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The Alternative Board Blog

How to cross-promote the business and stay profitable

Dec. 3, 2012 | Posted by The Alternative Board
300px-Hostess-Twinkies

At this point, you’re probably tired of reading blogs about sugary snack rolls. If you humor me by reading this last one, I promise to keep it short, and I promise that this will be the last time that I mention Twinkies in a blog.

English: Hostess Twinkies.

Yellow snack cake with cream filling. When Hostess closed, a lot of people said that the high-calorie treats were no longer marketable in today’s health concussions society. Reading that, I thought that this couldn’t be right. No matter how many snack food companies bake their chips, there will always be a market for old fashioned Lays. Also, Hostess did try to adapt; you may remember the ill-received 100 calorie bites shopped by the company in recent years. I’ve been racking my brain for a company that is finding success selling a high-calorie product, and for the most part, I’ve been drawing a blank.

Yesterday, I stumbled upon this article in Forbes. The article is a profile of Kat Cole, a former vice president of Hooters who is currently the president of sweet treat manufacturer Cinnabon. Ms. Cole doesn’t have the background you'd expect for the president of a major company, she is a college dropout and started her career as a hostess at Hooters. The profile is an enlightening portrait of how someone without a traditional business background can thrive in business. It also shows how a business shopping edible guilty pleasures can thrive in a health-crazed society. To make sure we are on the same page, I am talking about the Cinnabon that sells giant sweet buns from kiosks in malls and airports. These sweet buns have between 700 and 1100 calories a pop and are marketed as treats, not entire meals. I can’t find these news stories, but about 15 years ago, Cinnabon released their nutritional information, and everyone was completely certain that the company would go bankrupt. Convincing consumers to blow half of their allotted daily caloric intake on a snack is no short order. But, against all odds, it is an order that Cinnabon was able to fill. The company has not only been able to stay in business, but they are also positively thriving. Over the next few years, the company is remodeling all of their stores, and this year, they are poised to hit one billion dollars in revenue.

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How has the company achieved this remarkable success?

The simple answer is cross promotion. Cinnabon and Pillsbury currently sell a bake at home version of their branded cinnamon spirals in the refrigerated spoon-pop-cylinder section of your grocery store. Cinnabon also offers smaller versions of their famous rolls at Burger King and Taco Bell. These cross-promotional ideas are genius, and not especially complicated. Every time I see a Cinnabon stand in the mall, I think about how delicious the rolled treat would be, then I think about how many calories are in the rolls. I never buy Cinnabons, because I can’t afford to wreak that kind of havoc on my expanding belly. 

When I see a Cinnabon in a grocery store, I go through a thought process that is almost exactly the same, but I tack on an amendment. At the end of the thought process, I think to myself wait, these rolls are refrigerated, maybe I’ll run a marathon in the next month, then I’ll be able to have a guilt-free Cinnabon gorging session. I don’t know when the last time I purchased a Cinnabon at a kiosk was, but I know that it has been more than a decade. I am a little embarrassed to tell you that I have purchased Cinnabon's bake your own version. In fact, I purchase these treats frequently. I had no idea that they sold Cinnabons at Burger King and Taco Bell, but if I find myself to dinning at either of those eateries, I will be very proud if I can limit my consumption to half a dozen, or even a dozen minis.

When it's boiled down, we get a classic tale of two similar companies. Hostess stuck to their business model, even as it became obsolete, and is declaring bankruptcy. Cinnabon embraced the guilty pleasure aspect of their brand, pursued some brilliant, and painfully obvious cross-promotional opportunities, and is on track for a billion dollars in revenue this year.

Take a lesson from Cinnabon: Your business can benefit from working with companies that you're not competing with. And with the right kind of cross-promotion, the sky is truly the limit. Find the right relationship, and your yearly revenue could hit the billion dollar mark... Business collaboration advice? Chime in on Facebook.

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Written by The Alternative Board

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