Power In Numbers How to get big-time marketing on a small-time budget

One of the biggest challenges for any new company is buildingcredibility and name recognition in the marketplace. An effectiveway to do just that: Join forces with an established company thathas the visibility you want.

The concept of joint promotions is neither new nor unique-andyou don't have to be a big company to do it. Gus Conrades andBryan Murphy incorporated online automotive parts exchangeWrenchead.com in February 1999. Just six months later, they closeda deal with CBS Corp., exchanging a 22 percent equity stake intheir company for $33 million of advertising, promotion and otherconsideration across CBS' media properties over four years.Wrenchead.com is also the national title sponsor of the UnitedStates Hot Rod Association (USHRA) Monster Jam, as well as otherracing and concert events. Beyond sponsorships, Wrenchead.com usesjoint promotions in other ways; for example, they recently held asweepstakes and gave away a 2000 Chevy Silverado and two SuzukiQuadmaster 4x4 ATVs donated by the manufacturers.

"Through those events, we've garnered visibility on thecorporate level," notes Conrades, 32, CEO of Wrenchead.comInc. in White Plains, New York. That visibility has yielded evenmore business. The company started with just two people; a yearlater, the staff had expanded to nearly 100 employees-growth drivenlargely by joint promotions that linked the small start-up'sname with large, established companies.

You can do it, too, says Conrades. Identify your customers andtheir activities, and then look for entertainment groups orbusinesses that are already reaching them and devise a way to joinforces. Since Wrenchead.com customers constitute a demographicgroup that goes to car, truck and motorcycle races and concerts,Conrades found ways to sponsor such events.

Conrades approached CBS differently. Rather than making aspecific proposal, he went in with a summary of his business and adescription of his market. He pointed out that CBS was reaching themarket in several ways, and suggested the two companies explore thepossibility of a mutually beneficial relationship. "Ididn't want to assume I knew what their strategy was," hesays. "If you write a proposal, you're boxing yourselfinto a scenario, and if that proposal doesn't fit theirstrategy, you've wasted the one shot you had withthem."

While Conrades has given up some equity in the company as partof his joint promotion deals, he says it's worth it. "Ifyou look at the use of equity at our stage of development, it'sa very inexpensive [way] to achieve a very high level of visibilityin the marketplace," he explains.

Not every joint promotion requires equity or even cash. You mayconsider bartering, which is what Conrades did when he convincedvehicle manufacturers to donate their products for hissweepstakes.
Don't be afraid to go after deals with giant corporations.Conrades suggests approaching their business development vicepresident or chief financial officer to explore a potentialrelationship. If you do your homework and have a common market,you'll probably be able to reach an agreement that benefits youboth.