The Little Known Secrets of High-Profit, Zero-Cost Joint Venture Marketing…The Cheapest, Least Risky Way to Get New Clients in The Door Fast !
Probably the least understood, yet most profitable form of marketing is joint venturing. It never ceases to amaze me how many people miss huge opportunities to make windfall profits simply by doing joint ventures with companies who have customers or products similar to theirs.
The truth of the matter is, most people just don’t know about Joint Ventures, and the ones who do are afraid to do them for various reasons. This is a shame, because there are millions of dollars of easy money to be made this way. I myself have made a fortune in the past few years simply by entering into Joint Ventures. And, I’m embarrassed to say, it was some of the easiest money I’ve ever made. I’d also like to make more money with Joint Ventures, so I finally decided to sit down, write this report, and share my Joint Venture secrets. Often when I have approached a potential Joint Venture partner, they have initially been scared and certainly sceptical. After I’ve educated them about Joint Ventures, however, they’ve become excited and ready to go… and when I’ve sent them a cheque, as a result of the venture, all they want to know is: “When can we do another one?”
Instead of explaining how they work every time I talk to a new potential Joint Venture prospect, I decided to condense all my knowledge in this report, so that by the time I actually talk to a prospect, they’ve read the report, so they’re informed and excited about making money doing Joint Ventures.
What is a Joint Venture?
There is far too much confusion about what a joint venture actually is. A lot of people see joint ventures as something only big companies do, after a contract a mile high has been negotiated by teams of lawyers. Maybe some JV’s happen like this—I wouldn’t know because I’ve never been involved in a deal like that and never plan to be. All my joint ventures have consisted of a short phone conversation and the signing of a two page document. That’s it. I’ll get into the details later on in the report, but it’s important for you to know what a JV really is. Simply, a JV is a mutually beneficial arrangement between two people whose resources compliment each other. Take two sets of existing resources, combine them, and “magic” happens- there’s money where none existed before.
Resources can be any number of things that compliment each other. Perhaps you have a list of customers, and a potential prospect has a product your customers would like. Or perhaps you have a product with a tested, proven sales letter, and a potential JV partner has a list of customers who’d want that product. Either way, you can both be making money in a week or two, you wouldn’t have otherwise made. It takes a long time to develop a product or a list of customers, and by doing a JV with someone who already has one, you’re saving yourself a lot of time and money.
The reality of Joint Ventures is really very simple, and pretty much comes down to asking a potential prospect, “Want to do a deal?” No lawyers, no long drawn out negotiations, no committee meetings, no going into business with the other party.
Everyone already does joint ventures in one form or another. Say, for example, you’re at a seminar with a friend. You have a rental car, and he has a wad of cash in his pocket. He really wants to go to a favourite restaurant, but it’s all the way across the other side of town, and a taxi ride would cost a fortune. So, he offers to pay for your meal if you’ll drive. Would you agree? Of course you would—he just offered you a “Free Money” deal if you’ll combine your resources with his. He spends less buying you dinner than he would if he had to take a taxi, and you get a free meal you would otherwise have had to pay for. Both of you get your desired outcome, and at considerably less than if you’d been by yourself.
From a business point of view, there are many compelling reasons to do JV’s. So…
Why Should You Do Joint Ventures?
1. Gain Time—One of the best reasons to do joint ventures is because of the time savings. It’s much quicker to find someone who has already built a customer list or created a product your customers may be interested in than to build a list or create a product yourself. It may take you six months to create a product, write an ad or sales letter for it, and then offer it to your list. It can take years to build a list of customers. When you find someone who already has one or the other, you can be making money in a matter of weeks instead of months or years. Joint ventures are a great time saver.
2. Leverage- “Piggyback Effect”—This is probably the biggest reason to do a Joint Venture. Not only do you get access to a list of customers it would take you years to build, you get to “piggyback” on the relationship that JV partner has created with that list. The most powerful part of a joint venture is the endorsement of the person the customer list has a relationship with. If you were to mail to that list without the endorsement of the list owner, you’re results would be much, much less. Think of it this way: if a stranger approached you and told you to try a great new restaurant, you’d probably be pretty sceptical – or ignore him entirely. If, however, your good friend Joe approached you and recommended you try the exact same restaurant, odds are you probably would. Why? Because you know and trust Joe. It’s the same way when a Joint Venture partner endorses you to their list (or you endorse them). Customers are much more likely to buy because they know and trust the endorser. You get to leverage a relationship it took years and lots of money to create. That’s why Joint Ventures can give you incredible, instant, leverage, no matter what your financial situation is.
