One of the ways to help drive sales is through cross-promotion, which occurs when two or more companies work together to sell products or services to attract new customers. An example of a cross-promotion is when a bank and a mortgage company sell to new clients. A new customer of the bank may need a mortgage, and a new mortgage client may need a bank account.
Benefits of Cross-Promotion
One of the biggest benefits to cross-promoting is that it increases sales without incurring extra costs. Typically, if a company wants to increase its marketing audience, it needs to spend more money to increase the volume of advertising. With cross-promotion, partnering with another company can increase the marketing audience without the extra cost. This can be done by joint advertising or marketing, where both companies deliver the same message to new and existing clients. This way, instead of each company delivering its own different message to the same target market, both can combine marketing efforts in a single campaign. When two companies combine to cross-promote, it is a win-win situation for both parties. Since neither company competes with the other, both win when selling to a new potential client. The new client will most likely want both of the services or products, especially if they are positioned in a single integrated package. This can be done through product incorporation and is a very common and effective technique. Cross-promotion is also an excellent way to increase brand equity. If one of the companies has a much more recognizable brand name, the smaller company immediately benefits from being associated with it. This may also increase brand equity in niches in which the other company has no brand awareness. Say a nonprofit health organization asks the head of a local medical practice to speak at a public event, the medical practice immediately gains brand equity. The nonprofit also gains brand equity by demonstrating that a well-established medical practice supports its efforts.
To find cross-promotion partners, begin by looking at industries that target the same market yet do not compete with your business. For instance, an accountant has many cross-promotion partners that are not competitors, such as bookkeepers, financial advisors, and estate planning attorneys. A bookkeeper would be a good partner because it is familiar with a company’s financial statements and knows which clients need a new accountant. Both accountants and bookkeepers are looking for the same type of clients, and both benefit from referring one to the other since neither are competing for the same services. Another example of cross-promotion is to offer discounted rates if both services or products are utilized by the customer. A cross-promotion partnership could be between a dry cleaner and a tailor. Neither compete with the other, but both have the same market. As an incentive to gain new clients, the companies could offer discounts if both services are utilized instead of just one. This increases the effectiveness of their marketing campaign and drives new sales. Online cross-promotion is also an excellent way for companies to be more effective when marketing. Social media can be used to increase traffic between two cross-promoting companies. Having links and special pages dedicated to a cross-promoting partner may generate interest that was not there before. Newsletter and email marketing can also be more effective since both companies have doubled the size of their databases.