Are your customers telling you the whole truth?
Marketing home services is vital for survival and growth. As necessary as it is, service providers need to monitor and limit advertising and marketing expenses while continually striving to reach more potential customers.
Co-op marketing (advertising) offers remodelers an opportunity to reach more clients at a reduced cost. By working with peers and subcontractors, everyone can benefit from more advertising.
What is co-op marketing?
Co-op marketing involves contractors banding together to advertise their services in a single ad or ad campaign. For example, remodelers and home builders often use subcontractors for various tasks, from painting to carpentry to hanging drywall. If you find that you consistently rely upon certain subcontractors, you may want to approach them about banding together to share advertising costs.
Everyone involved can pay a portion of the advertising expense while promoting their brands and services. This can allow for more ad placements by spending the money saved on buying more ad space at a fraction of the cost of individual ads for each co-op member.
Understanding the ins and outs of co-op marketing before you take the plunge allows you to have a smoother transition into shared advertising.
How co-op marketing typically works
Each contractor or subcontractor agrees to pay a share of the cost for creating and placing the advertising. It is common for one company, such as the homebuilder or remodeler, to be the “headline” advertiser, with additional services pictured (including contact information).
The group agrees to rules about how costs will be shared, how decisions will be made and how to update individual images and other information for each of their businesses. Make it clear who can choose where to place the ads, including print, digital, social media and videos. One decision-maker on placements works best to streamline the advertising process.
The pros and cons of co-op marketing
Like any marketing effort, there are pros and cons to co-op marketing. Knowing whether the good outweighs the bad will help make your decision about who to partner with for this type of marketing effort.
Pros of co-op marketing
Here are some benefits to using co-op marketing efforts
Affordability
You can get exposure for your business at a significantly reduced cost.
Improved reputation
Your association with other quality service providers can boost your customer confidence.
Broader exposure
If you use the money you save through a co-op for more ad placements, you extend your reach and, potentially, your customer base.
Cons of co-op marketing
While there are many benefits to co-op marketing, it also presents some challenges.
You don’t shine as much
You give up ad space that could be used to tout your services.
More managing required
You must keep up with who pays what and how much is owed. It would be best if you had agreements and frequent communication about upcoming advertising opportunities.
Target audience can narrow
You will need to place ads targeted toward customers all providers want to reach. And, your own focus may have to narrow for those specific audiences.
Mismatched messaging
If one provider emphasizes discounted prices and another wants high-end clients, advertising efforts can send jumbled messages to potential customers.
Shared design
The look of the advertising needs to reflect the branding and messaging of all involved. Discuss with everyone how the ads should look and feel.
Tips for getting started with co-op marketing
Follow these tips for a quick-start way to implement a co-op marketing strategy into your business efforts.
Know your business goals
Banding together with others must serve your needs. Don’t sacrifice customer reach by choosing members whose goals don’t align with yours. If you are looking to increase business, for example, someone else may be looking to maintain present levels of income.
Hold initial meetings
Get together and agree on practices, goals and methods. This is the time to write it all down and make sure everyone understands how you will operate as a group. Air all concerns, so nothing comes up later. If there is disagreement, it should be resolved at this meeting.
Make a business plan for the co-op
Include audiences to be reached, methods and remedies for conflicts. This document should also indicate projected sales from co-op advertising. You can include the number of inquiries you expect to receive over and above what each person in the co-op has been receiving through their individual marketing efforts.
Work with an advertising designer
Don’t rely on members to design the ads or even their portion of the ads. You need to look like a professional group. Agree to hire a professional graphic designer.
Meet and approve the first ad
Approve the first placement, including costs. Make sure everyone is aware of their required contribution. It can be useful to have everyone sign off on an agreement that states each person’s payment and indicates whether that payment has been received. Continue this practice for future advertising.
Create a legal agreement
In addition to the business plan, create a legal agreement stating each person’s financial responsibilities and duties. Include remedies for breach of contract. This shows that everyone is serious and that they are committed to contributing to successful ad campaigns.
Final thoughts
Co-op advertising can boost your reach while providing more income for everyone involved. But those are not the only issues to consider. You must feel comfortable with the personalities in the group, the quality of their work, their willingness to pay their share and how your brand will look coupled with theirs.
It’s important to remember that the overall goal of this strategy is to improve your overall marketing efforts. If you are comfortable sharing the efforts for a greater reach with less overhead costs, follow these tips to get started on your co-op marketing strategy today.
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