sure to give the employees a value card that is worth more than your certificate offer. The value card is an important step. It’s often the "glue" that holds the promotion together and ensures that you get thorough distribution.
Step #9: Go to your printer. Be sure to print extra copies because you will need them when setting up future cross-promotions. (Also, send a copy of them to us at Streetfighter Marketing, 467 Waterbury Court, Gahanna, OH 43230. Fax (614) 337-2233. We would be happy to do a brief, FREE, analysis for you!)
You can make these promotional pieces any size you wish, but keep in mind that the most efficient way to print at your quick printer is by using black ink on 20-pund, 8 ½" x 11" colored paper stock. A finished piece that is 5 ½" x 81/2" can be printed "two-up." If you need ten thousand certificates, for example, you print five thousand sheets of paper with two pieces printed side by side on the same page. The printer than cuts the pages in half and your print run is reduced greatly. Three to a sheet (three-up) and four to a sheet (four-up) are also common sizes.
Generally, the larger size (5 ½ x 8 ½) is more likely to attract the customer’s attention when added to his or her bag. Three-up is a great size for an envelope stuffer. You will also want to use different paper colors from one promotion to the net. Different colors for different promotions make it easier for your employees to keep them separate for tracking purposes.
Be sure you include the proper disclaimers in all of your certificates to avoid miscommunication to and problems with your customers. This sample disclaimer makes a good model:
This special Thank-You Certificate is good for (amount of value) savings on the regular price of (the item). Cannot be combined with any other special offer. Only on special "Thank-You" per visit per purchase. Cash value 1/20th of one cent. Good only at (location). Offer expires on (date).
Step #10: Keep everyone informed. Display samples of the pieces so that your employees know what to look for. It’s sad when a new customer visits your business for the first time because of a cross promotion piece and then leaves dissatisfied because your employee was ignorant of the promotion. There’s no point in attracting new customers if you’re just going to send them away angry.
Also, if your business has
other stores, tell the employees in those stores about your promotion.
Warn them that customers might be coming in to redeem the certificates.
If there are other franchised outlets like the one you own in your area,
you may want to give them a courtesy phone cal to tell them about your
promotion. They may choose to honor your offer, and then will call you
in the future when they do a similar program.
Setting Up a Cross-Promotion
in Person
This section offers a kind of script that you could follow when setting up a cross-promotion. The script is only intended as a guide: you should follow the basic outline but make your points in your own words so that the conversation is relaxed and very low-key. Keep in mind that this entire process, once you meet with the decision maker, should only take two or three minutes. This version is for a business owner or manager who is on your "hit list" who comes to your business as a customer.
YOU: "Hi, Mr. Jones, it’s good to see you again. I wonder if I could pick your brain for a minute? I’ve got this idea here that I thought was pretty interesting and I hoped you might like to see it. (Hand him or her your cross-promotion sample.) Here’s how it works. I would like to offer you the opportunity of providing your customers with a way they can get more for their money . . . kind of a special way you can say ‘Thank yu!’ for shopping at your store. What do you think?" (At this point, you wait for his question about the cost, which will come up about 99 percent of the time.)
MR. JONES: "Well, it sounds pretty good, buy how much does it cost?"
YOU: "Well, let me ask you a question. If it were free, would you do it?"
MR JONES: "Free? Well, yeah, sure, why not?" (the Mr. Joneses of the world usually respond with an answer like this.)
YOU: "Fair enough."
At this point, yoou have approval, buy you’re not finished yet. You need to take care of some details. Get the weekly customer count (if it’s the type of business whose regular customers come in weekly)>
YOU: "How many customers do you run through your store in a week?"
MR. JONES: "Oh, about ten thousand."
YOU: "Great. By the way, have your tired our new hot apple brown Betty yet? It’s one of my favorite."
MR. JONES: "No, I haven’t."
