Everyone agrees that “word of mouth” is the best advertising. Everyone knows the power in one person telling another about a service or a product. The problem is that casual referrals usually don’t create a phenomenally successful business. To generate a massive number of referrals, you need a phenomenal referral marketing system.
The second biggest marketing mistake small business owners make is what we call “chasing suspects.” We’ve all been there. We chase people we think might be good prospects for us, trying to convince them of that, and we spend a massive amount of time and energy chasing them and nothing ever comes from it.
Of course, the “the fortune is in the follow up,” but who you follow up with is very important. We should have a follow-up system for those who are truly prospects. A suspect is someone who fits the demographic. A prospect is someone who has actually asked for more information.
The Secret to Record Sales and Profits
Our experience of coaching thousands of small business owners tells us that most small business owners are missing out on a very big secret. This is how we have built our companies and how small businesses worldwide are having record sales and profits.
The secret is this: Instead of chasing suspects and spending so much time following up with individual prospects, invest your time building relationships with powerful referral sources.
What we mean by a referral source is a company or professional that has a relationship with an unlimited supply of your perfect niche client.
For example, if you are a CPA and you get referrals from attorneys, then your referral source would be law firms. Invest your time building relationships with attorneys who can refer an unlimited supply of your perfect niche client.
Here are 29 practical examples of joint venture relationships and partnerships.
(A): Reciprocal Arrangements:
1. Exchanging Brochures: This can be especially lucrative for storefront-types of business. Arrange for you and your partner to place each other’s brochures on counter-tops, in shopping bags, in mailings, with billing receipts and so on.
2. Exchanging Leads: Check to make sure that this is legal and ethical in accordance with their “opt-in” terms, online or offline. If you’re unsure, don’t exchange leads, but rather arrange an endorsement instead. Wherever possible, set up some sort of “opt-in” co-registration as opposed to simply using someone else’s “list”.
3. Exchanging Online Links: Driving traffic to eachother’s sites can often create additional business for practically no effort at all.
4. Cross-Endorsement: Whether through mailings (solo ads), product reviews or simply “referring customers” casually, cross endorsement still remains a very powerful way to leverage the day-to-day contact another business has with your market.
5. Bonus / Loyalty Endorsements: Reward your customers by providing them with some sort of “special deal” from your JV partner, have your partner reciprocate something similar on their end…
6. Trading Services: You can simply trade one service/product for another, for example, a hot tub retailer “paying” a construction firm with a new hot tub instead of cash for building renovations.
7. Trade Testimonials: Review each other’s products, then display the reviews on your marketing materials.
(B): Integrated/Co-Managed Arrangements:
8. Sharing Ad-Space: Cut your marketing expenses in half by sharing ad-space or promotional events. (This includes sharing trade-show space).
9. Sharing Office-Space: Do your services compliment each other? Would your customers naturally buy your partners products as an addition to yours? Perhaps sharing space would help both of you to save on overhead expenses.
10. Sharing Research & Development Information: If your JV partner is someone that you trust – and they’re not a “competitor” – then combining “intellectual assets” can provide astounding results in some cases.
11. Co-Producing Articles and Press Releases: Leverage each other’s contacts in regards to other JV prospects, editors, columnists, freelance writers and otherwise media contacts. Create a series of PR’s and Articles that provide neutral mentions for each of your services in some way…
12. Co-Producing Publications: Such as websites, magazines, trade journals and so on.
13. Co-Producing Products and Projects: Sharing costs and effort on product research, creation and testing could very well outweigh the “cost” of sharing profits.
14. Co-Hosting Events and Seminars: Such as industry focus groups, info seminars, courses and consulting presentations.
15. Joint Authorship: Save time and reach twice as much of the market (or more).
16. Product Bundling: Integrating products, or adding JV products as an upsell or “option” is an extremely powerful way to leverage the assets of another business in a truly beneficial manner.
