Are you looking for a way to get the most out of your next reciprocal advertising deal? If so, I may be able to help. I spent many years over the course of my career in the hospitality and advertising industries negotiating such contracts. As such, I learned a few things in the process. Here’s a quick look at five of them:
Keep it Equal
First, seek to obtain an equal dollar-for-dollar trade based on retail price. Accepting anything less devalues your establishment’s offerings and puts you in a position to be taken advantage of. In other words, treat the exchange as if you are doing business with any other individual or group. Don’t let the size or prestige level of the other party throw you. Remember, they are doing business with you because they find value in what your business offers. Thus, you need to value what your business has to offer as well.
Inexpensive and Perishable
Second, try and trade whichever costs you the least and is the most perishable. Of course what those things are will vary based on what goods and services your business provides. For instance, when I was worked in the hotel and restaurant industry, those two things were rooms and breakfast. When I worked for a dinner theatre, the least expensive items were tickets to a matinee performance. As such, I traded those items for advertising.
Give Them the Shoulder
Third, all reciprocal advertising exchanges should ideally be arranged to occur when your business needs it most. Otherwise, you are apt to lose money in the short term. Therefore, don’t forget to include a provision that allows you to utilize blackout periods. For example, when I would negotiate contracts for lodging establishments, I would exchange room vouchers for dates that fell within the hotel’s shoulder and valley periods. I chose those dates because it was unlikely that the hotel’s occupancy would be at full capacity during those periods.
Fourth, consider negotiating the deal so that half of the bill is media exchange and other half is cash. Doing so allows you keep the cash flowing, which is important too. After all, advertising is designed to provide information to a company’s target market and it doesn’t always work. Plus, you can’t pay your company’s overhead costs with media vouchers.
Fifth, make sure that the debt can’t be transferred. Otherwise, you may find yourself beholden to someone or something that you find objectionable and ineffective. For example, let’s pretend that you own a rock-n-roll themed restaurant and arrange a reciprocal advertising deal with a rock-n-roll radio station. Sometime during the contract, the radio station changes hands and formats. As such, its listenership changes too. If those new listeners are not part of your target audience, you just lost your investment.
Source: Personal Experience
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