Joint marketing can be a win-win for participating companies.
Joint marketing is an approach for getting new customers. One business leverages the relationship a company has with its customers. For example, a car wash company obtains a joint venture arrangement with an auto repair company. The auto repair company gives discount coupons for car washes to his customers. The car wash company benefits from the customer good relationships the auto repair company has with its customers. Joint marketing can reap additional customers and profits by spending very little of your own money.
Objectives
Decide on the objectives of a joint marketing strategy. For example, you may want to sell your product to a new market or sell new uses for the product. Decide what return you want from your investment in a joint marketing program.
Partners
Find partners who serve the same market you do but are not competitors of yours, recommends JS Wev. For example, a real estate broker and gardener are both interested in new home buyers. The real estate broker might pass out discount coupons for gardening in return for a percent of the gardener's new sales.
Compensation
Decide on how the endorsing partner will be compensated. Determine if he will get a percent of sales and for how long. Develop a system for monitoring sales to track earnings owed.
Agreement
Develop a written agreement including important points such as confidentiality, responsibilities and payment schedule.
Action Plan
Develop a mutually agreed upon action plan for the joint marketing strategy. Decide when the endorsing company will promote the other company's products, what the message will be, when and how joint marketing commissions will be made.
Promotion
Decide how the endorsing party will promote the other party's products or services. For example, "As a valued customer, we would like to make you aware of an outstanding product from a company we have been dealing with. (Describe the product) Through special arrangement, we have obtained a 10 percent discount for you. To order the product, simply call our customer service number."
Warnings
Do not approach another potential endorser until you have a well thought out plan for how the joint venture will work and how the potential partner will benefit. Anticipate any objections to your proposal and be prepared to respond to them. Do not overlook benefits of joint venture marketing beyond just making money. For example, you can share resources such as a distribution channel.
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