3 Common Mistakes of Joint Venture Marketing

Joint venture marketing has become an extremely popular way for new businesses to gain exposure and market share through partnering with existing companies in their niche. Joint venture marketing has many benefits, but there are several pitfalls to watch out for, particularly if you are a novice and new to the world of joint venture marketing. Below are several common mistakes to look out for when embarking on a new joint venture marketing partnership.

Take the time to ensure your partner has a solid reputation and high quality products and services

Selecting a partner for your joint venture is one of the most important steps in this business approach. When you choose a partner, it is imperative to choose one that has high quality goods and services, as well as a good reputation in the industry. You must research your proposed partner thoroughly because sometimes a company may look better on the surface than it really is. When embarking on a new partnership, your credibility and reputation are at stake. If you are new to the particular industry you are trying to do business in, you don’t want to get off on the wrong foot by partnering with a company that has sub-standard products or ineffective customer service. The company or companies that you partner with will reflect upon your own business, so be certain to research your potential partners thoroughly.

Offering your partner too small of a profit share

For a potential partner to engage in business with you, there must be an incentive for them, and offering too small of a deal may not make a partnership with you worth the investment of their time and effort. A joint venture partnership is something that is designed to profit both parties, and if your offer is not generous enough, your prospective partner will look elsewhere for a collaborator. Keep in mind that businesses with a large targeted and loyal client base will be the most sought after companies for joint ventures, and most likely you will not be the only company approaching them with regards to a joint venture proposal. If another business offers a larger percentage stake, they have less incentive to partner with you. So, if a potential joint venture partner is worth pursuing, they are worth sharing your profits with – without their part, you would probably have fewer profits anyway!

Handing over your client list

A joint venture marketing agreement is more than just handing over your client list, and there are a few things to keep in mind if you do choose to share client information. Make sure that if you do share client information that it is not in breach of contract with your clients if you have committed to maintaining their privacy: if you have committed to maintaining a clients privacy and you share their information with a joint venture partner, that is a sure way to sour any future business with those clients. Also keep in mind that you’ve worked very hard to develop your client list, and create good relationships with your loyal clients, which forms part of the value that you have to bring to a joint venture partnership. If you simply hand over your client list to your new partner, you give up an important point of leverage.

How to Profit from Other Websites with Joint Venture Marketing

Joint venture marketing has become a very successful way for small Internet businesses to create new niches of business and increase their visibility and popularity. Joint venture marketing is about a sharing and exchange of client information, so that all of the parties involved profit from the experience and contacts of the others.

If you have a new, small Internet business, joint venture marketing can be a particularly good route for you to expand your client base. If you have a new business, it is often difficult to break into an existing market place—even if you have an excellent product. By engaging in a joint venture with an established player, you can effectively market and sell you product to customers you weren’t previously able to reach.

Another effective use for joint venture marketing is to drive traffic to your website, or to profit from exposure on your joint venture partner’s website. When embarking on a joint venture agreement, sharing of client lists and information—at least partial is usually part of the deal. This means that your partner’s client base will be absorbed into your own and vice versa, expanding the reach for both of you. As man is a social creature, successful joint venture partnerships often hinge on who you know—for instance, you are much more likely to take advice about new products from a source that you already trust (eg, a company from which you already do business) than you are from a novice stranger.

Joint Venture Website Advertising

Another effective niche for joint ventures can be purely an advertising streak. Some businesses hesitate to part with their hard earned client lists, or it may be a case that sharing client information would present a breach of agreement with their customers. In this scenario, a joint venture may consist purely as an exchange of advertising space. If you have a website or multiple websites, you agree to run advertisements for your joint venture partners on your site in exchange for ad space on their websites, you will both be gaining exposure to new clients without compromising the privacy of your existing clients.

This is particularly effective because an advertisement that a customer sees on a website for products that they already use is viewed as an endorsement by the website owners. The thinking is that, you wouldn’t risk promoting a sub-standard product on your own website because it would weaken your business image. Thus, if a loyal customer of yours sees an advertisement on your website (which they will most likely view as a promotion/endorsement from you) it will naturally lend authenticity to the advertised products. The same is true in reverse, if a new customer sees an ad for your product on the site of your joint venture partner, they are more likely to trust, and to purchase your product than if the ad just came up on a search page. Joint venture marketing can be an effective way to reach new markets for new, as well as existing Internet businesses.

Benefits of Joint Venture Marketing

Joint venture marketing is similar to joint venture agreements in other business domains: simply put, it is an agreement in which one party makes an agreement to do business with another party. In a joint venture, each party brings something different to the partnership, synergizing their skills, and offerings to create something stronger than either party could execute on its own.

