In the late 1980s, Vicki La Plant started encouraging contractors to cross market with local, non-competitive businesses. In essence, contractors cross mail to each other's mail lists. They pass out coupons for other companies on service calls, refer each other, and find other ways to help each other, reducing marketing costs. Think of cross marketing as business networking taken to the next level.
Cross marketing can be expanded beyond in-home service businesses. The late Tom McCart once persuaded a pizza delivery company to tape coupons for one of his clients on their pizza boxes. In exchange Tom's client passed out pizza coupons and menus on service calls.
Virginia contractor, Dean Thomasson, used a similar approach when he worked an arrangement with a local fast food restaurant. The restaurant inserted coupons for Dean's company on drive through orders and Dean passed out coupons for free sandwiches on service calls.
Anyone who flies and browses through the airline magazines has undoubtedly encountered ads for the "Great Steak Houses of North America," sponsored by the Independent Retail Cattleman's Association, which appears to be little more than a restaurant marketing alliance run by a Nashville marketing guy. Yet, its endurance is a testament to its effectiveness through the years.
Increasing marketing effectiveness is the reason for cross marketing. Your effectiveness will be best when a high degree of trust exists between the customers of the different companies. When Houston's Hallmark Air Conditioning and Jarrell Plumbing cross mailed to each other's customer lists recommending a service agreement from the other company, it was the single best direct mail initiative the companies experienced.
This makes sense. Depending upon the survey you reference, the number of homeowners who locate service companies by referral runs around 70%, making referrals the number one source of lead generation. Additionally, people tend to assume contractors know who the good contractors are in related trades. Combine the tendency to rely on referrals with the belief that contractors have inside knowledge, add a trust relationship with the referring contractor, and the response rate should be the best experienced.
At the Service Roundtable we've encouraged contractors to form marketing relationships with complementary companies. To make it easy, we've created marketing pieces like flyers and magnets promoting the "Distinctive Service Companies" of your town. We've created mail pieces like the one below.
If the Service Roundtable doesn't serve your industry or, for some reason, you don't want to join the Service Roundtable, create an alliance on your own. This is what Jim Ritter of Transworld Electric did in Charleston, SC. He assembled a home remodeling company, kitchen remodeling company, heating and air conditioning company, plumbing company, and pest control company to join his electrical contracting company as the Elite Home Connection.
So far, the Charleston group shares a one-page website linking their companies and a phone number for consumers. Presumably, the call center is an answering service with call forwarding to the appropriate company. More joint marketing may follow, with the cost for each company equal to one sixth of the burden of the cost of marketing independently.
Cross marketing is a proven winner. It increases marketing effectiveness. It reduces expenses. Why aren't you cross marketing?
Matt Michel is CEO of the Service Roundtable, HVAC's largest alliance. The Service Roundtable helps contractors improve their marketing and reduce costs. Learn more at ServiceRoundtable.com. You can reach Matt by email at [email protected] roundtable.com or toll free at 877/262-3341.