A local business co-op model worth studying

15 replies
Towards the end of last year I was approached by a cold caller who mentioned I was referred to them via one of the golf clubs we do regular work for.

I get many approaches from cold callers trying to sell advertising or other marketing services but this call was a little different in that they mentioned my client by name and the call was from a mature native English speaking female.

As I enjoy studying some marketing I decided to hear them out and listen to what was being offered.

She was not giving the game away but trying to get me to meet with the business owner who was working with a promotion at the golf club, who were already my client, so I succumbed and agreed to meet with the owner of the promotion.

The meeting was scheduled and I expected the normal presentation.

You know the type.

We are promoting a calendar, club newsletter, beer mats, club signage etc and we want you to join in on the promotion.

Anyway I was pleasantly surprised.

The co-op marketing owner visited me shortly after to pitch the idea they were selling.

It was an expert no nonsense pitch and the offer was explained quickly with no fluff and the idea was sold in a very short time because. . .

the deal was good

the presentation was professional

there was no hard sell

there was proof of product (physical high quality)

there were others involved I knew

there were terms to suit my situation

there were other influential factors

Anyway what was this promotion I was being targeted to be part of?

The promotion was something this business had been running successfully for over 30 years and stemmed out of them originally being a printing business and also a golfer.

Many years ago the business owner was due to play in a club tournament.

Not something high end just the regular weekend type event run at every community sports club nearly everywhere.

The job had fell onto the the business owner to draw up the scorecard and the elimination table for the event that was happening that day. . . apparently the club had run out of the round score charts and needed someone to quickly sketch up the 16 pairs that were going to play that day. and the knockout structure. - flow chart

Out of that experience a national business developed that has survived to this day and will most probably survive a little longer because of its simplicity and the network this business has built.

The idea was to have the draw sheets with each round displayed paid for by businesses who supported the club.

It started with the business owner printing some draw sheets for his club and getting a few local "mates" to contribute towards producing the printed blank draws for the club by doing the standard idea of surrounding the central information with advertisements.

The idea was expanded to approach every sports club. Tennis, Lawn Bowls, Golf etc. any club where they had regular amateur tournaments each and every weekend with the offer to print their draw sheets for FREE if they approved of businesses sponsoring the space around the outside.

Much like the 9x5 mailer or similar co-ops.

Anyway this business has every club (that has my ideal target market) on board as a user of the draw sheets in my local area some 40 plus clubs are involved in my area.

Researching the operation that have thousands of clubs involved across Australia and the operation is run by TWO people. - They outsource the printing nowadays.

I spoke at length after becoming a supporter because I wanted to understand the full story and this business freed the operator from being a traditional offset printer into an entrepreneur that had people on a 2 year billing cycle.

It takes them 2 years to go across Australia and they only ever have one or two spots that become available ( that might seem like sales speak but I've got to know the owner) and they have high repeat long term support from local businesses.

Some key points I would suggest if anyone would like to emulate this idea.

1. Get a group of significant clubs on board first.

2. Build a network of businesses / business owners who already support those clubs

3. Get a group of known business leaders to take out positions

4. Make an offer that reflects what businesses expect.

5. Give them terms that meet their cashflow but don't discount the service.

6. Establish a long-term - in this example 2 years. (remember Yellow pages was 12 months)

7. Approach local non-conflicting traditional businesses who have budget to spend.

8. Sign them up on one visit.

9. Deliver proofs to the business.

10.Bill them professionally

Businesses can obviously make offers in their advertisement to attempt to drive customers but this is not a product that will deliver a business immediate results but traditional business owners understand the value of long exposure to a target market particularly if their target market are more traditional consumers.

Given that the product is only sold into the market every two years also allows the owner to position it as a higher priced product and they don't have to sell a spot each month to a business like the monthly 9x5 type offer.

BTW - This business doesn't have a website. They do have online payments etc but I've discussed the website situation with them and they found they don't need one because they have relationships with every business via phone, email and personal visits.