When it comes to marketing, foraging a joint venture has to do with expanding your net of sales and marketability by creating relationships with others in a similar business that have something different to offer than you do alone. For instance, one party may have a phenomenal product, but are new to the business and have few contacts or a way to get their foot in the door with this great product. Another party may have an extensive client list and contacts in the industry, but nothing new to sell. A joint venture marketing relationship between these two parties will benefit both, and create business opportunities for both parties, where none existed for them independently.

A Win-Win Situation

Joint venture marketing is about building business relationships that create a win-win situation for both parties: they both gain something from the other that didn’t exist before they began a joint venture marketing collaboration. Joint venture marketing practices most frequently take place between two parties, but a joint venture marketing plan can include a number of parties—it does not have to be limited to just two parties sharing information and resources.

With joint venture marketing, you are creating a third entity from your combined resources. This way, each party’s individual business and resources are protected, yet the joint venture scheme also increases business for each party by reaching a different niche in the market than either could alone.

Where is Joint Venture Marketing Used?

Joint venture marketing is largely born out of the Internet boom. The inception of the Internet has created an almost endless array of ways to reach new and prospective clients. Internet marketing is largely built on the sharing and exchange of information. Joint venture marketing is another way to distribute information, and for numerous parties to profit from a collaboration.

In regards to Internet use, joint venture marketing is often used as a way to increase traffic to your website. If your business has a reliable list of clients but has difficulty breaking into new niches or gaining new business, a joint venture may be a good option for you. For example, if you go up to a stranger on the street and say, “Hey, I’ve got this great product for you to try”—they will most likely not pay attention. But if someone that they already trust, and whose products they use says, “Hey, I’ve got something new for you to try that I think you’ll really like”, the prospective client is much more likely to pay attention to the offer, and potentially try the product. This is the idea behind joint venture marketing: a collaboration that will mutually benefit both parties through a sharing and exchange of expertise and information.

Relationship Marketing: Using Demographics As a Lead Source Tool

A good lead-scoring model is an important part of a successful relationship marketing plan. The impetus for implementing a relationship marketing scheme is to build, develop and maintain strong customer relationships. Implementing and reacting appropriately to a lead-scoring model developed for your company is one of the first steps towards turning a lead into a client. By knowing how contact and develop potential leads, you will better know how to nurture these relationships once they move from the lead phase into the client stage.

Types of data for relationship marketing

The most successful and accurate lead-scoring models use both explicit and implicit client information. Explicit data are hard facts about your leads that are often provided by your prospects themselves, such as gender, geographic location, company, company size, and title. Implicit data is collected from monitoring the behavior of your leads: web site visits, emails they open, and sometimes previous purchases.

Used together, explicit and implicit factors create a comprehensive picture of your prospective clients that help you make an accurate determination of their likelihood to purchase your products and services. Demographics and psychographic information are two important types of explicit data that are integral to the execution of a successful lead-scoring model.

The value of demographics data

The demographics section of a lead-scoring model categorizes individuals based on characteristics of both the individual, as well as the company for which they work. Some lead scoring models will rely heavily on individual information, some will rely more heavily on a lead’s company information, and some lead-scoring models will use a combination of the two. This will largely depend on the type of business you have, and the types of products and services you provide.

Demographic information collected for your lead-scoring can be extremely useful and help to shape the relationship marketing campaign for your company. If you sell beauty products online, you may discover that a certain brand sells better on the East coast than on the West coast. This will help you further tailor your lead scoring model, as well as your relationship marketing plan.

Demographic information can be extremely useful, but it does have a few pitfalls, of which you’ll want to remain aware:

Self-reported information is not always accurate

People often give answers that they believe are more desirable, such as overstating the size of their company or their salary. Beware of potentially aspiration data.

Company information tends to roll towards the mean

Leads at large companies may downplay the size of their company, or their role to avoid potentially hassling sales calls, while leads at small companies may pad their numbers to appear to be a bigger player on the scene than they are in order to be given more attention or to be taken more seriously.

Sometimes people lie

Unfortunately, not everyone will tell the truth on your data collection forms. For a variety of reasons ranging from embarrassment to annoyance or secrecy, some people are reluctant to reveal personal information. If this is a prerequisite for downloading something from your website, they may enter incorrect information.

Lead-scoring is a very successful tool, and demographic information is one of the most essential aspects of a lead-scoring model. Keep in mind that the data may not always be 100% accurate and figure this into your scoring system. It is also useful to remember that scoring doesn’t have to take place all at once – you can do it over time, and this may be a more effective way to run your lead scoring model, as part of an effective relationship marketing platform.

Are You In Control of Your Income Potential?

Corporate America hierarchy vs. unlimited Joint Venture Dealmaking

Are you in control of your lifestyle and income potential?

Let me tell you a quick story about one of my first Joint Venture deals

One of my first, profitable joint venture type deals I did was back in May of 1993. Yet, at the time, I really didn’t even know what a Joint Venture Partnership deal was.