3. High Net Profit for Both Parties—This is my favourite reason to do joint ventures, and it ties into the “piggyback effect.” Because you are being endorsed to a group of customers by the list owner, response rates are much, much higher than if you marketed to that list without an endorsement. As a result, net profits for both parties are much higher. You get to make a lot more money in a lot less time. The same thing goes if you’re endorsing someone else’s product to your list. Because of your endorsement, a larger percentage of your customers will take you up on your offer of your partner’s product. You’ll make money you never would have had, as will your partner.
OK, now that you understand the power of JV marketing, and why you should be doing JV marketing, the next thing you need to know is…
Where to Find Qualified JV Partners
Here is a rule that has served me well for a long time when it comes to JV’s:
Do JV’s with PEOPLE, not businesses!
One thing I’ve found is, it’s vitally important to foster a personal relationship with your JV partner. What I mean by this is, you’re able to pick up the phone and call them, they have the ability to make fast decisions by themselves, and they don’t need to run every business decision by a committee or a gaggle of lawyers. Many big companies are like this, and it can take years to get something going with them. That’s why I say…
Small business people are usually (but not always) the best to do JV’s with!
Most small business people have the ability to make quick decisions. Most really like the idea of making money with little or no work. Most are accessible. And most can’t stand lawyers. Almost all my Joint Ventures have been with other small businesspeople. And rarely have I had a problem. Occasionally it does make sense to pursue a Joint Venture with a larger company. There are many larger companies, especially catalogue companies that are used to doing JV’s with small business people. Many of these companies can turn over big numbers, so it makes sense to pursue them. However, most of your successful Joint Ventures will be with fellow small business people.
Where should you look to find potential JV partners? Here are the best places to look:
1) Your Own Customer List– If you have a substantial list of customers, this is the best place to look. I found many potential JV partners within my own list, and I’m currently doing JV’s with three of them… enough to keep me busy for a long time. The great thing about doing JV’s with people from your own customer list is, you already have a relationship with them, and they understand your business and your product. With the businesses I’ve entered into an arrangement with, I knew they would be good JV partners because I purchased a lot of their products and knew they had lists of customers. So, setting up JV’s with them was very easy, and it has been very profitable. The first place to look is your list of customers.
2) Trade Magazines/Niche Publications- look at ads/run your own ads—trade magazines are full of joint venture prospects. Just look at all the ads. If you see ads running over and over again, chances are that advertiser has a list of customers or clients they have a good relationship with. Also, since many of the trade magazines are very small, a lot of small business people run their ads there. All you need to do is answer their ads, get their sales literature and see if your product might match up with their customers, or their customers might match up with your product. Just find the trade magazines you are interested in, and call their advertising departments and ask for a media kit. Be sure to request several back issues of their magazines. Then, read through them, find out which advertisers are potential prospects, answer the ads that make sense, read their sales literature, and then propose a JV to them (I’ll show you my step by step process later in this report). Some will say no, some will say yes. You only need a few to say yes to make a lot of money.
3) Trade Shows/Trade Associations Trade Shows can be a great place to prospect for Joint Venture partners because you get to meet and talk with prospects face to face. Also, there are a lot of them there at one time, and they are all in the same industry. They all have sales literature, and are in a “deal making” mood—it’s possible to walk out of a trade show with three or four lucrative JV’s set up and ready to go. You can find a directory of trade shows in the library.
4) Seminars—I’ve met many JV partners at various marketing seminars, and I can tell you, seminars are one of the best places to meet JV partners. Most of the attendees are serious students, can afford the entry fee and travel expenses, and are there to learn how to make more money in their businesses. I make sure to talk to everyone on the breaks, and I usually wind up going to lunch or dinner with several potential JV partners. Also, most people who attend marketing and educational seminars understand JV’s and are very open and willing to do deals.