Hope that gives someone a few ideas.

Best regards,

Ozi
#business #coop #local #model #studying #worth
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  • Profile picture of the author Oziboomer
    Here is a copy of the full sheet so you can see sizes and get an idea of the concept.

    The price point for the ads can be higher because they are NOT small like some of the postcard mailers or some of the calendar type ads where they are crammed in.

    With 21 advertisers the total revenue for this promotion exceeded $30K and multiply that by several areas and you have a pretty big business.



    Best regards,

    Oz
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  • Profile picture of the author Ron Lafuddy
    Good stuff!

    Don't get wrapped around the axle about the size or the format, though. The same type of "relationship selling" can be, and is being done...even on business cards.

    Size and format are less important than the relationships and the market being targeted.

    Thank you for taking the time to post, Ozi.

    Ron
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  • I love the last paragraph...


    "BTW - This business doesn't have a website. They do have online payments etc but I've discussed the website situation with them and they found they don't need one because they have relationships with every business via phone, email and personal visits."


    Nothing beats the good 'ole relationship of phone and personal visits! I wonder if they send out handwritten letters too.
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    • Profile picture of the author savidge4
      Originally Posted by AmericanMuscleTA View Post

      I love the last paragraph...
      Originally Posted by Oziboomer View Post

      BTW - This business doesn't have a website. They do have online payments etc but I've discussed the website situation with them and they found they don't need one because they have relationships with every business via phone, email and personal visits.
      Originally Posted by AmericanMuscleTA View Post

      Nothing beats the good 'ole relationship of phone and personal visits! I wonder if they send out handwritten letters too.
      Because something was said.. I feel the need to comment... I GET the whole phone and conversation relationship thing.. and that in un itself has merit. The no website thing on the other hand... I simply do not agree with this in any way shape or form... And being straight forward, believe this to be a great dis service to their clients above and beyond anything else.

      When I say "their clients" I mean the courses specifically and the business' that are advertised around the card. - If they chose not to use the internet as a method to obtain business that's one thing.. but to not place all of their clients out on the net .. wow

      So let me put this into a bit of perspective.. a website Golf whatever .au .com whatever that lists out regions of AU and then within each region list all of the courses with images and a bio.. then "sponsored" business; from each page with a about us for each business listed on the cards.

      The COST of such a site is minimal at best.. the BENEFIT of such a site could be considered borderline priceless. #1 it would be a source of citation for each site / client. #2 BRAND association across all of these different business'. #3 adding the ability for the Courses to add Tournament dates etc - or the very least a link to directly goto a page on the course site that would list such things

      The overall added VALUE of a site in this instance - at an absolute minimum of cost is ridiculous... AND I am suggesting a directory of sorts vs a lead gen type site.

      The greater issue here is someone like me in an instance like this would NOT spend a single dime. As the OLD guard moves out of the positions that are responsible for these types of business choices and the YOUNGER hipper net connected generations take over.. this business model WILL struggle if not fail. It maybe not tomorrow.. or the next day.. but that time will come.

      But aside from that rant.. Ozi.. I REALLY do appreciate the share.. it is a cool concept and execution. - and REALLY I was going to just keep my mouth shut I swear! hahaha
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      • Profile picture of the author GordonJ
        Originally Posted by savidge4 View Post

        Because something was said.. I feel the need to comment... I GET the whole phone and conversation relationship thing.. and that in un itself has merit. The no website thing on the other hand... I simply do not agree with this in any way shape or form... And being straight forward, believe this to be a great dis service to their clients above and beyond anything else.

        When I say "their clients" I mean the courses specifically and the business' that are advertised around the card. - If they chose not to use the internet as a method to obtain business that's one thing.. but to not place all of their clients out on the net .. wow

        So let me put this into a bit of perspective.. a website Golf whatever .au .com whatever that lists out regions of AU and then within each region list all of the courses with images and a bio.. then "sponsored" business; from each page with a about us for each business listed on the cards.

