Operations

Let’s Make a Deal: Swapping to Save Costs

Posted on February 2, 2010 by Thi Dao

LOS ANGELES Econation, an all-green chauffeured transportation service, recently completed an event trade with a major radio station, bartering a significant service discount for free tickets and advertising credit.

"You can give away a small amount to get a major impact to a targeted audience if you're smart," says Ben Bloch, managing partner of the Los Angeles-based company, a 2010 LCT Operator of the Year finalist.

One of the main points to remember in bartering, says Bloch, is figuring out what you want and what you think will work. Tickets and passes to special events may not sound like something a company would traditionally request, but these perks distributed to employees and clients can boost morale and improve relationships. In addition, it's important to go after the right market and target a specific person. Econation's primary target is eco-conscious clients, but with the abundance of green events in the Los Angeles area, Bloch says they have to be picky about which ones to work with.

"We try not to do any broad events," Bloch says. "We've narrowed down which events we think are the best and what we expect to get out of them."

A trade for introductions or referrals can lead to results more targeted than advertising. "There are some things that work better than just having your logo on something, or an advertisement in something," he says.

"We'll say, 'listen, we're very happy to give you credit toward service if you specifically refer us to people or send out an email introducing us to people," he says. This usually applies to organizations or people requesting complimentary service.

When trading, it's always best to remember cost. "We know generally what our costs are, so we know where we're starting to lose money," Bloch says. So Econation looks at how heavy its usage is expected to be on a particular day and the projected cost.

"You want to try to get your costs covered," Bloch says. "It should be a win-win deal."

Stay on Top While Bartering

1. Making Deals
Figure out what you want in advance and be sure to make deals with a very targeted group or event.

2. Who Can Help You?
Target the corporate executive, the travel manager, the sustainability advisor, or someone who can influence future business. Don't sponsor broad events just because they're green.

3. A Starting Point
When organizations or event coordinators call asking for a donation or free service to something the company doesn't normally donate to, use that as a starting point for barter.

4. Email Blasts
Email blasts on behalf of your company are an easy trade, and usually free for them. The result is a referral out to a targeted group of people, often better than having a name or logo printed somewhere.

5. Showing Appreciation
Give away something attained by trade to your clients or employees as a nice gesture. Unbeatable seats at a concert, obtained through barter, are one way to show appreciation to employees and existing and potential clients.

6. Value of A Trade
Keep costs in sight. Econation has minimum and maximum rates they adhere to. Bloch runs through the dates of a potential trade with vice president Joel Stein, who then makes an educated decision about the value of a trade and whether it's doable.

7. Calculated Risk
Bloch warns that bartering entails a calculated risk. "We don't have the perspective that if we give away a bunch of free cars, all those customers will use us again. On the other hand, sometimes it does happen."

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