Joint
Venture Marketing - The Most Powerful Marketing Method Ever
Invented
By Marc
Goldman
One of
the quickest and smartest ways I know of to make money both
on and off the net is called Joint
Venture Marketing. Some of you may already have experience
with this marketing method while to others it may be completely
foreign.
For those
of you who are familiar with it, bear with me, I am not going
to simply recite the same facts over and over again; and for
those of you with no prior knowledge of this concept, I think
that you are going to be very, very pleased with what you learn
today.
Joint
Venture Marketing just may be the most powerful marketing
method ever invented. It is the strategic use of a companies
underutilized assets to make profits that they did not make
before. Underutilized assets are those assets that a company
has and yet does not use, the most common of which is a companies
customer database or their list.
You see,
most companies (if they are smart) maintain a list of the people
who have bought from them. This list could also be of potential
customers, those individuals who have expressed some interest
in the company's products and/or services in the past.
This makes
them stand out from someone who has never contacted the company
before. In the Direct Marketing Business, we call these people,
PQL's or pre-qualified leads. They have raised their hands and
said in effect: "I am interested in what you have to offer;
tell me more".
Most companies
do not realize the value of "the list". It is a golden
rule in marketing that once a prospect becomes a customer they
should be considered a customer for life. You can sell to those
customers over and over again because you have already established
trust. (This is assuming that you only sell quality products,
if you sell quality products and provide great customer service
you will go a long way in creating a lasting relationship with
your customers).
This trust
is a key element in Joint
Venture marketing. Joint Venture marketing involves the
recommendation or endorsement (keyword remember that) of another
marketer or their product to your customer list. Assuming that
I own a list and another marketer contacts me and asks if I
will endorse their new product to my customer list, we arrange
a deal where I send a mailing to my list endorsing this person
or their product.
This endorsement
contains two key elements:
1. The
trust between the list owner and their previous customers/prospects.
2. The product/service of the other party.
The list
owner is recommending the new product/product owner to their
list. Referrals are everything. I have seen and read examples
of this kind of endorsement marketing bringing in unheard of
sales percentages for the product owner.
The reason
for the high sales percentage is based on the fact that this
is a warm list.
What that
means is that the list owner has already established a relationship
with the people on his/her mailing list. They trust the list
owner. In contrast, you have a "cold list". This is
one that has never heard of the person mailing to the list.
Most likely that person rented a list of names from a list broker
and is just mailing blindly to a list that neither knows nor
trusts him.
Can this
endorsement really make that much of a difference? How about
going from 2% of sales to 24%.
Let's explain
it like this:
You rent
a list of 1000 names and send them a sales letter selling a
product for $40 dollars and you receive back $800 dollars (20
sales). That is a 2% return. That is the industry average for
returns on cold lists.
You get
endorsed by the person who owns that same list and has a relationship
with that audience, and you receive $9600 dollars (240 sales).
That is a 24% return. Can this happen? Oh yes, it depends on
the list, the owner, the sales letter and how targeted a market
the list members were.
Can you
see the difference between an endorsed mailing and a cold mailing.
This is extremely powerful stuff. You are leveraging the power
of the list owners relationship with his mailing list to bring
in insane profit margins. Even more important, the list members
who bought from you are now your customers and you have every
right to add them to your own very powerful list.
This is
a way to grow your own customer and prospect list very quickly.
Let's break
down the roles of each person involved in a Joint
Venture and see why they would want to participate.
1.
The Endorser
This is
the list owner. Why would a list owner want to give their powerful
endorsement of someone else to their list. It is simple:
a) To make
money: When you endorse someone else's product to your list,
you do so for a percentage of the profits. 50% is the norm.
However, you have the right to demand as much of a percentage
of the sale as you want and here is why. The person being endorsed
is gaining new customers for his/her list. They will make money
from this list in the future and you will not see one penny
of it!! You should capitalize on the profits made now.
b) To look
great to a customer list: It is extremely time consuming to
constantly create new products. So, instead of creating your
own products, you can find other entrepreneurs offering high
quality products that you like and either already use or are
willing to begin using and you strike up a deal. When you recommend
other useful, helpful, high quality products to your audience
you look like a hero in their eyes. Think that your customers
will listen to you again in the future? They sure will!
c) To test
the responsiveness of your list: This is a good chance to see
what your customers want to buy. If they buy the product that
you endorse, that is a good indication of what they will buy
in the future.