Here’s a big secret: Most potential joint venture partners have no idea about the value of their customer lists, and have under-marketed to them. Remember, the profits are not in the first sale to a new customer, but in repeat sales to an existing customer. Very few business owners market to their customers as they should, so when you mail an offer to these customers, often there is a “pent up demand” for a new product. This can lead to tremendous profits for you. However, before you approach a JV prospect, you need to understand…
The Psychology of Potential JV Partners
Very few business people understand the value in their list of customers—they think the value is all in their product. The sad truth is, most business people don’t want to understand the value in their list. This affects how you approach them, and the offer you make them. Don’t try to educate them about marketing, list value, or direct mail—just let them know they’re going to make money they would not have otherwise made, while doing little or no work! The sample of the “Free Money” letter I use to set up JV’s is included at the end of this report. Here are some things you should know about most potential JV partners:
1) Most are trading hours for dollars- their business owns them. Most business owners are truly slaves to their businesses. They concentrate on stocking shelves, seeing patients, ordering inventory, and other such tasks which are really incidental to the true purpose of their business—acquiring new customers and selling more to existing customers. As a result, most business owners make very little return for their efforts, and work long days. Their business owns them, and they are in constant pain with no way out.
2) Most know zero about information/direct marketing; don’t yet understand the value of their customer lists—As I said before, very few business people understand even the rudiments of smart marketing. The smartest thing any business could ever do is to get the names and addresses of their customers, and contact them once a month. However, very few ever do this. Some do, or, as a by-product of their business, collect customer contact information. Even if they have a list of customers, rarely do they make offers to them. What this can create is a “pent up demand” for more product from them, so when you send your offer to them, it can do very well.
3) All are not “sane business people” Just be aware that many of the people you contact to do a JV with will turn you down for incredibly dumb reasons. Forget about them—there are plenty of others who are very attracted to the idea of “Free Money.”
How to Approach JV Partners
How you approach potential JV partners is crucial to your success. If you do it in the wrong way, you can cost yourself a lot of money, both in lost deals and in deals you should have never done. You need to screen potential JV partners carefully so you won’t waste your time on unproductive deals. You may contact a prospect who initially sounded good, find out he’s a really great guy, but then also find out he doesn’t have any customers or a product your customers want. Obviously there’s no deal to be made there. Here’s the process I go through once I’ve compiled a list of potential JV partners.
1. “Free Money” Letter- This is really the workhorse that drives all my JV efforts. I’ve included this letter at the end of this report. This simple, 2 page letter, tells my JV prospects how they will make money without any work. It also answers any concerns that might pop up. It’s designed to get them to call me so we can work out the details. I always send it via Express Post so that it gets their attention. I’ve had as high as 33% response to this letter.
2. You offer to do all the work, and send them a cheque—Most JV’s don’t happen because the other party never gets around to doing what they are supposed to. That’s why I always offer to do all the work—otherwise it won’t get done. Also, most business people do have an understanding of how it’s possible for them to do no work and still get paid. Sometimes when I talk to someone who is really smart I let them do part of the work.
3. Sequence of Letters- keep bothering them. Often you won’t hear back from JV prospects when you send the first FREE MONEY letter. This isn’t because they’re not interested. Often they get your letter and mean to respond, but something comes up and they forget about it. That’s why you must keep sending letters to those who don’t respond the first time. Some of my best JV’s have come from people who responded on the third, fourth, or fifth letter. The reason for this is, they have a successful business that keeps them busy. That’s good for me, because it’s much easier to make money with someone who has a successful business. Also, they tend to be a better quality JV partner.
4. Call them- reference grabber; “What’s preventing you from taking me up on my offer of FREE Money?” Often when I send out a second, third, or fourth notice, I’ll put a “grabber” on the top of the letter. A grabber is an item, like a 10 cent coin, or an aspirin that “grabs” the prospect’s attention. It also makes my contacts memorable. If a prospect hasn’t responded to your letter, and they seem like they will make a very profitable JV partner, then it’s worth calling them. When you identify yourself as the guy who sent them the letter with a 10 cent coin on top, they’ll know exactly who you are. Ask them this question: “What’s preventing you from taking you up on my FREE MONEY offer?” You’ll often find they’ll take you up on the spot, telling you they meant to call you, but “something came up.” Some people just need a “nudge.” I don’t call every potential JV prospect, but if there’s someone I really want to do a deal with, I’ll call them.
5. “Is there anything else preventing you from wanting to do this joint venture with me? If not, and we can clear this issue up, then you will feel comfortable doing a deal with me, correct?” If they do have what they think is a good reason for not wanting to do a JV (and rarely do I hear one), then I’ll ask them if there’s any other supposed reasons why they can’t do a JV, and that when I overcome their initial objection, they’ll do a deal with me. If they continue to come up with silly reasons why they can’t do a JV, I immediately forget about them—they won’t make a good JV partner anyway.
