Grow Your Business with Joint Ventures
Joint ventures are a highly leveraged way to grow your business and exploit an exhausted or passive asset in your, or the other parties', business. Joint ventures are also known as host-parasite relationships; in reference to the beneficial (symbiotic) relationships found between two entities in nature.
In most instances, one business will contribute to the well being of the host; and the host will provide a reward in return to the parasite. The resultant benefits are greater than one business could capitalise on alone.
An effective host-parasite relationship provides the parasite with a highly targeted prospect group, leveraging off the established rapport with the host; and provides the host with a means to re-sell to a passive asset base.
In many ways, approaching another business with an offer to engage into a mutually beneficial relationship follows the same marketing principles as B2C communications. Below we outline some of these similar characteristics, along with unique issues you should consider when prospecting a joint venture:
Get the right host - Marketing fundamentals still apply. You're better off having a smaller group of highly qualified leads than you are a big list of unqualified leads. You must carefully select who you host with as it will dramatically affect your outcomes.
Congruence - You want your host to have similar business values. If you establish a host-parasite deal with a host that has a poor reputation and no rapport with their clients, your deal will not work. Aim to find hosts with great industry reputations (these are usually the ones that’ll be hardest to convert to a host-parasite deal, but will be worth it in the end).
Win-Win - You must make it worthwhile for the host to enter into the relationship. The best place to start is to identify your Cost of Acquisition and Net Marginal Worth. These metrics will tell you what you can pay the host as a commission.
Bigger ticket items - There is little value trying to establish host-parasite deals to sell your small ticket items. There is no margin for you to commission back to the host, and you need such a large number of sales to make money that it makes the process redundant. Aim to use host-parasite relationships to sell products and services from the bottom (narrow) end of your sales funnel.
Non-competition - Identify hosts that won't deem your offer to be competitive. Ideally, your product will add-value to their clients and prospects; and make them money!
Control Distribution - It's important not to breach Privacy legislation. In most cases the host will distribute your offer to their list. This is more leveraged anyway as it serves as a testimony of your product.
Demonstrate the value - When approaching a host, you must clearly and succinctly explain how they will benefit from the relationship.
Volunteer to develop the marketing material - You should not impose effort on the host. Only reward. Let them know you'll supply all marketing material, which will be subject to their approval. You may even offer to pay their distribution costs to their list.
How to Approach a Host
Here's an example approach you can utilise to contact a prospective host:
Hello [Name],
My name is _____________. I own ___________ company. We specialise in _________________.
I'm contacting you because I believe I have an offer that will make you additional income, with little to no effort whatsoever, no investment on your part, and absolutely no risk.
In fact, if you're interested, I believe I can demonstrate how every one of your clients, and even your unconverted leads, can be worth an additional $____ to you.
Every business has an enormous amount of unrealised value. This is usually in the form of the goodwill you've established with your clients and prospects over the course of your relationship with them.
What I propose is this: After you've extracted all the sales and profits you believe you can from your clients, together we'll sell them my product/s and share the profit.
You can control the marketing by way of an endorsed letter at my cost.
Our service is a natural mesh to your clients and prospects. It's not competitive, and I believe, will even assist you build greater rapport with your clients.
This marketing system is used to great affect by big businesses. It's one of their secrets to massive profits. Maybe you've received a statement from your bank or credit card company that includes promotions to other companies. What I'm suggesting is very similar and works to great affect.
As I only have ____ available, I can only work with a limited number of companies at one time. As you have an excellent reputation in the marketplace I chose to approach you in the first round. I'll give you a call on _____ to discuss this further.
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Joint Ventures; Email Marketing Tips
