Partnership Marketing

The DMA Insert Media Council

2nd Annual Insert Media DayRye, NY

September 9, 2004

Panelists introduction here

Jill Eastman Vidal, – Director, Third Party Marketing, 1-800-Flowers.com, Inc.

Milton Pappas, – Vice President, Partnership Marketing, Redcats USA

Alissa Pomerantz, – Assistant Director, Partnership Marketing, Bookspan

Joe Seta, – President, Seta Corporation

Thomas Shipley, – President, BrandSeed

What defines 3rd Party Marketing (a.k.a. Syndication)

A quick definition:

– Syndication is the practice of endorsing another company’s offer (of goods or services), allowing that offer to be marketed into your file and generating a commission on the sale.

Why?

Open up/test new product categories without marketing and inventory risks

Extend your brand beyond your core product line to your customer base

Monetize marketing and distribution channels Generate incremental income – all to the

bottom line!

How to get started!

Define Marketing Strategy– Who is your customer?

Identify important customer demographics

– What offerings might be of interest to your customer?

– Does product relevance matter?

Marketing Strategy

Customer Research Attitudinal and Usage Studies

– Qualitative and Quantitative Analysis

Surveying– Online and telephonic customer engagement

Marketing Strategy

Category Analysis of Potential Partners

Determine what companies you want to work with – the Proactive Approach!

– Identification of similar customer demographics

– How close to your product category are you willing to be?

Marketing Strategy

What channels will you put to work for you and your partners?

– Traditional real estate includes: Direct Marketing Solo Mailings Catalog Marketing Package Inserts Blow-In/Bind-In Credit Card Statements and Statement Messaging Order Confirmation Page Programs Order Confirmation Email communications Upselling (both phone and web)

Putting your strategy into action!

Deal Negotiations– Understanding the types of deals you can create

by channel and all related components Name Ownership Merge/Purge Priority ALL real costs – especially with Insert Media

– Blow-In/Bind-In costs– Package Insert collation/freight

Structuring your deals…

Compensation Structures – Case Studies Revenue Share Upfront Bounty (CPA) Hybrid Arrangement Straight CPM Customized/Wholesale Deal Exchange of Space or Impressions

Sample Insert Media P&L

3rd Party Insert: XYZ Blow-InCirculation: 1,000,000

Income:Average Order Value 145$ Projected Response Rate 0.20%Projected Responders 2,000 Total Sales 290,000$ Commission as % of Net sales 15%Total Projected Commission Income: 43,500$

Expenses/Total Costs:Split per list per M 0.75$ 750$ Demographic charge per M 2.50$ 2,500$ Makeready -- flat fee 100.00$ 100$ Run charge per M 5.00$ 5,000$ Extra Postage Costs N/A -$ Management Commission (% of Sales) 1% 2,900$ Total expenses 11,250$

NET 32,250$

GROSS REVENUE TO PARTNER (before COGS) 257,750$

What else to prepare?

Develop Budget and forecasting by program/channel

Build Schedule– Due dates by channel– Contact Management by channel

Outline Sales Efforts

Developing Relationships…

Create the tools you need to make the first contact.

Could include:– Presentation on your company or offering– Brochures– Contract/Non Disclosure Agreement (NDA)

Internal Support Considerations

Legal

Finance

Information Technology

Customer Service

Marketing

Legal Considerations

NDA v. real “contract”

Use of contract as a Sales Tools– Defining what matters

Other considerations –what you can include:– Merge Purge Priority– FTC and Privacy regulations– “Proof of Enrollment” for club membership offerings

Financial Considerations

Internal Allocations – costs and income by channel

Resources and Tracking Mechanism – To create budget to track actuals

IT Considerations

Proprietary Card implications– Adding an additional method of payment

Website Interface

Customer Service Considerations

Simple Redirection– Toll-Free # for redirect– Hours of Operations– Training efforts:

Regular Sample Distribution to your facilities for partner recognition

Mature effort might also include:– Assignment of key person in each facility to be your 3rd

Party “expert”– Product Fairs

Marketing Considerations

Use of Broker/Manager Marketing Services

– List Fulfillment– Program execution/support

Print and Production Coordination Creative Review Tracking/Response Analysis –

– By Partner– By Program/Channel

Credit Marketing – how important is proprietary credit?

Creative Considerations

Creative matters! Endorsement and placement Formats Include ALL terms and conditions – no

customer confusion

The Checklist:

1) Identify customer base and what offers interest them

2) Analyze potential partner base3) Determine what marketing channels you will

put to use4) Develop P&Ls (by channel)5) Create realistic budget for your program

Checklist continued…

6) Create tracking/reporting7) Compose contract8) Develop sales tools9) Lay foundations for internal support10) Start building relationships!

Recommendations from the experts!

Alissa Joe Tom Milton Jill

Questions?

THANK YOU!

For a copy of this presentation…..