17. Not-for-Profit Associations: While many NPA’s and similar organizations, such as charitable groups and state bars (legal), do have “partner programs” and “corporate sponsors”, often times it’s more effective to ally one’s business with them in a unique way. For example, providing exclusive services for their members, donating gifts to give away and perhaps helping their operation by way of consultation and other assets.
18. Ally “For a Cause”: Joining forces with a “cause”-related group can often be extremely lucrative in terms of free exposure and goodwill. However, this can potentially be very detrimental if the “cause” is too extreme or misrepresented. Use caution.
19. Co-Producing Incentives: Co-create a coupon directory or a similar database of “special offers” that your market would appreciate.
20. Co-promoting viral marketing items: Such as compelling mini-courses, ebooks, audio interviews and so on. This especially applies to info-products and downloadable online media.
21. Shared Investments: Sharing costs of buying assets and investments. (Take extreme caution)
22. Shared Venture Capital: In some cases, it may be easier to get funding for a joint-project or a “larger operation” from funding groups and investors. (Take extreme caution).
23. Expert Services in Exchange for % of Profits/Revenues: Such as engineering, programming, consulting, designing or construction – instead of charging per “job”, the technician will earn a residual (ongoing) income.
(C): Endorsements and Promotional Arrangements:
24. Direct Endorsement: This includes endorsement mailings to client/prospect databases, mass notifications or ezine announcements – in exchange for a large portion of up-front profits (sometimes backend as well).
25. Ongoing Endorsement (Affiliate): This involves direct and indirect referrals in return for a commission on any resulting sales processed. This is done both offline (as a “rep”), or online as an “affiliate”.
26. Marketing or Promotion in Exchange for % of Profits/Revenues: Consultants often arrange a share of revenue generated instead (or in addition) of consulting fees.
27. Indirect Endorsement: For an example, an author that mentions a company in his/her book may arrange to collect referrals based on trackable sales from that mention.
28. Paid Endorsement: This includes endorsing a product as an affiliate through classified ads, pay-per-click ads and other forms of advertising. (Note: Ensure that your ad copy will produce sales before investing in advertising).
29. Product Reviews: Reviewing a product “objectively” can be very powerful in terms of generating sales from prospective buyers that are researching their purchase (or looking to justify it). The reviewer will act as an affiliate and get paid for referred sales.
These are only a few examples of JV partnerships in comparison to what is truly possible, even for your business. To go from“Small Business Mediocrity to Millions” you must be creative, and purposely think about how you can reach more customers, grow your profits and benefit someone else in the industry by partnering with a complimentary business.
What are some sources you may be overlooking?
Consider this…A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares.
In European law, the term ‘joint-venture’ (or joint undertaking) is an elusive legal concept, better defined under the rules of company law. In France, the term ‘joint venture’ is variously translated as ‘association d’entreprises’, ‘entreprise conjointe’, ‘coentreprise’ or ‘entreprise commune’. But generally, the term societe anonyme loosely covers all foreign collaborations. In Germany, ‘joint venture’ is better represented as a ‘combination of companies’ (Konzern).
With individuals, when two or more persons come together to form a temporary partnershipfor the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are “co-venturers“.
The venture can be for one specific project only – when the JV is referred to more correctly as a consortium (as the building of the Channel Tunnel) – or a continuing business relationship. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements, franchise and brand use agreements, management contracts, rental agreements, for one-time contracts. The JV is dissolved when that goal is reached.
A joint venture takes place when two parties come together to take on one project. In a joint venture, both parties are equally invested in the project in terms of money, time, and effort to build on the original concept. While joint ventures are generally small projects, major corporations also use this method in order to diversify. A joint venture can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. Since the cost of starting new projects is generally high, a joint venture allows both parties to share the burden of the project, as well as the resulting profits.
Since money is involved in a joint venture, it is necessary to have a strategic plan in place. In short, both parties must be committed to focusing on the future of the partnership, rather than just the immediate returns. Ultimately, short term and long term successes are both important. In order to achieve this success, honesty, integrity, and communication within the joint venture are necessary.