The key to joint venture partnerships is that you are capitalizing on someone else’s leverage. This leverage could be money, customers, opt-in lists, marketing muscle, credibility, quality products, or influence.
Joint ventures and strategic alliances are successful because each partner takes advantage of the other’s leverage in order to bring some sort of gain. That gain could be profit, publicity, a new product, a better product, etc. Joint venture marketing is one of the most creative parts of your marketing strategy as there really is no one way to do it. And there are undoubtedly joint venture models which have never been used before.
Here are some examples of different joint venture partnerships. You have a new product and you are looking for a way to promote it. You approach a webmaster or business that has a large list of quality subscribers or customers. Ezine and newsletter publishers make wonderful partners in this type of joint venture.
This is how it works: They would provide a personalized endorsement of your product or service in exchange for a handsome commission. If you are running an affiliate program, I would recommend offering a joint venture partner a larger commission then a normal affiliate. The reason is that most of your affiliates are looking for a product to promote. They are a lot easier to get on board.
However, your ideal JV partners don’t necessarily need your product to be successful and are probably not necessarily looking to promote something. Because of this you have to give them a good reason.
An endorsement is not a sales letter. It is a very personal recommendation, from one person to another. You should always offer to write the endorsement for your partner, and let them customize it however they see fit. A successful endorsement should always come across as though your partner was doing his or her client’s a favor. Your partner is taking the time to make their lives better. And people respond to this kind of giving.
No matter who your JV partner is, everyone is always interested in building a better relationship with his or her clients. If you are offering a quality product or service, a product or service that your partner’s customers will appreciate, they will in turn give their gratitude towards your partner, which means he or she will have a better time selling other things to his customers in the future.
Capitalize on your partner’s desire to look good to her subscribers by offering something unique of yours to give away for free. Make it special. It shouldn’t be something that everybody can go and get on your website.
Another advantage to these JV relationships is that it is great publicity for you amongst your business peers. Any good publicity means leverage. Some other business might approach you with their own JV idea just because they’ve seen you partner with another business.
Creating good JV partnerships can give you an edge on your competition, even if your competition is well established and successful in their own ventures, and even if your business is relatively new.
The other obvious advantage to gaining these new customers and leads is that you are capturing their information to keep in contact with them later. This means that when you have something else to offer, you have a larger customer base to offer it to.
You can use these partnerships as a free way to test your product. If your JV partners are successful in their endorsement, you know that you are on the right track. However, if your JV partners are not successful, you know that you have to reevaluate what you offer and find how to fix the problem.
If you create successful partnerships with respected businesses, you can have them write you glowing testimonials. These kind of testimonials are great because they leverage your partner’s reputation has will help convince new customers that you are offering a quality product or service.
Another type of JV relationship is aimed mostly at list building. Let’s say you say you sell plant seeds again. If you partner with a company that sells fertilizer, or books on planting, or anything else where the customer base is similar, you give that business something of yours to give away for free. In exchange they give something of theirs to you that you can give away for free.
People love getting free stuff, and if you are the one giving away free stuff, your potential customers might very well choose you over your competition just for those free gifts. So why would you give a couple of packets of seeds away for free? That costs you money. However, the catch is that everyone that gets these seeds has to give you their information.
These leads are more valuable than any other sort of lead because you know that they are willing to spend money. So the cost of giving away free seeds will be returned ten-fold because you are able to consistently advertise your other products to these leads for a long time to come. On top of that, if these leads have planted your seeds and have grown beautiful plants, they are already convinced that you offer quality products.
You have to have a good strategy on how to approach a potential JV partner. I’ve found that the most successful proposals are brief and to-the-point. Nobody wants to read a long and drawn out letter on why they should partner with you. However make sure you include the appropriate information.
The question that you have to answer, that all of your potential partners will be asking is: “What’s in it for me?” More specifically, they’ll want to know exactly how you might be able to benefit them and their company.
So make sure that the answer to this question is one of the biggest focal points of your proposal. It is absolutely crucial that your offer is extremely targeted, relevant and beneficial to their clients. It’s also important that it is lucrative to your partner.
