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Julian Gratton
June 1st, 2009

The rise and rise of collaborative email marketing

by Julian Gratton

Yellow PagesGood old Yellow Pages. They don’t just help with the nasty things in life, like a blocked drain – they’re there to help you understand about collaborative marketing too. See, collaborative email marketing is the practice of unifying lots of brands from a similar sector under one big marketing umbrella… and it’s a practice that’s really starting to take off.

Bringing companies together
Collaborative marketing, also called ‘horizontal’ or ‘fusion’ marketing, is the strategic alliance of two or more companies under a single marketing banner. In layman’s terms, it’s a case of ‘you scratch my back, I’ll scratch yours’.

Of course, this is nothing new. Companies have formed alliances for years to help promote each other’s brands or sell each other’s products. Think of James Bond films and Aston Martins, Disney and McDonald’s, Pepsi and Brand Beckham. If you fly with Emirates they’ll recommend you book your hotel with lastminute.com and hire your car from holidayautos.co.uk. But these are all examples of very different companies offering very different things, enjoying a mutual association that increases their exposure in a market they may otherwise not reach. So what happens when it’s two companies that are in direct competition with each other?

Directories and comparisons
One of the pioneers of bringing competitors together is the Yellow Pages business directory, where companies are listed in categories based on the product or service provided. The idea was that putting a whole host of similar businesses in one place makes life easier for the consumer, as they can ringaround knowing they’re in with a good chance of finding what they’re looking for. Fly Fishing by J.R. Hartley? No problem.

A newer development is the price comparison website, although the benefit to the consumer is much the same – save time by finding everything you’re looking for in the same place. Why trudge around every high street insurer to compare prices when you can do it in seconds online?

The reason many companies sign up to these services is simply because they’re afraid of missing out. If your competitors in the antique toy train business are all listed but you aren’t, you are effectively waving goodbye to a load of potential customers. Surely it’s better to have a stake in the market, even if it means advertising beside your competitors, than to completely miss out on it.

True collaboration
While directory listings may just be a way to equal the playing field with those who offer similar services to yours and share a target market, true collaborative marketing involves you consciously teaming up with them to produce a joint marketing campaign. Your competitors become your business partners.

One of the most common forms of collaborative marketing is direct mail, where a number of different companies club together to send out DM packs and door drops. In fact, last year over £12 million was spent on collaborative direct mail in the UK, and experts believe that will rise to a whopping £22 million by the end of 2009. The question is… why? Don’t businesses want exclusive access to your custom? Why would they want to spend their marketing budgets jostling for your attention next to their competitors on a directory, DM, door-drop or website?

The benefits of collaboration
Well, there are many benefits to collaborative marketing. For the consumer it gives added value; a DM pack containing special offers from 5 top insurers offers more to the consumer than a single offer from one insurer, so is more likely to be read. The collaboration also represents a greater impartiality when compared to a solo DM in which one brand blows its own trumpet.

For the company, the main incentive is cost. A collaborative DM pack can cost as a little as a tenth that of a solo campaign… and it delivers a higher return on investment too. See, the conversion rates are generally lower but so is the cost per acquisition, so sending out ten collaborative packs will give you much better value for money than one single-branded DM.

It’s good for your image too, especially if you’re a small company. If you manage to squeeze onto a collaborative DM with one of your larger competitors you look like you’re in the same league as them. Essentially, your brand gains kudos by piggybacking on the slick image of your more successful competitors, while the pack actually gives you equal billing to explain why your company is the better choice. That’s one of the benefits of price comparison sites too; all the big players are there, but it’s a level playing field and smaller businesses have equal opportunity to peddle their wares.

Integrating further
Collaborative marketing doesn’t have to just mean sharing space on a mailing or website – it can be far more integrated than that. Take The Book Depository for example. It’s difficult to imagine a start-up online book seller having much success with Amazon around, yet less than five years ago The Book Depository launched and was profitable from the very first month. Now it’s the fastest-growing book distributor in Europe with over 1.8 million titles available for shipping. So how did they do it?

The key, according to their company statement, is that they don’t see themselves as Amazon’s competitors. “We complement Amazon by providing books which have poor availability and offering good discounts on certain titles which Amazon are unable to. On the other hand, we recognize that our customers want books quickly and so if we do not have stock or if Amazon is considerably cheaper, our customers are able to order direct from Amazon via a link from our website.” You read it right – they actually post links that send their customers to Amazon. So the online book giant gets free links to its site plus access to The Book Depository’s stock, allowing them to offer rare or out-of-print books they would otherwise not be able to. In short, it’s a mutually beneficial collaboration.

Symbiotic marketing
Talking of mutually beneficial relationships, how about ‘symbiotic marketing’ – collaboration between company and consumer. A good example of this is the Nike+ Human Race, which encouraged people everywhere to run a 10km race, upload their stats to Nike’s website and see how they stack up against other runners around the globe. Which runner wouldn’t want the opportunity to test themselves against their peers? To top it off, Nike even promised to donate to one of 3 charities of their choice if they completed a full 10km. With all this offered free of charge, participants didn’t object a jot to the gentle nudges towards Nike’s running trainers and sportswear.

The key to symbiotic marketing is that consumers feel they’re getting something worthwhile from a company, and are therefore very happy to foster a relationship with them. Think of all those mobile phone companies who give away free handsets – it’s because they know customers who feel they’ve been given something special by their provider are unlikely to change… even when the rates go up.

Walkers recently ran a campaign where customers could vote for a new flavour of crisps. If you voted by SMS you got a message from 02 offering you 2 SIM cards, absolutely free. All you had to do was provide your name and address. This is data capture with a difference – no underhand tactics or hidden catches, just the formation of a mutually beneficial relationship.

Collaborating is easy
Collaborative marketing doesn’t have to be complicated… and it doesn’t have to cost a penny. It can be as simple as two antique shop owners agreeing to recommend customers to each other if they are looking for something they don’t have. Collaborative marketing is basically about fostering a positive, rather than combative, relationship with your competitors.

Here’s one final example that shows how mutually beneficial relationships exist even among fierce rivals. Since 1975, BBC and ITV have held a gentleman’s agreement never to schedule Coronation Street and Eastenders at the same time, as it would significantly damage the viewing figures of both soaps. Instead, they are generally shown back to back, which actually helps to direct viewers across the channels. This agreement has been broken a couple of times in the last 24 years, but these were deliberate publicity stunts mutually agreed by the two broadcasters.

So the next time you’re thinking about how to get one over a competitor, or spending thousands of pounds on a solo DM campaign, just take a moment to consider whether you’d be better off taking a more collaborative approach to marketing.

Find out more about how collaborative marketing could help your business… call us on 0161 872 1361 or click here.

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