        The COST of such a site is minimal at best.. the BENEFIT of such a site could be considered borderline priceless. #1 it would be a source of citation for each site / client. #2 BRAND association across all of these different business'. #3 adding the ability for the Courses to add Tournament dates etc - or the very least a link to directly goto a page on the course site that would list such things

        The overall added VALUE of a site in this instance - at an absolute minimum of cost is ridiculous... AND I am suggesting a directory of sorts vs a lead gen type site.

        The greater issue here is someone like me in an instance like this would NOT spend a single dime. As the OLD guard moves out of the positions that are responsible for these types of business choices and the YOUNGER hipper net connected generations take over.. this business model WILL struggle if not fail. It maybe not tomorrow.. or the next day.. but that time will come.

        But aside from that rant.. Ozi.. I REALLY do appreciate the share.. it is a cool concept and execution. - and REALLY I was going to just keep my mouth shut I swear! hahaha
        Well, you are right. But...

        It may go to an Entrepreneur's goals, wants, and state of satisfaction. As I understand this, he rolls across regions of Oz and has several a year, with a lot of repeats, because he signs them up for two years. At 30k a region, maybe his 150k to 210k income is all he wants, and affords him free time.

        I don't know, of course. But there are people, and yes maybe most are the Boomers who have been at it awhile and just don't care what the Internet or Millennials are going to be doing down the road.

        I have an iPhone. I use no apps, once in awhile the camera. I could easily use a toss out flip phone for my needs. So, SMS, apps, etc., have no meaning to me.

        As we boomers age, there might be a move away from tech, or minimum for our final stretch.

        Now, there are many business owners, much younger, who just don't have an interest in doing more, or doing it differently or being on the Internet. Anyone who calls on businesses (like yourself) can verify there are a lot of small businesses resistant to the tech benefits.

        The model you present would, obviously, benefit the courses, the advertisers and probably the guy doing it too. Maybe he will. Maybe not.

        So I do agree with you, like you, I couldn't resist, giving a different perspective on it too.

        On another note, selling ads is a grind, I don't care how easy they are, it is a lot of seeing people, layout work, a lot of slop and mess, which may be worth it.

        I like Ron Lafuddy's simple biz card co-op.

        We like FEWER ads on our vehicles; menu boards, EDDM postcards, or host/advertiser and a quicker, lower cost sell.

        I have spoken with dozens of guys selling ads, many on the 9x12, who try to get the most out of it, and too many spend a lot of time chasing and running after people.

        Give me one or two guys a day who can spend the 595 for the ad, who know the value, don't have to be sold, are easy to get money from, and repeat. In our case, less is more.

        So, how can I use this idea? With a twist? Well, already working on a branded bracket for the March Madness, with sponsors, and GIFTS for those who win a few games...mostly coupons, BOGO, and other ideas. Instead of 40 clubs, can one location; gym, bowling alley, golf course, bar, tavern...have their own CONTEST and can I sell a few ads to make it worth my while?

        I like the idea, but being a lazy old man, I look for ways to DOWNSIZE it, make it faster, and bring in small potatoes of cash in days (cause who knows how many I have left).

        Thanks Ozi for this, we got several new ideas from it.

        GordonJ
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      • Profile picture of the author Oziboomer
        Originally Posted by savidge4 View Post

        Because something was said.. I feel the need to comment... I GET the whole phone and conversation relationship thing.. and that in un itself has merit. The no website thing on the other hand... I simply do not agree with this in any way shape or form... And being straight forward, believe this to be a great dis service to their clients above and beyond anything else.

        When I say "their clients" I mean the courses specifically and the business' that are advertised around the card. - If they chose not to use the internet as a method to obtain business that's one thing.. but to not place all of their clients out on the net .