YOU: "Well, I’ll tell you what. Let me bring you one with my compliments. I’m really excited about working with you on this program. Would you like to try a free one today or could I give you a card for a free one on your next visit with us? Oh, by the way, I need a good copy of your logo, preferably black on white, if you have it. We could even take it right off of your business card."
MR. JONES: "No problem."
YOU: "Perfect Oh, how woul you like your ame to appear on the special ‘Thank You’ Certificate?"
MR. JONES: "Ah, that’s John Johnes, Owner."
YOU: "(Set up the time.) "Let’s see. Today is the 10th, so how about if I get your ten thousand special ‘Thank-You’s’ to you by the 25th and you hand on to each of your customers from the 26th through the 31st?"
MR JONES: "No problem."
YOU: "By the way, how many employees do you have?"
MR. JONES: "There are twenty-seven in all."
YOU: "Well, I realize that it’s a little more effort for them to personally bag stuff these special certificates for each of your customers. Obviously we just can’t have a stack of these sitting on the counter. So, when I return with your ten thousand special ‘Thank-You’s’ I’ll also bring twenty-seven "Two-for-One Desert Certificates for your employees."
MR JONES: "Great! Thanks!"
YOU: "Hey, it was really
nice talking to you, and I’ll see you on the 25th."
Sometimes you might be dealing with a manager who can make a decision about things that are free, but who still wants to get permission from his or her boss. When this happens, your chances of getting permission to run this promotion lessen greatly because now you have to rely on someone else to explain the idea on your behalf, and--of course—he or she will never do it as well as you can. But there is a way to bring them around a reluctant manager without having to wait for permission from the boss.
After a manager has asked you "How much does it cost?" and you have answered, "If it were free, would you do it?" the manager might say something like, "Sure, but I have to talk to my boss first." At that point, you need to ask two questions.
YOU: "I can certainly understand that you want your boss to be aware of this great opportunity. Let me ask you this, other than getting permission from your boss, is there any other reason why you wouldn’t be able to give me the ‘go-ahead’ right now? (Usually there isn’t.) "Well, is there any reason why you think your boss wouldn’t want to do it?"
MR. JONES: "No, but I really need to get his permission before I can do anything like this."
YOU: "Oh, I totally agree. Let me suggest this. Why don’t we get the ball rolling now, and, in the meantime, you get hold of your boss. If there’s any problem at all, just give me a call. Fair enough?"
This technique will help in about half of these types of situations. Once the manager has made the commitment, usually he or she decides it’s not even necessary to seek permission. And if he or she still does go to the boss for permission, at least he or she will make a good effort to sell the promotion for you since a commitment has been made to you. Once you get agreement, continue on as you would normally do by finding ou the customer count.
If you don’t get agreement,
setup a time by which the manager will have a decision, then follow up.
You might want to get a copy of the logo at this time, so you can follow
up by phone. If you eventually get approval, this will save you another
trip to the store.
Try to get the most out of each effort. Just as there are way of dealing with those manager who won’t make a commitment until they talk it over with their boss, there is also a way to begin to turn around a turndown.
If a potential cross-promotion partner decides not to use our cross-promotion, thank him or her, and then hand that person a low-discount coupon for your business. Tell him or her that if he or she is ever in the market for your product or service, you would like to be considered.
Though you may not have reached
a few hundred or a few thousand potential customers, at least you might
secure one. Then, when that manager comes into your store, you will have
one more chance to convert him or her into a cross-promotion partner.
Setting Up a Cross-Promotion
Appointment by Telephone
To get things moving a little faster, you don’t have to wait for your ten merchants to show up. You can give them a call on the phone and invite them to your business. After all, they did participate in your free drawing. You can tell each one that he or she won second prize. Your phone conversation would go something like this:
YOU: " (to the secretary.) "John Smith, please, (Smith picks up his phone.) John, this is Jeff Slutsky. I’m the manager of Jeff’s Store down the block from you. Remember me?"