What You MUST Ask Potential Joint Venture Partners on the Phone
When you a JV prospect calls you, you must determine if they are someone you want to do business with, and if they have resources that complement yours.
1) What type of business are you in?—This is an important question to ask. You want to know exactly how they are making their money and what type of people they sell to. This will help you determine if they have a product to sell to your list, or customers you can sell a product to.
2) How did you get into this business? (build rapport, get key info’)—This is a good question to ask in order to build rapport. You can also get good information about how they get customers, what else they sell, etc.
3) How many customers do you have the names and addresses of? A very important question. Obviously the larger the list the better. However, even a very small list of customers can produce very profitable results if the business owner has a good relationship with them. What you don’t want to hear is, “I don’t know” or “I don’t keep the names and addresses of my customers.”
4) How often do they buy from you? A customer who buys often is much better than a customer who buys once a year.
5) How much money do they usually spend with you? This is crucial information. If you have a product that sells for $1,000 and their customers spend $40, then you probably won’t do very well. What you want is a list of customers who have purchased a product that is priced close to yours. However, if the business owner has a good relationship with his/her customers, price isn’t as much of an issue as it would otherwise be. I’ve sold $5,000 packages to a group of customers who bought a $29 book, but that’s because the list owner had a good relationship with his customers.
Ideally, what you want is a “sane” small business person with a big list they contact often and have a great relationship with, but under-market to. That’s the ideal situation.
OK, now that we’ve talked about how to find and qualify people to do JV’s with, let’s talk about…
Types Of Joint Ventures
One of the biggest questions I get about JV’s is, “What kind of deal should I make?” The truth is, you are limited only by your creativity. There are, however, a few somewhat “standard” types of joint ventures that work very well. And there is one, overriding general rule of any JV:
Make sure both parties benefit from the deal so you can continue to do deals in the future. Other than that, there are no rules- the types of deals you make are limited only by your creativity.
Both parties have to benefit from the deal. The situation you want is a long-term relationship with a trustworthy joint venture partner. I have friends and JV partners I’ve done deals with for years, and I’ve made a lot of money as a result. That should be your ultimate goal—that’s where the big money is.
Here are my favourite types of JV’s:
1) Endorsed Mailings—An endorsed mailing is the best kind of joint venture you can do. Here’s how it works: Let’s say you find a JV partner who has a big list of customers they have a great relationship with. If you have a sales letter for a product they may be interested in, you’ll want to mail that letter to your partner’s list with an endorsement cover letter. This is simply a one page letter from the endorser introducing you to them, and telling them to read the enclosed package. Endorsed mailings can produce incredibly high response percentages because you’re “piggybacking” on someone else’s relationship. I’ve made a ton of dough with endorsed mailings.
2) List Swaps—A list swap is just as it sounds. You have a list – your JV partner has a list. You both swap lists, and write an endorsement cover letter for each person. Then you are both free to mail to the other’s list as much as you want, as long as the response you are both getting is about the same. You keep all the money you earn, and your JV partner keeps all the money they earned. It’s that simple. I’ve done several list swaps and they’ve worked out very well.
3) Wholesale/Retail—This is a very simple arrangement. One party buys a product from the other party at a reduced rate, marks it up, and sells it to their customers. It’s a simple buy/sell arrangement. I’ve had a few instances where people have purchased large quantities of my products at a discount to resell at higher prices.
4) Consulting Arrangements– Instead of a product, consulting allows you to sell your knowledge on an individual basis. Usually you’ll want to charge a large upfront fee, and then a royalty based on performance. You give advice and knowledge and the other party implements it.
How To Make Sure Your Joint Venture is Profitable
You can do everything right on a JV and still not make money if you neglect certain, key elements. Remember, the whole point of doing JV’s is to make money. Here are the things you need to do to make sure both you and your JV partner make money.
1) If you do the work, then you collect the money—If you’re doing all the work for the JV, then you need to make sure the money comes to you. That way you can be sure you will have a fair accounting. I always make the offer to have orders routed through my JV partner’s office so they know exactly how many orders we’ve received. They never take me up on it, because processing the orders is too much work for them. But you should always make the offer—this way they feel very comfortable with you collecting the money.
