Double or Triple Your Client Database and Sales with Strategic Alliances and Joint Ventures...
Recently our friend and colleague, American marketing guru Jay Abraham, invited hundreds of business entrepreneurs to pay around £2,500 each to attend an event where he would teach them how to identify and set up strategic alliances.
In tough economic times, £2,500 may sound prohibitive. In truth, this knowledge is priceless.
As Jay points out, there are dozens of potential strategic alliance partners - other companies, organisations, networks, and distributors - who have 'your' perfectly profiled marketplace.
What's more, they've invested thousands over the years creating those client lists and creating high levels of trust with them.
Likewise, you have a client list perfectly primed for the products and services of others.
When you create a joint venture, or an endorsement strategy with a non-competing company selling to people with a similar profile to your customers, you will find that tapping into someone else's database can produce huge profits rapidly, and massively increase your database.
Tips on setting up a profitable strategic alliance...
- Identify potential partners in non-competing businesses, who sell to similar people or businesses to you.
- Only work with businesses with similar values, market position (don't try to sell your premium products through an alliance with a business that is aimed at 'price shoppers') and where you have high levels of trust.
- Structure the arrangement so that it is win-win-win. That is, you have something of value to offer to customers, it is good for your partner (they get profit share, or access to your customers in return) and you get to make more sales and grow your database.
- Be prepared to invest some time educating potential partners about allowable cost of acquisition, using packaged information offers and helping them to see the full value of what doubling their potential market place overnight could mean to them and their business.
- Make sure you don't inadvertently fall foul of the Data Protection Act requirements. But don't let it put you off either, it is not as restrictive as you may think. But clearly if your privacy statement says you will never share data, you must respect that and go for an endorsement approach rather than a list swap, for example.
Great strategic alliances are not industry or business size specific, they range from highly complex arrangements where airlines get together to share customers and code share flights, to a florist who works with local wedding venues.
Here are some great examples of highly successful alliances...
More Than Doubled Sales During the Recession
One of our clients who took this strategy seriously at the beginning of the recession, has more than tripled their database with list swaps and alliances over the last two years.
As a result they have more than doubled sales (worth more than £1m) at a time when the economy was going backwards, and at good margins. They continue to actively seek out new lists and are continuing to grow at a rapid clip.
Landscaper and Home Renovations
A landscaper has a strategic alliance relationship with a home renovations company. They add value to each other's clients by providing consultations, and pick up a lot of business in the process.
Paul Moxham, who runs one of the world's most successful car dealerships is a master at alliance relationships. He's created a relationship with a restaurant and is able to offer his new car purchasers a complimentary dinner for two as his way of saying thanks. It costs the restaurant little, yet they get a constant flow of new diners. And his customers think he's the greatest car dealer ever. He has similar arrangements with florists, massage therapists and a petrol station.
A wealth building advisory company has a relationship with a company providing a non-competing low cost self-help wealth building product. They 'gift' their clients tickets to seminars for the lower cost product company. They're adding value, and also pay fully disclosed royalties on sales that eventuate to their higher cost services from others in the room.
Removals and Estate Agents
A removals company has a relationship with an estate agency. They endorse each other's services, and tap into a perfect Cycle of Life opportunity.
1,000 New Clients in 3 Weeks
Finally, let me share a case where we added over 1,000 new clients in about 3 weeks, and made (in today's money) about £90,000 in the process.
We'd approached the publisher of a popular small business letter with a profit share proposition. This proposition was that he endorse, to his list, our new manual on advertising.
He loved the manual and wrote a glowing article and an order form to be inserted into his newsletter. It went out to his 25,000 subscribers.
A few days went by, and 20 or 30 orders appeared in the mailbox. Amazing! We were impressed.
The next day, another 50 or 60 orders appeared. Extraordinary! Each day thereafter, literally hundreds of orders poured in. It became an avalanche.
We sold over 1,000 manuals at £90 per copy in today's prices.
Here's the powerful message in this exercise. If we'd approached a 'cold' rented list of small business owners, we may have expected to get a 0.5% response.
Remember, we were selling 'off the page', site-unseen, with payment required up front. Yet, to this newsletter subscription list, we produced EIGHT TIMES the response, grossed £90,000 and gained over a thousand new clients in a matter of a few weeks.
This is of course only scratching the surface of strategic alliance and joint venture strategies.
There are unlimited permutations and combinations ... using 'soft cost', packaged information and special privilege offers, free product offerings based on the 'lifetime value' of an acquired customer, and so on.
Why Don't More People Do This?
Good question. I wonder about that too.
Is it that it seems too good to be true? Could it be that approaching another company with such a "big idea" is intimidating? Is it a lack of imagination or creativity? Is it a reluctance to share your database with other companies? Is it a mis-placed concern about the Data Protection Act?
Whatever it is, almost every one of those fears or risks can be minimised or reduced with sensible planning and precautions.
And the upside when you find a win-win-win alliance is so strong, and so exciting, that it is worth considering and testing isn't it?
I hope this edition of Results Report stimulates you to seek out strategic partners with 'your' future customers in their client base, and to seize the moment to find them and talk to them about the possibilities.
Take a valuable first step in getting control of the growth of your business today and apply for a free Revenue Opportunities Analysis - it could be the best 75 minutes you spend in your business all year.
Based on an article by Chris Newton, founder of Results Corporation.