Flashback to 1992, I was 23 and working in Corporate America with little more than a vision of what I wanted to do with my career beyond my current technical support position. I was only there about 2 years, but I knew there was a better way. I could no longer work in a corporate setting due to all the limitations, narrow thinking, and corporate politics.

I felt like a caged animal dying to run and be free to create my own path. I wanted to create a working career and environment that I could control my own destiny, how much money I made, and set my own hours. I was tiered of my middle level manager dictating how many hours a day I had to be sitting in a chair and that my ideas for making possibly beneficial changes to the department would have to go through the “review board”. I’d clearly had enough of operating in an environment of maybe using 2% of my potential. Can you relate?

I had gotten my first computer when I was 12 so I had a propensity towards being online through bulletin board systems (BBS) with my 300 baud modem. The commercial Internet was just starting to evolve. At the time there were only 64 sites on the net and Yahoo just launched this crazy site, coined a “search engine”.

I knew I wanted to get out of my Corporate America job and get into the Internet Service Provider (ISP) business, but I didn’t want another limiting 9 to 5 job.

I had to come up with a way to get leverage on my current skill set (Computers and a fascination for marketing and what made some companies successful while other failed). If I was going to break away from Corporate, I had to offer some type of valuable service that other business owners would want to pay me for.

I had to focus my efforts towards providing value. Knowing that I wanted to work in an environment that had an unlimited potential and I knew I wanted to work in the ISP business, I started thinking about how I could make a profitable contribution to a local ISP business in my city.

I signed up for their Internet access services and quickly starting asking questions. (In retrospect, this questioning process became a very important tactic to creating trusting and profitable relationships). I got to be pretty friendly with the owner of the company (his name was Jerry) since I was calling tech support so much and asking questions about how their service worked.

We started talking about his business and what he needed most to be more successful. He told me he needed more clients since he and his dad started the company without any real sales or marketing experience. Coincidentally, I had been reading about marketing and creating leverage in Entrepreneur magazine. Specially, the article was talking about using existing relationships to create new marketing distribution channels.

Even though I had no formal training or experience with Joint Venture Dealmaking at the time, my ambitious ignorance, need for a huge change, and my naivety lead me to take the next step towards creating my ideal working situation. Little did I know at the time, but this one decision enabled me to create the experience and momentum that I needed to create a working lifestyle that I’m still benefiting from today.

So, I told Jerry that I wanted to help get him some new clients. I told him I had a few ideas about building a commission only sales and referral system with other local, non competing, but similarly related products and services.

He was interested since their was little risk for him and he had more to gain than loose in setting up a deal like this. We quickly met (in person, rather than on the phone which was very importing for building trust towards our long term working relationship) for a meeting to discuss a fair commission structure. I asked him for 20% of all the gross sales for the first 6 months that I brought in. He agreed since his upfront marketing costs were zero. I created a very simple, one page contract that outlined our agreement and I went to work on creating a system for bringing in new clients. I figured I could make an extra few thousand a month on the upside and if it didn’t work, Jerry didn’t loose anything since I wasn’t charging him upfront for my services.

For the first 30 days, I called on local business owners who offered likely associated (Technical Repair Services, Graphic Designers, and Advertising Companies ) products and services. The overall reaction was very positive since I had 3 new companies (not individuals) that were now reselling the Internet Access service for me. Keep in mind, there’s a HUGE difference between having 3 new client and having 3 new business reselling the service to their employee’s and to their existing clients. I wound up making an extra $1500 a month in residual income from just setting up these 3 companies. Time invested, maybe 30 hours total. I’ve also applied this type of strategy to generate over $1.5M in profits in 11 months for another company. (I’ll be sharing some of the details of this deal with you in future newsletters)

This is where the leverage comes in. Instead of calling 10 calls to 10 end users, I made 10 calls to business owners who already had the trusting relationship built with the exact type of clients I was looking for.

Is this starting to make sense to you? Can you see how powerful a Joint Venture Deal can be? Instead of thinking in a one to one mind set, think one to many. Meaning, you should be spending your time on money making projects and relationships that allow you to tap into existing influence and trust networks to leverage your time, money and efforts.

Your assignment for this week is to write down 3 to 5 business’s that you could apply this strategy to. Think about what problem you can solve for them? If you can solve their problems, they will gratefully pay you for your help. Don’t worry about “How” your going to do this, just think about “What” you can do to help them succeed in their business.

Next time, we’ll be talking about “Collaborative Intention” and why it’s important to start thinking as “we” instead of as “I”.

Profitable Customer Life Stages in Relationship Marketing

Building a consistent customer base through strong relationships with your clients is the foundation of all relationship marketing plans. Focusing on understanding the customer’s perspective, as well as delivering products and services that address a client’s specific needs, will help give your company an edge in an increasingly competitive marketplace.

