Cross-marketing is one of the most effective marketing tactics. In essence, it is a cooperation of two or more companies (not competing with each other) that recommend each other’s products or services. There is often an additional benefit to the client as well, e.g. a bundle discount. For example, the owners of an ice cream shop and an amusement park can cooperate by advertising each other by giving a special discount/bonus to clients coming from the business partner. At the same time, a Coca-Cola ad at a local sandwich bar is not a typical cross-marketing initiative. Even if one gets a free bottle of coke with every meal. The bar’s owner does this initiative on his own, usually without the Coca-Cola company even knowing about it. Another thing is that this ad would not work the other way around. Coca-Cola would rather not put a sandwich from a local bar on its ads.
Is cross-marketing good for everyone?
Cross-marketing is especially effective in three major cases:
- All other lead sources have depleted or turned out to be ineffective
- A business is in the shade of bigger players, e.g. being a subcontractor for major companies
- The marketing budget is tight
Cross-marketing activities are most commonly based on a mutual agreement between two companies, hence they usually don’t cost a lot. In fact, they sometimes cost nothing when you start and you only pay once the first customer shows up. The payment itself is rather a discount. At the end of the day, you pay after you get the money you wouldn’t otherwise get in the first place. This is an excellent way to get first customers without spending a dime, especially if your company is just starting to build its name. For small businesses and startups, getting “attached” to bigger players through cross-marketing cooperation is especially beneficial. They get to get extra credibility, trust, and visibility from clients of the bigger guy.
Where to look for companies to partner with?
In a classic cross-marketing example, the two companies that decide to cooperate with each other, serve the very same clients, or at least have the same target client profile. Similar to the ice cream shop and amusement park example, it’s best to look for synergies where clients chose both companies’ products/services on their own. A few more examples: beard oil shop & a nearby barber, tailor & shoemaker, bakery & tea shop, etc.
3 tips for finding cross-marketing partners:
- Asking own clients about what products or services they usually purchase around the same time as ours
- Investigating what types of companies are competitors partnering with
- Participating in conferences and networking events
Cross-marketing in practice: SolveQ & Wetog
An example of how companies from seemingly different areas can cooperate is a partnership between SolveQ and Wetog. SolveQ creates custom software for industrial & logistics companies, while WeTog is a cybersecurity powerhouse. The owners have met at a conference & quickly realized they both have clients from the logistics industry. This is how Simulo was born – a platform with both companies’ services for transportation companies. It offers custom software and apps for logistics companies, and secures applications and all communications within the company. The key benefit is getting the full custom package from two companies that are fine-tuned to work with each other.
Cross-marketing is one of the most effective marketing tactics for businesses in any industry. Key benefits are low cost, rapid deployment, and outstanding cost-effectiveness ratio. Moreover, the tactic is easily scalable and universal, as the company may cooperate with more than one partner.