Simple Five Step Business Joint Venture

September 25, 2008 | Leave a Comment

At the end of this short document are the five steps you need to go down to start you on the road to joint venture success. You may be tempted to jump to the bottom of this post read the five steps but I would encourage you to understand what is happening at a slightly deeper level.

Imagine that you have a product to sell that retails at $97on how to stay increase your business profits and live the life of your dreams.

You contact your nearest list broker and buy or rent a list of 10,000 names. You then craft a sales letter that explains your product and why people should buy it from you. You send out this letter to all the people in your database.

You find that you convert 2% of people into buying your product using this letter and approach. Two percent multiplied by 10,000 names equals 200 orders. This gives us 200 Orders which retail at $97 or a gross profit of $19,400

Do you think that a 2% response is a bit on the small side? It is in fact pretty good as far as it goes but could it be a lot better? Think about this for a second, the people don’t know you, they know nothing about your business, they probably don’t know anything about your product.

In short, they are concerned with being ripped off - Is there a better way?

Sending out a cold mailing like this is not normally going to work very well because they don’t trust you. Here is a way to improve it.

Just supposing you found an owner of a similar list who often contacts his subscribers and has a good relationship wit  them. Imagine what would happen if this person wrote a to his subscribers and mentioned how great your product is and what a great person you are.

What do you think would happen to the conversion rate?

There is every likelihood that this type of endorsed letter is going to get a far better response rate than a cold list. The reason is simply that these subscribers trust the person who is endorsing you so the trust is transferred to you.

If your Joint Venture endorsement has been properly thought through there is a very good chance that you will get wa more than a 2% response rate. Think of your bottom line, even if it only increased from 2% to 6% that’s a 3 fold increase. Think of your bottom line, even if it only increased from 2% to 6% that’s a 3 fold increase. So instead of $19,400 you are now getting 6% of 10,000, multiplied by $97, equals $58,200 gross profit.

If you doubt these results then consider this. Here is what you could do; Test 1000 names from your cold (list broker bought) list and then analyse the difference when a joint venture partner endorses you.

Step 1 - Identify what type pf customers you are targeting
Step 2 - Find a Joint Venture partner who already has a relationship with these types of customers.
Step 3 - Agree a % split of the profits
Step 4 - Do a small test endorsed mailing
Step 5 - Do a small test to a cold list (same No’s and customer profile)

Compare the two results. There is a very good chance that the joint venture endorsed mailing did far better and brought in more profit.

Now work out which one generated the most profit, repeat it and smile, as you make more profits in less time and at a lower cost.

Happy Joint Venturing

Posted by admin | Filed Under Entrepreneurship Skill 

Strategic Alliances and Where to Find Them

September 25, 2008 | Leave a Comment

I read a book called Acres of Diamonds many years ago? The most obvious place to start looking is your own back yard. This story is very well explained in Acres of Diamonds.

So the first place I would look for joint venture partners is in my own back yard. Think of your own customer database or mailing list. Your existing customers are a great place to start looking for joint venture opportunities, after all, they already trust you. Your strong relationship is virtual money in the bank, by giving people great service you can open up lots of opportunities.

Magazine Publishers
A lot depends on who the magazine publisher is, some of the very largest might be hard to reach but certainly the smaller or niche magazines are a good place to explore. It’s the same with people who distribute newsletters on line or printed material off line. They are a fabulous resource, often with very large databases and hungry customers.

Library
Your library is a virtual goldmine of good quality research material. There are reference books available that show you the numbers of members. In the USA and Canada you can review http://www.mediafinder.com/. They have around 75,000 newsletter for you to explore. There is a cost involved with this service so do your sums first before subscribing.

Another great USA based service is Standard Rates and Data Services http://www.srds.com. In the UK you can go to a list broker like Marketing File http://marketingfile.com/ Buying a large list is not our first port of call because there is a good chance that a business somewhere will already have a large list with a strong customer relationship and that is where I would go first.

Your library is going to have some great resources for research. You could always buy these directories your self. They are normally quite expensive so you could always see if they are available on eBay. Even the older ones still have gems.

Yellow Pages
This publication is now showing it’s age a bit because so much is researched on-line. But, the people who already advertise in yellow pages are a useful point of contact for joint ventures.

Seminars
Seminars can be a great place to meet potential joint venture partners. Be choosy about which ones you attend but generally they can be a rich pool of motivated people. Paid for seminars will have some of the better joint venture opportunities because you won’t get so many tyre kickers.

Search Engines
Go to Google and type in the keywords that you are looking for. You will be surprised what pops up.

Discussion Boards
Are a great place to find passionate people. These forums give you a chance to form relationships and build up trust before suggesting a joint venture deal.

Newspaper Ads
Newspaper ads can provide some good opportunities, they are after all advertising for business. Why not call them and see if they might be interested in starting a dialogue with you.

Your Website
If you have your own website, think of ways you might be able to use it to search out for joint venture opportunities. Why not mention that you are open to joint ventures and explain what you are looking for.

Ezine Directories

Competitors
I know this might sound a bit odd to start with, but your competitors could offer you useful partnership opportunities. Some of the fiercest competitors can become the strongest joint venture partners.

And the mailing will also be very targeted. Why not capitalize on this and make a handsome profit?

Referrals
Ask for joint venture referrals from existing customers. Just pick up the phone and ask them who they might know.

Other Places to Find Partners;

  • Business events
  • Newsgroups
  • Business Directories
  • On-Line classifieds
  • Magazines / trade magazines
  • Trade Fairs

There are hundreds of places to look, have fun.

Happy Joint Venturing

Posted by admin | Filed Under Entrepreneurship Skill