Lewis S. Jacobus took over his parents’ ailing home-decor business two years ago intent on turning it around by rebranding it as a retailer of game-room products, such as pool tables and dart boards. But he had virtually no money to spend on advertising the shop’s new image.

So Mr. Jacobus began searching Facebook for nearby retailers to see if any would be willing to promote his store for free in exchange for him doing the same. The strategy quickly paid off.

Mr. Jacobus connected with the owner of a Christmas-tree business about 25 miles away. He says they agreed to place sample products and advertising materials in each other’s shops, including coupons specifically drawn up for the partnership. Over the next few weeks, he says both businesses generated sales as a direct result.

“Working together is a way to get your name out there,” says Mr. Jacobus, 27 years old, who became an entrepreneur to save his parents’ 30-year-old New Hampton, N.Y., business, now called Hudson Valley Game Rooms, after his father developed cancer.

One way to grow your small business on a limited marketing budget is to team up with other small businesses that target the same types of customers—but aren’t your direct competitors—and promote each other’s products or services.

The tactic typically requires a lot of networking and relationship-building, which can take time and may not always pan out. But entrepreneurs who have engaged in the practice say it can work and that it beats spending hundreds or thousands of dollars on traditional marketing efforts, like TV, newspaper or radio ads.

“This is the old barter system,” says Bruce I. Newman, a marketing professor at DePaul University in Chicago. “What’s the cost? A phone call.”

Mr. Newman recommends pursuing partnerships with companies that sell complementary goods or services and keeping tabs on your progress to see how effective it is. “Build a database once you start doing this so it can be tracked, measured and monitored over time,” he says.

Sheryl Connelly of Louisville, Ky., has literally gone door to door asking the owners of nearby businesses if they would be interested in doing cross-marketing with her start-up, Marketing Media Management, a provider of social-media services. She also has approached prospective partners through LinkedIn.com and at networking events.

But she says she doesn’t actually mention anything about a possible partnership upfront. Rather, she tries to get to know the entrepreneurs she targets to be sure they’re a good match.

“You’re gathering information,” says Ms. Connelly, who started her business after getting laid off from a sales job in 2009. “You need to be comfortable. It’s about your credibility.”

To date, the 40-year-old entrepreneur says she’s developed six partnerships that entail swapping customer referrals. For example, one partner is the owner of a computer-repair business and their agreement is such that if any of her clients mention having computer trouble, she recommends they call that partner.

Likewise, if any of the partner’s customers indicate that they use social media for marketing, the partner will recommend Ms. Connelly’s firm for support in that area.

“I went from one lead a week to about 10,” says Ms. Connelly. “And they’re solid leads. You’re riding on their credibility, which speaks volumes.”

Of course, not every attempt to strike up a partnership is likely to work out. Mary Tamargo, owner of Nocube, a digital-marketing start-up in Rochester, N.Y., says there were a handful of times when entrepreneurs she hoped to team up with either turned her down or didn’t follow through on their end.

But since becoming her own boss in late 2010, just prior to getting a pink slip from a health-care company, Ms. Tamargo, 36, says she has managed to drum up lasting partnerships with three consultants whose clients are mostly small pharmacies—also her target market.

Partnerships don’t necessarily need to involve exchanging the same kind of support. Entrepreneurs can scratch each other’s backs so to speak by agreeing to assist one another in ways that make the most sense for them.

Sara Marshall of Jersey City, N.J., says she learned of a creative product-display technique from an entrepreneur she met last spring at a farmer’s market. In return, she introduced her peer to a retail store that now carries that woman’s cookies and breads.

Ms. Marshall has been selling her own brand of salsa under the name Saucy Sara’s Salsa since getting laid off from a communications job in 2009. She says the partnership she has works in large part because she and her peer are in the same market and have similar goals.

“Everyone’s having a hard time because of the economy,” says Ms. Marshall, 46. “Everyone wants to succeed.”

“Sheryl is an expert regarding social media. She quickly grasps what you are trying to accomplish and identified ways to achieve your goals using social media and traditional marketing techniques. Her efforts create measurable results. Sheryl’s approach is far beyond simply creating buzz for your business.”