        The greater issue here is someone like me in an instance like this would NOT spend a single dime. As the OLD guard moves out of the positions that are responsible for these types of business choices and the YOUNGER hipper net connected generations take over.. this business model WILL struggle if not fail. It maybe not tomorrow.. or the next day..

        But aside from that rant.. Ozi.. I REALLY do appreciate the share.. it is a cool concept and execution. - and REALLY I was going to just keep my mouth shut I swear! hahaha
        Thanks for your interaction Paul.

        Sorry some of my response may not be entirely relevant to your specific response but he we go anyway.

        This business is run by a mid sixty year old and it stemmed out of generating printing for his business back in the 80's

        Nearly all of the advertisers use other methods including the internet to generate business.

        Some areas to note with this promotion is in my city alone the publisher has 14 areas.

        Those areas have on average 40 clubs and it is not just aimed at golfers.

        The clubs on the list in my area include a diverse range but the majority would have a bias towards an ageing demographic, retirees and the leisure set.

        From my perspective it is not only the individuals who repeatedly see the score cards every weekend but the committee members who see their club being supported.

        We already picked up a whole group framing display for the annual champions, teams, pennants etc from one club which more than paid for my investment in the promotion.

        The traditional part of my business does have an older demographic and despite their internet use they still are the type that believe in community activities and as such a large percentage regularly meet and it pays to have a reputation amongst those groups.

        Something that is often forgotten is younger people despite having access to all the data and social networks they still talk to their parents and grandparents and in my offline business the word of mouth and reputation built over years is passed along to younger consumers.

        We support that through modern marketing techniques and methods but it helps to have the backstop or "bread and butter" business of the older demographic because they are more predictable and provide stability to the business.

        I'm sure there are opportunities if the owner wanted to add a web aspect to their promotion, but from what I discussed with them they had things set up pretty sweet.

        When I've chatted to the business owner they've shared a lot about the development of the concept and the refinements over the years.

        Initially they set up 38 regions in New South Wales, a State of Australia and that took them around 2 and a half years to get up and running. At the time they were running offset printing business which they wanted more printing work for.

        Now they have a significant business that is simple and profitable to run that suits the owner's lifestyle.

        When discussing websites and other aspects of the structure they explained they had tried various offers over the years but this offer was the refined model that delivered the best results with the easiest promotion and the lowest attrition rate.

        When you look at the advertisers they all tend to be the types that had larger display ads in YP and they also tend to be the older more established business.

        All of them have websites but still don't know where all of their business comes from so they spend their 3-5% of turnover on some form of marketing or another.

        This offer appeals because the advertiser gets something tangible which has exposure.

        Most people are still going to go to Google when they need something and that is when you hope the brand reinforcement from ads like these coupled with the reviews, business listing and adwords is going to help swing that local searcher towards contacting you at the very least for a quote.

        The advertisers would not be there if they didn't appreciate the value they get from participating.

        I think adding other layers of complexity like the web-promo side doesn't appeal to the publisher because they have got their pitch down to a very simple offer.

        If they add website directory etc they largely become just like the other people trying to promote web services.

        They are not offering anything a local business can't understand.

        It is a tangible product. NO BS.

        A strong take it or leave it approach.

        You are buying an ad here. - high quality sample

        The benefits are.

        The cost is this.

        Here's how you are going to pay for it.

        Here's why you will re-sign when I come back next time.

        Thank you. - sign here.

        Bit like the old yellow pages type promotion. No-one wanted to pay for the advert but they knew they need one. The only pitch was how big do you want to go?

        The pitch in this case was you are buying impressions.

        Not one impression but multiples as everyone in any of those club tourneys is coming back to look at how the draw panned out.

        The selling point was these people are getting multiple opportunities to see your ad.

        Best regards,

        Ozi
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  • Profile picture of the author animal44
    What I like: It's a good business model in that the advertisers would be motivated to buy in order to support the club. So (relatively) easy sale for the organiser.

