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Give And Take
Why it pays to
partner up on your marketing efforts
Entrepreneur magazine -
March 2001
By Melissa Campanelli
To really
make it in e-tailing, you've got to keep customer-acquisition
costs down. You have to find creative ways to move merchandise
and increase sales. And you must add value to your customers'
shopping experiences.
The secret to achieving all of the above—and more—may
lie in a reliable strategy employed by the most innovative
dotcoms. Known as reciprocal marketing, the tactic basically
allows you to offer your paying customers discounts at your
online partners' sites as well as provide discounts to your
partners' customers on your site. To illustrate: If your
customers spend $40 on your Web site, they then receive a gift
certificate or discount coupon to use at a partner Web site.
"Reciprocal marketing programs are a win-win-win for
customers and any participating merchants," says Shel
Horowitz, a low-cost marketing consultant and author of Grassroots
Marketing: Getting Noticed in a Noisy World (Chelsea
Green Publishing Co.). "You add more value to the
customer's purchase and, at the same time, allow the partners
in the deal to tap into each other's customer bases."
One company that's found fantastic success with online
reciprocal marketing programs is Proflowers. com, a San Diego
Internet flower company. In 2000, for example, in an effort to
increase sales—as well as motivate customers to purchase
their products before the Christmas rush—the 102-person
business launched a reciprocal marketing program with The
Bombay Company, Gap.com, Omahasteaks.com and Wine.com.
Here's how it worked: Customers who ordered a product from
Proflowers by December 13 received an order confirmation
e-mail containing a special URL to access gift offers. Those
offers included $20 off a purchase of $75 or more at Wine.com
and free shipping for customers who spent $75 or more at Gap.com.
Customers who clicked on the links could enter the partner
sites and redeem their holiday gift offers. Proflowers, in
turn, has marketing arrangements with each partner. In some
cases, it has links on its partners' pages allowing those
customers access to special deals and discounts.
The company had also found success launching an earlier
reciprocal marketing program prior to the holiday season. Last
spring, Proflowers implemented a strategy for Mother's Day,
the largest flower-buying occasion of the year. Here, when
customers ordered from Proflowers in time for a delivery no
later than the Thursday before Mother's Day, they received $10
off any purchase at Gap.com. At the same time, customers of
Gap.com who spent $40 or more received a discount of $10 to
use at Proflowers. "The programs were very
successful," says Steven Bellach, Proflowers' chief
marketing officer. "We shipped many products early as a
result of the offers, and we also increased sales. We met both
of our objectives."
In addition, the programs were relatively inexpensive to
implement. "This is probably one of the lowest-cost
marketing deals that we do," says Bill Strauss,
42-year-old co-founder and CEO of Proflowers. "In many
cases, there is virtually no cost associated with them. We
only offered a discount to our partners' customers, which
frankly is an acquisition tool for us."
But despite the clear benefits and cost savings, Bellach
says reciprocal marketing is just starting to catch on in the
online world. "These kinds of deals are the way the
Internet will be working, going forward. The beauty of it is
that no cash changes hands between merchants, and you get
people when their wallets are still open."
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