MR. SMITH: "Sure do."
Let’s say you’ve tried to call the personnel director of a major company a number of times to set up a value-card promotion, and each time the secretary tells you that the person you want is tied up and takes your message. After three attempts, use the following tactic:
YOU: "Great. Mr. Smith, I just pulled your business card out of our fishbowl and you’ve won a free (item). By the way, I came across an idea that helps provide customers more value for their money and I was wondering if I could get a little input on it when you come in to pick up your free (item)."
MR. SMITH: "I guess that I could come in today or tomorrow."
YOU: "Super. Well let me suggest this. Why don’t we set up a time when you can come in to get your (item) then we could get together for a couple of minutes for your feedback. Okay?"
MR. SMITH: "Sure."
YOU: "Great. What’s a good time for you in the next few days?"
MR. SMITH: "Tomorrow, 1:00?"
YOU: "No problem. See you then."
YOU: "Please tell Mr. Smith that his name was selected in our free drawing and that he won a free (item) at Jeff’s Store. I need him to call me personally to verify and then we can set up a special time for him to pick it up."
FILTER: "Well, can’t I do that for him?"
YOU: "I wish you could, but the contest rules are very specific and we must follow them or we could get into trouble. I’m sure you can understand that."
FILTER: "Sure."
YOU: "Well, see that he gets the message and make sure that he calls me within two days or we’ll have to draw another name. Okay?"
FILTER: "I sure will."
YOU: "Thanks . . . Bye."
Sometimes when using the phone you have to deal with a secretary or assistant first before getting to the owner or manager. I call these people "filters." They are dangerous because they can’t say "Yes," but they can say "No." Usually they’ll tell you, after you explain your cross-promotion idea, that their boss wouldn’t be interested.
A good rule of thumb is to not explain the program to anyone but the decision maker . . . and never to explain it to anyone on the phone. To bypass a filter, you could use the free-drawing-winner approach.
When he calls back, you inform
him that his business card was selected out of the fishbowl drawing and
set up you an appointment just as you did on the phone-call approach previously
suggested.
Choosing the Right
Words to Sell Your Cross-Promotion
You might have noticed that I avoided using certain words that are usually associated with these types of promotions. I have found that I got a better response from a potential cross-promotion partner if I didn’t use them. The words to avoid are:
Coupon: Coupons are too widely used. They’re found in newspapers and they’re nothing special.
Discount: Discounts will get a consumer’s attention buy when you mention them to a merchant they often get nervous. They may start to fear that their profit margins will get squeezed.
Advertising: Advertising
is a necessary evil for most merchants. They don’t like spending money
on it. They don’t understand it and they don’t like the people who sell
it. For the same reason, avoid using the words promotion and marketing.
The words that have a positive effect on potential partners include:
Certificate: Certificate excites a special feeling. It’s often associated with the phrase "gift certificate" which is a very positive and valued thing.
Savings: Instead of saying a "$2 Discount," say a "$2 Savings." "Save" is a very strong word. Another positive word to use instead of discount is value.
Benefit: "Benefit"
is a much stronger word than "advertising," "marketing, " or "promotion."
When talking to a potential partner you can refer to your promotion as
a customer benefit program.
The last step in any promotion is to track the results. You need to know which ones work and which ones don’t work. Since you’re getting an actual printed piece back, the tracking should be very easy. Buy you also want to know more than those pieces of paper will tell you. The most important information you want to know from that customer is whether that customer is new or a repeat customer.
If five hundred certificates are redeemed for an offer of $2 off the regular price of $10, you’ve just generated $4,000 in sales, and discounted $1,000. Was this promotion successful? It depends on how many of the five hundred customers were new customers. If each customer using that certificate was already your customer and would have been likely to make the purchase at the $10 price without the certificate, that promotion was a failure because it cost you $1,000 out of your pocket.