Attracting new customers, gaining new business, and maintaining these ties throughout a lengthy period of time is often referred to as a “customer life cycle,” or as “customer life stages.” These terms are part of a relationship marketing platform that presupposes an extended affiliation with a client.

The goal of every marketing plan is to get a new prospective client into a relationship with your company so a customer life cycle can be developed. Thinking of your customers in terms of a long standing relationship will determine how you approach your prospects.

At the beginning of your relationship, it is a good idea to have a customer life cycle method in place. This will target your strategic thinking in a different way than if you were looking only to develop clients in a short term relationship. If you approach and engage a client as though he will be with you for a long time, the chances are higher that this relationship will be realized.

A customer life cycle strategy is a system that keeps the customer as the center of importance through the lifetime of your company’s relationship with the client. There are a few key points to keep in mind when developing a plan for a customer life cycle.

Satisfaction vs. Loyalty

It is important to keep in mind that customer satisfaction is not the same as customer loyalty. Customers may feel completely satisfied with your products and services, but not feel a sense of loyalty to your company – a loyalty that would inspire them to purchase from you each time, instead of one of your competitors.

An important part of a successful relationship marketing plan is to engage a customer in a life cycle so he will be both loyal and satisfied. This is a subtle distinction, but one well worth keeping in mind: satisfied customers are not necessarily loyal customers.

Product Purchase vs. Product Consumption

Product purchase and product consumption are two distinct phases in the customer life cycle, and it is important to keep this in mind. A customer may purchase a product, but may not immediately use or consume the product.

Getting a clear idea of the relationship between purchase time and consumption time for each of your customers will help you to better facilitate a successful long term relationship with your clients. You may need to alter your company newsletters, emails and re-order reminders based on the purchase/consumption relationship. For example, let’s say your company sells contact lenses online. If a particular customer tends to buy a repeat order of lenses several weeks before he needs them, you will have to make sure your email re-order reminders are in sync with this customers purchase and consumption habits to help you maintain him as a loyal customer.

Understanding the customer life cycle and these subtle distinctions are one step towards building a successful relationship marketing strategy, and ensuring the longevity of your business.

Christian Fea is CEO of Synertegic, Inc. A Joint Venture Marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.

To discover more Joint Venture Marketing Strategies join his free JV Wealth e-zine.

Discover Professional Associations to Develop New and Profitable Relationships

Marketing your small business can be tricky—there are a myriad of approaches, theories and potential platforms in which to structure your marketing plan – so putting a plan into action can sometimes seem overwhelming. If your business is relatively new or a marketing strategy such as relationship marketing is unfamiliar, you may want to seek help from a professional association.

Professional associations offer a wealth of information, training classes and expert contacts to help guide you in the right direction. If you choose to join a professional association, you’ll have immediate access to creating relationships with other companies who are also members of that association.

The Association for the Advancement of Relationship Marketing (AARM)

The Association for the Advancement of Relationship Marketing (AARM) is the most well known professional association committed to helping businesses develop relationship marketing platforms. AARM is an international association that offers training courses and information on how to integrate a relationship marketing scheme into your company’s business structure.

AARM focuses on Customer Relationship Marketing and Customer Relationship Management, both commonly known in the business world as CRM. CRM is the central marketing practice under which relationship marketing fits.

AARM offers professional development workshops, seminars, and coaching with certificate programs to help you integrate a relationship marketing platform into your business. If your business is new to thinking in terms of a relationship marketing strategy, guidance from a professional association like AARM can help you navigate these uncharted waters that may seem a little daunting.

If you are a business with an established marketing platform, news, information and workshops from a professional association like AARM can help you stay on the cutting edge of marketing ideas for your business, and help you develop new and creative ways to meet the needs of your customers.

It is not necessary to join a professional association like AARM to benefit from what the association offers—you may participate in the seminars, workshops and classes even if you are not a formal member of an association. But one of the main benefits of becoming part of a professional association is the networking possibility that it offers. Membership in a professional association gives you access to other members who have the experience and knowledge that could benefit your own business.

Networking for Marketing

Professional networking is an important part of relationship marketing. By networking with other businesses, you enhance your professional relationships, which can only help benefit the relationships you have with your current customers.

Forming alliances with other companies, or just making a new business acquaintance, can enhance your existing client relationships also. Learning from other experts in your field, or even people in related fields, can give you insight and ideas on how to approach problems and issues with your own business. Another benefit of professional networking is the potential to share clients; you may meet a contact whose clients are in need of the types of products and services that your company provides, and vice versa.

There are many benefits to exploring a professional association, even if you do not want to make the official commitment to join as a member. The networking opportunities and business contacts you’ll make will be beneficial and you’ll stay informed and on the cutting edge of what is happening in the relationship marketing industry, which will only improve your business’s relationship marketing platform.