A cooperative venture

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Can four agencies in the same state pool their resources and pull in clients by advertising together? Yes, according to Gerry Jung, co-owner of New Berlin, Wis.-based Vacations Plus, who has been in charge of the marketing co-op Leisure Escapes Travel group (Let's Go) for about a year-and-a-half.

G. JUNG.Let's Go has run newspaper, television and radio ads that mention all four of the Wisconsin agencies: Vacation Plus, Classic Travel in Menomonee Falls, Elm Grove Travel in Elm Grove and Sunshine Holidays in Waukesha. "The theory was to find agencies that have the same shared vision and pool economic resources to be much more aggressive in advertising and marketing," Jung said.

In order to handle competition between the agencies, the group has had to keep a careful balance. On the one hand, it was important to find shops that were focused on selling "the same types of products to the same kind of customers," so they could all benefit from the same ads, Jung said.

But it was just as important to find agencies that were geographically distant enough so they do not compete yet were all served by the same mass media, including the Milwaukee Journal/Sentinel, which has statewide distribution. Such a concept could probably only work in what Jung called "second-tier cities" such as Milwaukee, St. Louis or Kansas City, Mo., not in larger markets where the media are more diverse.

In trying to find a balance, in fact, the group has made some mistakes. After being part of a Milwaukee Journal/Sentinel ad, one group member realized that the paper that really served his clients was the Chicago Tribune -- and left the group.

Let's Go works with suppliers to develop ads; Jung usually writes the copy and has newspaper artists do the layout. Besides advertising together, Let's Go plans to organize customer focus groups from all four agencies, asking them what kind of advertising gets their attention.

Although the group is not a traditional consortium because there are no official supplier override programs in place, Let's Go is "looking at expanding the concept" perhaps to something closer to a full-fledged industry consortium. Stay tuned.

How to form a marketing co-op

If you are intrigued by the above story on Let's Go, the ad/marketing co-op, and want to develop one of your own, here are some suggestions from the group's founder, Gerry Jung, owner of Vacations Plus in New Berlin, Wis.:

  • Jung developed the list of group members through his personal contacts, approaching agencies that "wanted to do more marketing but didn't have the resources or time to do a major ad campaign themselves and were looking for a way to finance it."
  • Now entry into the group is by invitation only, and those who were the first members have retained veto power regarding new members, "which was one way to keep issues of competition down" -- if members felt a prospect was too close to them, they could veto its membership.

  • Focus on agencies reachable through the same media that sell at least similar products and are firmly committed to the concept.
  • "The biggest mistake is to have a group that's too large," said Jung. He thinks the ideal number is "no more than six -- a manageable amount of members who can communicate with each other easily."
  • Develop a detailed, full-year marketing plan for the members of the group that you can present to suppliers when asking them for co-op ad dollars.
  • Pep talk

    L. HIRLEMAN.Are you taking enough advantage of educational industry events ? Many agents are not. I've been talking to the heads of various agency groups who complain that their members have not been attending conventions because they don't want to spend money and take the time away from their agencies.

    But I disagree.The old adage that you must spend money to make money has never been truer. I'm writing this column after attending a three-day conference sponsored by TravelAge West in Las Vegas. For me, the networking was invaluable. I was on a panel on agent survival; I networked with my panel members and got three great marketing ideas that never would have occurred to me otherwise. (I can't pass them on to you because they involve special arrangements with some suppliers.)

    At the Giants conference in Las Vegas last October, I attended a seminar where I learned a tip I've been using ever since: If you have a decent database system, you can immediately contact your clients who want to take advantage of last-minute deals.

    And I'll pass on to you some of what I said at the TravelAge West show. I've been contacted by many agents who say, "If we start fees tomorrow, that will be the answer to my problems." Not true! Fees are only one component of the answer. They can't replace all your lost revenue, since there's a limit to how much you can charge clients.

    You must find other ways to make a profit, such as selling travel insurance and working with consolidators. Also, when charging fees, strive for profit (within reason, of course). If you lose $10, you can charge $11, so you're making something on the deal.

    Lucy Hirleman, CTC, MCC, owns Berkshire Travel in Newfoundland, N.J. Contact Lucy via e-mail at [email protected]; fax: (973) 208-1204.

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