But if out of those five hundred redemptions, you got one hundred new customers you generated $800 of new sales that you would not have gotten. At the same time you discounted four hundred regular customers at total of $800. Most business people would agree that this promotion was a success even though the actual promotion generated no increased dollars. Since you’ve attracted one hundred new customers from the promotion, you now have an opportunity of getting them back as regular customers.
Even if on 25 percent become regular customers, you’ll find that the promotion was a tremendous success. Those twenty-five people may come back an average of once a week and spend $10 each time. That would be an additional $13,000 in sales over the next year. Moreover, if only ten of those new customers told a friend about your great service, good quality, and fair pricing, and each of those friends came to your store, you could generate another $5,200 in referral sales over the next year.
Using this kind of analysis,
a promotion could be considered a long-term success when it provides you
with at least several new customers. Remember, it’s OK to discount regular
customers during these promotions, buy your primary goal is to generate
new customers. To gage success, balance the new customers generated against
the cost of discounts given to your regular customers.
The same concept would true
if you’re using your cross-promotion to introduce a new product or service.
In this circumstance, discounting your regular customers is not an issue
since your goal is to get them to try something new. However, to gage success,
the new product or service, when discounted to regular customers, should
be something that is an add-on item that increases the total purchase.
If it merely causes your customer to switch from one item t another (assuming
both items are equally profitable), there is no gain.
Simply ask. When a customer redeems the certificate, and if you don’t know from sight if that customer is a regular, simply ask nicely, "First time in our store?" Then place a "N" for new or an "R" for regular on the certificate. It’s important to get your employees to do this final step because it provides you with very important information.
If a given cross-promotion is very successful, you may want to do it again. Generally two to three times a year is the most you should cross-promote with any one partner. If you do it too often, you begin to give your partner’s customers too many repetitive certificates and the promotion will begin to loose its credibility.
If a given promotion results in a poor redemption rate, you will want to try to figure out the reason. Some questions you will want to ask include:
That’s not to say you should never cross-promote with a business right next door. In Indianapolis a subway a few doors down from a TCBY Yogurt in the same shopping center carried out a very successful cross-promotion. Both businesses were new. They each handed certificates for the other (see Figure 3-1) and generated lots of new customers.
If the problem is one that
cannot be corrected, avoid working with that partner in the future. Discovering
which partners are good for you and which are not is a very important part
of the overall success of your Streetfighter Marketing program. It’s likely
that out of forty promotions your first year, ten or fifteen will be unsuccessful.
That’s part of the learning curve. Most of those will be in the first three
to size months. Yet you’ll find that the number of your unsuccessful promotions
drops dramatically as you continue with your program.
Always stress the benefits of these promotions from the promotional partner’s point of view. Set it up as an "added value" and a way for the partner to personally thank his or her customers.
Print your promotional pieces at your local quick printer using black ink and colored 20-pund paper. Print your pieces two, three, or four to sheet of paper to keep printing costs to a minimum. If you own a business that targets the affluent, you may want to use higher quality piece with multiple colors, raised print, and textured paper.
Be sure to track the results of each promotion you do. You especially want to know how many of your redemption certificates brought in new customers as opposed to regular customers who might have paid full price.
Analyze each promotion you
do, especially the unsuccessful ones, so you can learn from each one and
get increased results from the next promotions. You want constant improvement.
How to Get More
Cooperation from Other Area Businesses
Up to this point we have only explored retail merchant certificates as the first of the ten ways to get free distribution of your promotional messages. In this chapter you’ll read about how some variations of cross-promotions help you get distribution through four more channels:
A value card is a cross-promotion variation, one different from the merchant certificate in that the offer provided to the recipient can be used repeatedly. A one-time offer should usually be preferred to a repetitive offer because once you’ve motivated new customers to visit with you, you want them to come back to your store because of the service and quality product you offer, not because of the discount. However, major employers, organizations, and educational institutions rarely cooperate with that type of promotion. Other term for value-card promotions include VIP cards and discount cards. As I mentioned in Chapter , you may get a better response from potential partners by avoiding use of the word "discount."
