From the April 2000 issue of Entrepreneur

As entrepreneurs, many of us think of ourselves as independent souls, taking on challenging competitors and making our businesses successful at almost any cost. The typical small business owner makes independent decisions and closely guards those small company secrets of doing business. While this "me against the world" mentality can give you a competitive edge, it can also make you miss some of the significant benefits-and savings-you can enjoy through cross-promoting with other businesses.

Contact Source

Three Beans Coffee Co., 140 N. Haddon Ave., Haddonfield, NJ 08033, (856) 354-2220

For Less Cost, Cross

Need some proof? Check out Three Beans Coffee Co. in Haddonfield, New Jersey. Proprietor Jacqueline Straijer, 36, has made an art form out of cross-promoting her coffeehouse with other local businesses. From the art on her walls to the coffee in her brewers, Straijer has struck strategic alliances with several business partners, and the results have been outstanding. Three Bean has expanded twice since it opened nearly four years ago, has more than quadrupled the size of its space and had sales totals reach $250,000 in 1999.

"I don't spend a lot of money on advertising anymore," says Straijer. "I get more customers and more new business through cross-promotions-at a lower cost than ever before."

Among some of the savvy deals Straijer has struck: The local community theater and Three Beans offer reciprocal discounts and are currently negotiating a deal to put a coffee concession stand in the theater's lobby. She and a neighboring cigar-store owner buy joint ads in the local newspaper and send mailings together, cutting their costs in half. By working with a local entertainment company to launch a community event, Straijer received sponsorship announcements on a local radio station several times per hour for nearly three weeks.

Straijer has also cut some of the operating costs at Three Beans Coffee Co. through cross-promotion, including decorating the shop's walls with artwork from a local gallery and promoting a local music store, which, in exchange, organizes and replenishes Three Beans' CD collection by replacing disks that get scratched through frequent customer use.

Straijer says, however, that the best benefit comes from working to support her own community. "Much of the economic strength of a community comes through small businesses," she says. "If you want to keep your community economically sound, the best thing to do is to support your local small businesses."

Choose Wisely

Think the idea of a team effort sounds good? Remember these tips:

  • Find birds of a feather. The key to successful cross-promotion is to find other non-competing businesses that are going after the same customer base as your business. Three Beans and its cigar-shop neighbor enjoy success because they have similar geographic and demographic audiences.
  • Choose wisely. Remember that you are tying your company's reputation to your promotional partner. Make sure that you choose businesses and people you trust.
  • Make sure it makes sense. Don't spend money on promotions you think may not be right for your company. If your promotional partner and you are not seeing eye-to-eye on key messages, content or image, take a pass on the project.
  • Planning makes perfect. Make sure each element of the promotion is clear and that both you and your partner know what to expect from each other. Try your efforts for a fixed period. That way you can evaluate your efforts, and, if they're not working, you can exit gracefully.
  • Good paperwork makes good cross-promoters. Once you've finalized the details, put everything in writing, including how much the promotion will cost, if applicable, and how it will be paid. If a significant investment is involved, such as for a major joint advertising or mailing, you may wish to have your attorney draft a contract.

Straijer plans to continue her cross-promotional efforts and actively makes referrals through the network she's built. In addition to the benefits Three Beans has enjoyed, Straijer's clients have found jobs, struck business deals and sold houses (five, to be exact) through her expansive cast of contacts. And that keeps customers coming back.