“I met Sheryl at a networking meeting and immediately knew she would be an asset to my new business. Among the many hurdles I would need to overcome, a marketing plan was the one that scared me most. With no marketing experience under my belt, I’d made several costly mistakes and needed a professional consultant to create a solid plan with implementation steps that I could achieve on my own. Sheryl nailed it. She took the time to understand my business thoroughly, and created a plan of action that literally takes just a couple of hours a week to implement. ‘Work smarter, not harder’ is her mantra … I’m very glad to know Sheryl and would hire her again without hesitation. Amy Holley, owner at HolleyWrap” September 9, 2011

Republished with permission from Online Marketing Pros Blog

After spending a great deal of effort on competitive intelligence and research this week, we’ve noticed an interesting trend. Most of the  conversations, research, presentations, and case studies are focused entirely on large corporations. I think it’s great that Forrester, Forbes, and others want to offer free webinars and seminars about how to use social media, but their suggestions and tools to use for ROI measurement were way out of reach for the solopreneur and small business owner.

We wanted to cry from the rooftops, “Is anybody paying attention to the little guys?” OK, so WE are, but is anyone else?

The economy has grabbed small business marketing budgets by the throat. Many are struggling to make ends meet, much less put more effort into their marketing efforts. Bootstrapping  is now the norm, rather than the exception, so they are grasping at social media hoping it will be the answer to all their marketing problems. As Facebook changes their platform and SEO gets more complicated, small businesses wonder if they are going to be crowded out by the big chains and big marketing budgets.

We are here to say absolutely, positively, “NO!” Even micro-businesses can embrace the social web.  Local businesses have a unique opportunity to edge out the BIG BUSINESS competition through social media for these three reasons:

You’re LOCAL darn it!

Social media’s greatest advantage is when it is targeted and local. 97% of local consumers are searching for businesses before they even leave the driveway. Google and other major search engines tailor the user experience toward local businesses. Most consumers could care less about a tweet from a national brand, but they ARE interested to relating to a local shop owner in a personal way.

For instance, let’s say you aren’t a fan of Olive Garden on Facebook, but you are a friend of Paula and Anthony Hunter, the owners of The Black Italian here in Louisville.  Although their shop is several miles from our homes, we go out of our way to support their small business entirely because of our personal Facebook connection. Remember the phrase – It isn’t WHAT you know, it’s WHO you know that matters? That’s how business works!

It’s Business AND It’s Personal

We engaged The Black Italian to cater our upcoming Professional Networking and Anniversary Celebration. When Paula found out it was a FREE event, she called and asked us how she could help spread the word and promote Online Marketing Pros. Did Paula have to promote us through her personal and professional network? Nope. But she and Anthony just won a couple of customers for life.

Even though companies like Applebees, Buffalo Wild Wings, and Baskin Robbins could fill a football field 15 times over with their Facebook fans, they can never match the connection and loyalty a local business owner can drive with its customers. It’s not just about daily deals, specials and sales. It’s about genuinely caring about your connections whether they are online or offline.

Yes, Virginia, there IS ROI in social media

Large businesses tend to just add social media to their advertising campaign because they understand that being online, it can be measured and quantified. When you get a moment, take a look at this video about a small bakery’s use of Facebook.  The short list of benefits derived from social media are:

• Increased customer loyalty and visits to the storefront

While small businesses may not dominate the spotlight in the blogosphere, there is no question there is an unlimited opportunity on social media for this often neglected, yet critical segment of the economy.

Are you a local business using social media successfully? Tell us about your experience!

Want to learn more about how to get started or improve your small business local search or social media presence?  Online Marketing Pros is here to help with online marketing and social media marketing classes designed for the busy solopreneur, consultant, or professional.

“Sheryl has been a joy to work with and a gift from above. Her knowledge of marketing and social media have given me insight into the direction(s) I should go with my business. She is creative, enthusiastic, and willing to go the distance to assist her clients in reaching their goals. I’m very pleased with my marketing plan and know continued work with her will add to my success. Thanks, Sheryl!” September 8, 2011

“Sheryl’s company has provided me with a variety of services and training that have accompanied the social media (i.e. FaceBook) and SEO (i.e. article writing) efforts for my web businesses. We have used her services every month since early in 2010 and have continued to do so, which speaks for itself. Sheryl will go the extra mile to make sure a customer is satisfied.” September 10, 2011

“Sheryl really knows social media marketing inside and out. She was able to get things setup and start gaining traction for my client in a fairly short amount of time, and at a very reasonable cost. She’s pleasant to work with – very friendly, but also very professional. Sheryl is not only quite creative, but she’s able to articulate her ideas in a way that is easily understandable by the social media-challenged. I look forward to working with her on more projects.” August 4, 2011