These programs are most effective when you set an expiration date for the value card. Ideally a limit of thirty days would be great, but there are instances, where , in order to gain the acceptance of the promotional partner, you have to give them sixty to ninety days of value. In one instance, where the partner was a teacher’s union f r the state of Indiana, the term required was the entire school year (see Figure 4-1). The same might apply with a bowling or softball league. Remember: the main goal of these promotions is to introduce new customers to your business. By providing those customers a value for a lengthy time, you run the risk of having them visit you only so long as they get that special offer. In this one respect, the value card has a slight disadvantage over the merchant promotion. Instead of being a one-time offer, the value card is used repeatedly until the expiration of the card. So you want to make sure that you think through your offer very carefully. Since a customer can use it repeatedly, the offer should usually be less than what you offer on a one-time merchant certificate.
But this downside is minor compared to a major potential benefit: big employers and schools can provide you with many customers. In Delaware, Ohio, a McDonald’s did some heavy-duty Streetfighting. There were fifteen major employers in that small community. Within three months the McDonald’s set up a value-card promotion with fourteen of those fifteen major employers, and also established a number of other community promotions (see Figure 4-2).
In Seattle there was a Minit-Lube located just a mile down the road from a John Deere distribution center. The new personnel director at John Deere was waiting for his car. He was approached by the Minit-Lube manager, who offered him a cross-promotion. The entire promotion was set up in a few minutes. In this instance the personnel director had the authority to approve value-cards distribution to all the employees, but didn’t have the authority to grant use of the company logo. No problem: the Minit Lube manager just typeset the name. It wasn’t worth the effort to get permission for the logo (see Figure 4-3).
Sometimes you may run into a less-than-cooperative personnel director. Then you must look for alternative ways to infiltrate the same group. The 20th-Century Automotive company wanted to get its discount cards out to all the employees of a nearby factory. The executives at the plant wouldn’t bite. So 20th-Century then approached the head of the local United Auto Workers (UAW). He saw this opportunity as an extra benefit that they could provide this to union members at no cost to them. A total of ten thousand value cards were mailed by the UAW to their area members. That one promotion doubled 20th-Century’s business (see Figure 4-4).
If you get turned down by the management of an entire company, go back and try to get a foot in the door by winning approval from a department. Such was the case in Seattle when the local Minit Lube was turned down by the local office of the Federal Aviation Association (FAA) which had one thousand employees. But one of the employees at Minit Lube had a father who was a department head at the FAA, overseeing about one hundred employees. So Minit Lube managed to go though this department head to set up the promotion for his employees. Soon other employees at the FAA started asking personnel how they could get the value cards. Not long thereafter the Minit Lube District Office received a call asking what the FAA could do to get value cards for the rest of its employees.
At this point Minit Lube was in the driver’s seat, so the district manager asked, "How much of a budget have you set aside for these types of employee benefit programs?" They settled for the price of the printing.
There have even been situations in which the business was able to sell its value cards to a major employer. That takes a very good salesperson and signifies truly advanced Streetfighting. I do not recommend this strategy because you don’t want to loose sight of our main goal: get free distribution for your advertising message.
Tim Petre, a Pizza Hut unit manager in Cincinnati, was approached by a person from the fidelity Investments office nearby to make arrangements to order pizzas for meetings and have them billed to a different address. After making the special billing arrangement and getting several small orders, Petre approached Fidelity about providing their 250 employees with value cards. The Fidelity representative was enthusiastic about the value cards and the very next day called up and ordered forty large pizzas. Moral: the effort of getting into a community by itself generates business.
Petre conducted a total of
four promotions, including this one, over a one-month period. His total
sales increased every week and for the month showed an increase for nearly
20 percent.