    What I don't like: Poor value for advertisers. I don't see any tracking mechanisms, no coupons, offers, codes, nothing.
    The advertisers are advertising to a group who most likely already know they exist.

    IMHO it would be better to make direct response offers to the club lists with a percentage going to the club. Club members will buy to support the club, advertisers make sales now (and see a measurable result for their money), club gets some money and club members get a good deal. And the person who organises it gets a percentage too. Everyone wins.
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    • Profile picture of the author Ron Lafuddy
      [quote=animal44

      "What I don't like poor value for advertisers"


      But, we don't know that. You are only guessing based on your assumptions.

      I'm thinking Ozi gets introduced and REFERRED, to twenty other local businesses, who will feel obligated to help SUPPORT and REFER other businesses, to their new team member, Ozi.

      The club will also feel that "tug of obligation" toward Ozi. Further solidifying his current relationship with them, while opening the door for future opportunities over the years to come.

      If Ozi has a brilliant idea over the next 2 years, that might benefit his business and the others, too. He will receive a warm welcome and an attentive ear to hear all about it.

      What might that be worth?

      I've read Ozi's posts over the years.

      I'd be surprised if he didn't have some ideas "Formulatin' at this very moment.


      Ron
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      • Profile picture of the author animal44
        Originally Posted by Ron Lafuddy View Post

        But, we don't know that. You are only guessing based on your assumptions.
        Educated assumption I'm so confident that I'd bet a whole bag of jelly beans on it...

        And if you can PROVE that you get results, you'll get far more referrals and people will be far more willing to listen to your ideas in the future...
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        • Profile picture of the author Ron Lafuddy
          Originally Posted by animal44 View Post

          Educated assumption. I'm so confident that I'd bet a whole bag of jelly beans on it...

          And if you can PROVE that you get results, you'll get far more referrals and people will be far more willing to listen to your ideas in the future...
          Here's what we know, based on the OP's post:

          1. The co-op marketing owner relies entirely on referrals to fill the ad spaces.

          2. The ad spaces are full.

          3. Most of the advertisers renew their ad, with the exception of one or two.

          Thus, we can ASSUME that there are PLENTY of REFERRALS, as the available spaces are sold out. And, the advertisers are happy with the results, as the majority renew.

          Over 30 years of successful production qualifies this effort as PROVEN by anybody's standard.

          P. S. You may want to hang on to those jelly beans. They'll add some variety to your diet of ramen noodles.

          Over & Out.

          Ron
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  • Profile picture of the author savidge4
    First of all let me say this... I am very keen on the sales process in the OP. A phone call.. referencing you were referred and SET an APPOINTMENT. Then comes in and does what needs to be done.. Benefit, benefit.. this is what I offer, this is how you pay, and sign here or I am out. I don't think it gets any better than this actually. THIS consistently works and not only works but to a very high degree.

    I would be so bold as to say if it were not for the mention of the referral, you probably would have declined the offer.

    I need to say this as well... I completely understand the nuances of participating, being a member of, and supporting local sports clubs. I literally spend an average persons income every year on memberships to these types of organizations. And I am not only a member in these clubs, but short of being on committees, I am very active.

    I am in no way saying that this ad spend as it pertains to you was a mistake... I KNOW very well it will pay in spades. Im not 100% sure sitting here now, I would personally decline the offer.. but the lack of the more "Modern" element again FOR ME is of great concern. and as you spell this out a bit more in your last post.. it is indeed VERY concerning. <bowing head> I do have to agree with Animal, there is a good amount of poor value here

    The objective of any and every Social club, be it Golf or Rugby or Polo or whatever else is to AQUIRE new members and RETAIN new members. THIS parallels with the objective of business owners, Aquire and Retain new customers. This piece is doing neither for the Parent club and expanding reach of the advertising partners to a degree limited to those that participate in one shape or form in a tournament.