Before you approach your potential partner and their company you have to do some research. Make sure you know exactly what it is they offer their clients. This way you can see what they would most likely be looking for.
A JV proposal is much like a sales letter. It has to be personal, but it also has to push your potential partner’s buttons, and make the see why they would be foolish to turn down your proposal.
Make them an offer that they can’t refuse. Again, this requires research, as you want to try and determine what it might be that would make them happy. You should be willing to bend over backwards (within reason) to make sure you accommodate your potential partner and make it as profitable for them as possible. Remember that you will be able to make more money from these new clients through backend sales, so even if you don’t make a lot of money upfront, you will be priming your business to make more money in the future.
Make it easy for them. Make it easy to say “yes.” In general, people are either incredibly lazy or incredibly busy. Your proposal will be turned down unnecessarily if it comes across as too complicated or requiring too much effort, even if it’s a highly lucrative offer. Be willing to take on the majority of the workload, and even front any monetary costs involved. However, when you are dealing with online joint ventures, there is little to no monetary investment involved.
Make sure they know that there is no other type of risk involved. Help them understand why your product or service is noncompetitive with their business. Highlight why it’s complimentary. In the same vein, make sure they understand that this partnership wouldn’t take away from any of their other profit streams. Highlight that there is little to no time commitment. Indemnify them and make sure there is no legal risks involved. Let them know that they can handle all the sales for verification and auditing purposes.
The bottom line is to make sure they know it’s a risk-free venture.
Make sure you put it in prospective for them. Make sure they fully understand how profitable it can be for them. Try and make a prediction on their earnings. If you know, talk about what your normal conversion rate is. Break it down to how much money they would be making per person that they recommend. You don’t want to just make an educated guess. If you have a new product, or you don’t have the appropriate stats to back up your predictions, don’t bother mentioning this.
Remember that even though you are essentially writing a sales letter, you have to remain personal. Don’t send out mass emails to potential partners. Make sure you include a few comments about their business. This way they feel like you understand what they offer and what they’re about. People appreciate this kind of attention to detail.
Email is a viable way to make these proposals. However, if you find a perfect partner that could give you a ton of new sales, consider calling them or sending them a proposal via FedEx. These personal touches make a good impression.
Like any sales letter, add a sense of urgency. You want to subtly hint to your potential partner that you won’t wait long to hear back from them. This is basically true anyway because if they say no, you’ll have to find someone else. Just don’t be overbearing, deceptive or unrealistic.
Most importantly, try and build real rapport with your prospect. You must keep in mind that the majority of business people, especially those that are successful, would much rather work with someone that they know, like and trust rather than a complete stranger. If you can do this before you even end them a proposal, you will have a better chance at being successful.
Understand that you will get objections. But like any sale, you can counter this. All is not lost at the first ‘no.”
If someone says they don’t feel comfortable having you interact with their customers, tell them that it would be better if they were to interact directly with their customers on your behalf. Offer to get together and talk about the proposal in person.
If someone is nervous that they are going to get paid for their part of the venture, let them know that they can handle all the money. Tell them that you will trust them to pay you and handle all the profit from the JV fairly. There is always the option of setting up a third party bank with escrow instructions. This cancels out the risk for both of you.
If someone is skeptical that it will make them money, offer to start by testing the project with a small group of their customers. If the results are positive then you can continue with the deal.
Make sure that you agree to an extend relationship. In other words, you have to protect your interests and make sure they don’t go off to your competition. This is all the more reason to make your proposal unique and lucrative for your partner.
Before you approach your potential partner make sure you understand how your business is performing. Of course if you have a new product or service this will be difficult, however if you have a proven track record with other parts of your business then you can show this to your potential partner. You will need to clearly demonstrate how much money your potential partner could make.
Brainstorm on possible products and services which would make good partnerships. Keep in mind that complimentary products and services are not the only possibilities. There are other products and services that will relate to yours through demographics.
Make a list of businesses that fit into these categories and write down their contact information. Keep organized, and check off when you have contacted someone. Following up is an important part of this.
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