One variation of the value card is the "12-in-1" which has a more narrow use, yet can really be effective. This promotion is usually reserved for organizations or businesses who serve businesses. This business-to-business approach gives you a very special advantage in that you get twelve times the normal distribution of the standard value card.
Instead of receiving a single value card, each business owner of manager gets and 8 ½ x 11 sheet of twelve cards, printed on heavier colored stock. Suppose the local Chamber of Commerce has one thousand members. If the Chamber of Commerce mailed out one sheet to each of its members, the value-card promotion would yield one thousand cards distributed. But with the "12-in-1" approach, each member would receive a sheet of twelve cards. They then would write or type the name of their own business on each of the twelve cards, cut them up, and hand them out, keeping one for personal use. You could even add a note on the "12-in-1" sheet inviting businesses to contract the Chamber of Commerce if they want more cards. Under the system, one thousand sheets would ultimately lead to distribution of twelve thousand cards (see Figure 4-5).
The message to the Chamber of Commerce member should say something like, "Here’s an employee benefit program that won’t cost you a cent." If you can get the head of your Chamber of Commerce to endorse your "12-in-1" sheet, you will give the promotion increased integrity and also transfer responsibility for the discount.
Your local Chamber of Commerce is an ideal place to start. Be aware, however, that if you can get the Chamber of Commerce to go along with your promotion, it will be the first and last time it will do it. The reason? As soon as your sheets get distributed, all the other members will want to do the same thing. So the Chamber of Commerce will invariably create a policy not to ever do it again. Thus, not only do you get the promotion by being first, buy you also preempt any of your competitors from ever doing anything like it. The smaller the local Chamber of Commerce, the easier it is to set up a "12-in-1" promotion.
But Chambers of Commerce
aren’t the only point of distribution. You could use a similar system with
any business that serves other businesses. Printer, office machines companies,
office supply companies, office furniture companies, telecommunication
companies, paging and message services companies, business insurance companies
and so on, are all excellent targets. Any company that sells to you must
sell to other businesses, and therefore could serve as a conduit for masses
of free advertising.
Refer to your business-card drawing to discover if you have any owners, managers, CEOs, CFOs, COOs, presidents, vice-presidents, human resources managers, or personnel directors who are already your customers. Examine your drive-by notes to identify the key operations in your community that you might want to work with, and then compare the notes to the business cards to see which match up.
Once you’ve selected your "hit-list" of people you want to talk to, set up your value cards in much the same way as you set up your retail merchant certificates, but make several minor changes:
One challenge to setting up these types of "benefit" programs is that a personnel director might say that he’ll be happy to participate in your program but he refuses to pass out your cards. Instead, he wants to mention the program in the organization newsletter and wants you to let people use their company ID card. Or he wants employees to stop by the personnel office to pick up a card if they want one. If this s the situation, you don’t want to do the program because it will never work. The only members of the targeted organization who will take advantage of the program are your existing customers, and you don’t want to offer discount to them if you don’t have to.
To get around this objection I usually respond by saying something like this:
"As you probably know, we’re an equal opportunity organization. In order for me to provide your company with this special benefit program I have to assure my supervisors that each employee receives on of these special benefit cards. How do you recommend we go about doing that?"
This throws the ball back in the personnel director’s court, and forces her to come up with her own solution. That solution may be to insert the pieces in pay envelopes, to mail them out with the corporate newsletter, or to provide them to the foremen or supervisors for hand distribution to the workers. But if that solution doesn’t allow you to get a card into everyone’s hand, walk away. It’s not worth it.
Some merchants have waited by a factory entrance with special cards or fliers to distribute when the workers leave. There’s nothing wrong with this system except: (1) you are using your valuable time for the distribution, and (2) you lack the credibility you would have if the program were sanctioned by the company or association.
Educational institutions are also a great place for using value cards Any kind of post-high school student body is a good potential customer base. You might try beauty schools, vocational or technical schools, junior colleges, and so on. Smaller schools are usually more cooperative than larger ones because they are willing to scramble to offer their students even little pluses.