    So getting into the more "modern" concepts... what you bought was BRAND association. You are for the next 2 years tying your brand to the clubs brand.. and this is not such a bad deal. HOWEVER there is no reach outside of the club itself.. and I think we can assume no reach outside of those that participate or happen to be at the club on the days of a tournament.. so if the club has "Social" members, your brand association potentially will never reach those folks. I would venture to say that in the next 2 years it is possible you may never reach your brand and its advertising to 50% of the members.

    I am in NO WAY suggesting that my idea would specifically help in club exposure. But a simple directory with the ability of clubs to list Tournaments and a list of Tournament sponsors ( such as yourself ) could very possibly expand BRAND exposure for both the CLUB, and the supporting business'.

    An ACTIVE club be it socially or sporting events is a desirable club that people would join.. and this simple effort by the card maker would benefit not only the club.. but the sponsors.. and ultimately the card maker.

    I mean lets take this a step further.. the guy is basically sitting on a what $1,000,000 a year business.. he is reaching the end of his working years and the idea of selling the business is probably creeped into his mind. Shleping the country and selling cards is not so appealing to a younger person.. BUT shleping the country, developing an online component with access to some of the finest Sports clubs in AU.. there is a price that would be paid there - just saying

    I would also like to add.... I notice YOUR Ad is the ONLY one with a call to action ( " CALL " ) - Good work! hahaha
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    • Profile picture of the author Oziboomer
      Originally Posted by savidge4 View Post

      First of all let me say this... I am very keen on the sales process in the OP. A phone call.. referencing you were referred and SET an APPOINTMENT. Then comes in and does what needs to be done.. Benefit, benefit.. this is what I offer, this is how you pay, and sign here or I am out. I don't think it gets any better than this actually. THIS consistently works and not only works but to a very high degree.

      I would be so bold as to say if it were not for the mention of the referral, you probably would have declined the offer.

      I do have to agree with Animal, there is a good amount of poor value here

      The objective of any and every Social club, be it Golf or Rugby or Polo or whatever else is to AQUIRE new members and RETAIN new members. THIS parallels with the objective of business owners, Aquire and Retain new customers. This piece is doing neither for the Parent club etc

      I mean lets take this a step further.. the guy is basically sitting on a what $1,000,000 a year business.. he is reaching the end of his working years and the idea of selling the business is probably creeped into his mind. Shleping the country and selling cards is not so appealing to a younger person.. BUT shleping the country, developing an online component with access to some of the finest Sports clubs in AU.. there is a price that would be paid there - just saying

      I would also like to add.... I notice YOUR Ad is the ONLY one with a call to action ( " CALL " ) - Good work! hahaha
      Yes without a referral I wouldn't have taken the call and they would have most likely even been filtered by staff who answer most of the phone calls coming into our business.

      I decided to not make any offer as such in the ad because I didn't want to appear to be running any discount or to clutter up the ad with details that might not get read and acted on anyway.

      I was thinking along the line of a billboard where you only really get a few seconds to make an impression.

      The headline "Looking for a Picture Frame" was one that had worked well in other print media in the past.

      I agree there could be more value added to the deal for both the clubs and the advertisers but perhaps this is a selling point if the owner decides to sell the business.

      I can hear his pitch now. . .

      "I'm getting to old for this but just think what a younger person could do by adding the internet and a directory to the business"

      I'm hoping the presence of my ad gives me a little more leverage when it comes to pitching our services to the clubs themselves particularly in the lead up to their end of season awards. Given the diversity of the clubs it could lead to a regular ongoing boost as each club displays teams photos etc based on their schedules.

      The good thing about having sensible discussions surrounding ideas like these is anyone thinking of using a similar approach can add them or expand on what is working for others.

      Best regards,

      Ozi
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  • Profile picture of the author KIRBYTMC
    The "forest through the trees" : A middleman creates value by win/win/win endeavors.

    enough said.

    Kirby
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