A joint venture is simply a partnership created to take advantage of non-competing products or services that are extended to the customers of both partner’s businesses.
There are many different ways to set up a joint venture and a lot of variations to the theme, but this is basically how it is structured:
One business will make contact with a non-competing business owner to offer his services or products to the non-competing businesses customers and will offer that owner a portion of the profits of all sales (in return for the privilege of contacting his customer base).
The partnership is set up in such a way that the business customers are given “the opportunity” to participate as a favor of the resident business owner.
In other words, he is doing this to help his customers get a deal they wouldn’t find elsewhere.
This type of partnership can be a real win-win for the two joint venture partners.
The owner setting up the deal benefits because he gets access (and a recommendation from the 2nd business owner) to a new database of potential buyers of his product or service.
It is a win for the 2nd business owner that shares his customers because he makes a profit on every new product or service his customers buy and if the product is a valuable one, he gets the reputation of giving increased value to his loyal customers.
And the original business owner doesn’t have to create a new product!
To make this type of partnership effective, the following characteristics ought to be engineered into the deal.
First and foremost, the two businesses should be connected somehow.
They don’t have to be in the same niche, but they shouldn’t be direct competitors with one another.
Here’s an example: a shoe repair business may propose to do a joint venture deal with a local dry cleaning business.
They do not offer direct competition to each other, but they may appeal to a similar clientele.
Maybe a movie theater and a restaurant put together a “date night” joint venture package.
The potential ideas where two businesses could work side by side so they each profit are endless.
Second, the joint venture partner proposing the deal ought to be very generous with his commission on each sale.
He is being given access to a targeted audience of customers and he is benefiting from the endorsement (implied or blatant) of the list owner.
In most cases, he should be entitled to at least an equal share of the profits from all the resulting sales – even more if it’s feasible.
Third, the list owner should set up the contact of his own customers. He should never just give his list of customer’s contact information to the first owner.
He has probably told his customers that he won’t share, rent, or sell their personal information and he should guard that promise very seriously.
The original owner proposing the deal can certainly craft the sales message and handle the delivery of the product, but the list owner should control every aspect of contacting his own customers.
Sometimes, the joint venture is a mere trading of direct mailings.
In effect, two list owners mail the others’ offer to their list and get a percentage of all the resulting sales.
Typically the lists should be of similar size and pulling power for the joint venture to work equitably.
Also, joint ventures are way more successful and powerful if they come with the recommendation and endorsement of the product by the list owner.
He is the trusted authority and if he can tell his customers that this really is a valuable product, they will be much more inclined to make the purchase than if a non-personal sales pitch is simply sent out to all the list members.
In future discussions we will look at additional joint venture strategies, opportunities, and methods.
I hope you realize that this really is a great way to significantly increase your business sales without necessarily ramping up your first-time cold contacting via traditional advertising.
It is also a nice strategy for adding prospects and buyers to your subscriber and “buyer’s list” as there will most likely be sales made to the joint venture partner’s list members that won’t be on your own list.
Remember, this strategy works best if the two partners are non-competing but in the same (or closely related) niche.
To your online business success,