A large college is much more difficult to infiltrate. For example, Ohio State has about fifty thousand students on its Columbus campus. Going after the entire student body by making a pitch o the administration can be tough at best and futile at worst. But any large organization is usually made up of any smaller ones. So instead of tackling the central administration of such a large college you might do better to approach a college organization like the Greek council, the dorm board, the student bookstore, the athletic department, and so on.
Each college is different, so learn what its internal groups are. I if the college provides a significant portion of your business, you need to know the campus like you would any neighborhood. The special challenge for businesses that serve college markets is that the entire student body turns over every four years. Know where the opportunities lie. Buy a subscription to the student newspaper. Call the admission office and say you’re interested in sending our daughter to that school and request their admissions package. If you have any students working for you, ask them about the key organizations and associations on campus.
I want to college at Indiana
University in Bloomington. As a student director of the union board, I
was responsible for some of the programming intended to generate increased
use of the student union building. We had a network of students in all
of the dorms whose job was to announce upcoming events by putting posters
in each dorm bathroom above every urinal and on every stall door. We had
very high readership. Knowing how to tap into an organization like that
could be more powerful than a big ad budget.
You have several different types of cards form which to choose. One powerful version is the "long-form" value card. This is a vertical piece printed three-up (three to a sheet of 8 ½ x 11 card stock). The bottom part is the size of a business card and contains the name of the promotional partner and the expiration date. The top part has an explanation of how the value card works. It can be perforated or printed with a dotted line, to facilitate separating the top portion from the bottom card, which is kept.
Once you have the master artwork done, the only thing that changes is the logo (or name) at the top, the "dear [student, employee, or member]" salutation, the company name on the card, and the expiration date. You may also want to test a few different offers.
There are also fancier versions of the value card. Cable Saver is a value-added program used by Coaxial Communications (see Figure 4-6). This project is sponsored by local cable TV companies as a means o provide added value for cable subscribers. In this respect it functions like a "reverse cross-promotion" (covered later in this chapter). The cable company gets area businesses to provide special discounts for cable subscribers who each receive a special cable saver card. The special deals are advertised on a dedicated cable channel as well as through print advertising.
The interesting thing about this program is that the merchant can change his or her offer on a weekly basis if he or she wants to. Customers tune into the Cable Saver channel to see what special deals are available. Since potential customers have to be cable subscribers to get the deal, the merchant’s price credibility was protected. The Cable Saver card is plastic, with the subscriber’s name embossed just like a credit card.
The difference here is that
the Cable Saver Card was good at many different merchants. The merchants
got free advertising on cable TV, and the cable company was able to increase
the value of their service at no cost to it.
At seminars I am often asked what I think of "Welcome Wagon" and other programs that deliver certificates to new households. My initial reaction is: If it works for you, use it; If it doesn’t work for you, dump it. There is no right way or wrong way to advertise. The only thing that counts is results. Did it work for you?
Having said that, I must admit that I don’t consider "Welcome Wagon" programs and their clones as Streetfighter Marketing because they cost real money. Moreover, your competitors can use those same programs. There may be some other services in your area that help you to reach new move-ins. But you must weigh the cost against the result to decide if such services are right for you.
You can also look for free ways to achieve the same goal of reaching new move-ins. Ask yourself, "What are the things that people do when they first move into the neighborhood?"
The promotions I have mentioned
so far are one-way promotions: Your promotional partner hands out your
advertising to his or her customers. The value of the certificate the partner
hands out provides those customers a little more for their money at no
cost to the partner. A variation of this system is the two-way promotion.
In this marketing strategy, you agree to hand out each other’s promotional
pieces. The advantages of this strategy is that (1) it’s easier to set
up, and (2) you don’t have to provide a value on your piece to get distribution.