2) Percent of Gross Split – NOT Net- know your numbers before you ink the deal- every deal is different, every split is different. Percentage of gross is always the best deal to make. Stay away from percent of net deals… there’s no way to calculate what net is, and it seems like there’s never any net left over. What should the split be? That depends on the numbers. If I’m doing all the work and paying for all the mailing costs, then I take 80% and pay 20%. This is a very fair deal in that my JV partner has no time or money invested, and is getting paid for doing no work whatsoever. Every cent I pay them is net to them. The other deal I’ll do is a 50-50 split on gross AFTER marketing costs are recovered. I’ll do this deal if the other party is contributing the marketing materials and I’m paying for the mailings. This is a very fair deal. The bottom line is, you need to negotiate a deal where you both make money and are happy about it. If a JV partner doesn’t understand why you need to take the bulk of the gross, then just move on. You never want to do a deal where you wind up losing money on what could have been a money-maker if the split was right.
3) Do all the work yourself- don’t rely on the other party. Most JV’s don’t happen, because one party fails to do what they are supposed to. This is just a fact of doing JV’s. It’s not that they don’t mean to, it’s just that they get caught up in other things. I always do all the work myself because if I don’t, I know the JV will never come off and I won’t make any money.
4) Get it all in writing… yourself. Be sure there is an EASY exit clause in your agreement. It’s always a good idea to write your agreements yourself, in plain English. Don’t let a lawyer write it— you want it to be easily understood by both parties. If you get a lawyer involved, it will usually scare away the other party. As a rule, I don’t do JV’s with people who insist upon lawyer-written agreements full of fancy language. That’s asking for trouble. I also always put a clause in my agreements that state that either party may end the agreement for any reason whatsoever. I do not want to be stuck in a Joint Venture that goes bad.
5) Always leave open the possibility of re-negotiation The truth of the matter is, you’ll probably have to re-negotiate some of your JV agreements because the numbers aren’t working out fairly one way or the other. Often there’s just no way to predict what the response will be. If you bring up this fact before you agree on a deal, then it is usually very easy to re-negotiate. If you try to re-negotiate after a deal is signed and you didn’t tell your JV partner beforehand that this might be the case, it can be very difficult. Usually I’ll put in my agreement that both parties acknowledge the fact that re-negotiation may be necessary.
6) Pay all JV partners PROMPTLY and with style. If you want to make a friend for life, pay your JV partner when you say you will, and do it in a memorable manner. Very few people pay on time, and when you do, you really stand out. What I like to do is send them the cheque. They don’t know what to expect when they open the letter, and when they open it to find a cheque from me, it really makes their day. I also enclose a personal note congratulating them on the success of the JV and how I look forward to a long and prosperous relationship. A few days after I send the cheque I send them a box of goodies. If there’s anything people like as much as getting a cheque in the mail, it’s getting food in the mail. This really makes a big impression. Your goal is to develop a long-term relationship with your JV partners so you can do business with them on an ongoing basis.
7) Get testimonials when you send the cheque– This is a huge secret. If you’ll look at the example of the “FREE MONEY” Letter I’ve included, you’ll notice I have lots of testimonials from other JV partners. How did I get them? By simply asking… AFTER I’ve sent them a cheque and goodies in the mail. I’ve never been turned down. And I’ve gotten a lot of JV’s done based on those testimonials. Testimonials are very powerful. If you don’t have any JV testimonials yet, testimonials from satisfied customers are the next best thing.
As we get to the end of this newsletter, I just want to emphasise once again how important JV’s are to your business success. They are the cheapest, least risky way to get new customers and cash in the door fast. JV opportunities are everywhere… all you have to do is look, and approach potential JV partners in the manner I’ve just described.
I’ve made a lot of money with JV’s and there’s no reason why you can’t. You just have to take action, and use what I’ve revealed to you in this report. It’s really that simple.
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Advertising Blog » Professional Copywriting on July 28th, 2009
[...] In fact professional copy writers like Mal Emery have written a lot about emotional marketing and joint venture marketing highlighting the importance of the work done by competent copy [...]
» Professional Copywriting All In One Blog: on July 28th, 2009
[...] In fact professional copy writers like Mal Emery have written a lot about emotional marketing and joint venture marketing highlighting the importance of the work done by competent copy [...]