The disadvantage of a two-way promotion is that you’re stuck with handing
out the other person’s promotional pieces. (see Figure
4-7)
A reverse promotion is one in which you collect many certificates and use them as a value-added for your customers. This is usually done as a coupon booklet. For example, you collect eight different offers from noncompetitive businesses in your neighborhood: the car wash, the bookstore, the record shop, the movie theater, the fast-food restaurant, the tire dealer, the dry cleaner, and the health club. The offers should be significant—the redemption value for this little booklet might be $25 or more if the consumer used all the certificates. This makes a nice value-added for your customers. Moreover, your eight partners in the booklet promotion now would be perfect targets for your individual certificate promotion. Thus you get a total of nine promotions in one shot (see Figure 4-8).
The reverse promotion is also used for specialty retailing. Here’s an example in which the sought-after customers are those planning weddings. Instead of offering a booklet, the piece offered was a quality 5 ½" x 4 ¼" envelope filled with engraved certificates to class-it-up a little (see Figure 4-9). Each participant in the piece—florist, bakery, caterer, photographer, travel agent, limo rental, printer, entertainment, tux shop, bridal shop, hair stylist, jeweler, and so on—provides a savings on some wedding-related expense.
The ideal place to distribute this packet would be when the couple buys their engagement ring. But I’ve seen a bridal shop use this kind of package as an incentive to commit to it. If a competitor offers a service at a lower price, you can use the "specialized reverse promotion" with total savings of $200 as a way to convince potential customers to choose your service.
We used the same technique
for an apartment complex. In this situation we created a one-sheet version.
The first message was from the property manager, and the other six panels
were from neighborhood businesses. The value of all the certificates was
about $10. A new sheet would be given to residents every month. Typical
participants were the local Dairy Queen, the dry cleaner, the health club,
the auto repair shop, and so on. When a potential new resident balked at
the price, this piece could be sued as an incentive to increase the perceived
value of the property.
This is a more advanced technique. Once you get yourself established, you may find that there are a handful of other noncompetitive business owners who are equally as creative and aggressive as you are. In this situation, it may make sense to do some cooperative promotions. In addition to a typical "two-way," you may want to create a piece that contains savings form both of your businesses, after which each of you sets up a promotion using that piece. In this way you get twice the distribution for half the effort. If you have three businesses in your group, you triple your effort.
This technique works particularly well for businesses that may have something in common. Five merchants located in the same little shopping center might make a good coop group. Or perhaps you and the managers of other area businesses owned by the same parent company could form a coop group.
A department store could
form internal coop groups by having the managers of six different departments
work together on a coop promotion.
Before I started consulting and speaking full time for my living, I was part-owner of a nightclub. As you can imagine, I had many competitors. Many of my customers would visit three or four clubs in a single night. To turn this "bar hopping" to our advantage, me and six other club owners got together to share business ideas once a month. From this loose association of competitors we came up with a promotional idea to help all of us.
We knew that we had perhaps
twenty-five or more direct competitors out in the marketplace. So we agreed
to provide each of our customers who left any one of our seven establishments
early enough to go "hopping" with a certificate for saving at any of the
other six places (see Figure 4-10). We thought
that if we could get them to hop in the "loop of seven," we’d keep them
there for the night. Even though not every club would benefit equally,
all benefited enough to make it worth their effort to distribute the certificates.
Value cards are a cross-promotion variation that allow you to get free distribution of your promotional message through neighborhood major employers, associations, organizations and educational institutions.
Value cards are set up much the same way as retail merchant certificates, but include minor changes in the presentation of the "you" benefits.
The biggest difference between the value-card offer is used repeatedly for an extended time; thus a value-card offer should be set lower than the one-time savings offered in a merchant certificate.
It’s critical to ensure that the promotional partner provides distribution to each employee, member, or student.
Other variations allow you
to reach twelve times as many people per piece, to contact new move-ins
to the neighborhood, to get other merchants to increase your promotional
penetration, and even to get your competitors to help you.
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