2.
The Endorsee
This is
the person gaining an introduction to the list by having the
list owner endorse his/her product or service. You may be wondering
why this person would ever want to give up a huge percentage
of his/her profits simply to be introduced to a list.
a) You
as the endorsee have now gained new customers without spending
advertising dollars: Let me clarify one thing first: In offline
Joint Ventures you may have to cover the cost of mailing your
sales letter. However, the lifetime value of a customer far
outweighs the cost it took you to get that new customer. For
instance, you may now mail future offers to that client yourself
(including the most important offer of them all: The Back End).
b) You
can make more profits with a Joint
Venture than you ever could mailing to a "Cold List":
You can piggyback off the credibility of the list owner.
There is
potentially one other person in this deal and this could very
well be you right after you read this. So pay close attention
as this is an incredible way to make money:
3.
The Joint Venture Deal Maker or Broker
This is
a person who brings these two parties together and takes a percentage
of the profits created out of nothing more than a list. Why
would anyone do this?
a) To make
obscene profits simply for being able to bring people together:
I look at it like this, these people you bring together do not
have any idea what kind of profits they are sitting on. As a
Joint Ventrue broker
you arrange the deal and educate the prospects and all you ask
for is a share of the profits. I think 15-20% is fair.
You DO NOT
CHARGE ANYTHING UPFRONT. This will kill your chances of making
the deal and if you do make a deal for money up front you could
be missing out on a much higher percentage of the profits.
Some of
the true masters of the Joint
Venture deal, Mike Enlow and Jay Abraham, refuse to take
anything upfront for brokering these deals. This not only increases
their credibility but furthermore, when they insist on taking
a percentage of all profits made off the deal including backend
sales it makes them very wealthy!!
b) To get
referrals for this kind of consulting so that you begin to get
calls for educating others in the "Art of the Joint Venture",
another income stream!
Who is a Potential Joint Venture Partner?
Anyone!!!
But, there are a few things that each potential partner must
bring to the table:
The potential
endorser should:
Possess
a large list. It is all well and good to have a list of 100
names but we are trying to make money folks. I suggest that
the list should not be smaller than 1000 names and they should
be 40% (400) paying customers.
Be well
known in the industry. I have a few industry friends who are
true players, these guys have very large lists. If I wanted
to Joint Venture,
this is who I would go to first. You see, their recommendation
will go a very, very long way and their word is often gold to
their customers and contacts.
Handle
the mailing (on the net, the bulk emailing) for the endorsee.
Since the endorser is the one who has the relationship with
their list, they would have a better idea of the type of content
that would evoke the greatest response from their audience.
The endorsee
should:
Have a quality product/service that the list owner has no problems
putting his valuable reputation behind. You are asking them
to risk their credibility on your product or service. It had
better be good!
Offer all
the fulfillment of the product unless this is something that
the endorser wants to handle.
Handle
all the payments to the endorser so he/she has nothing else
to do other than send out the endorsement. In some cases it
may be best if the endorser handled the payment, sent the endorsee
his cut and the endorsee took care of fulfillment. This is one
way to avoid getting ripped off. Remember, you don't always
know what these people are like (especially online).
Have the
list owner write the endorsement as they may have a particular
writing style that their list is used to and any deviation from
that may decrease the potential for sales.
How Can You Get in Touch With Joint Ventur Partners?
Depending
on what you want to sell, here is what I suggest for targeting
potential Joint Vevture
partners. I am going to stick to the net here as most of you
will be doing this online. However, later in the article you
can find a few offline ideas you can work as well.
1.
You should network
Get your
name out there and let people know that you are a potential
player. Go to the forums and participate!! Get your name known.
Participate in mailing lists and let people see your signature
file. Get your name known!!! I can't stress that enough. It
will make you more credible when you approach one of the big
guns and request a deal.
2.
Research potential Joint Venture partners by doing a search
for them using the Search Engines
This is
one of the most underutilized methods ever to seek out JV partners.
Here is what you want to do. You want to visit search engines
and find the people who come up under your targeted keywords.
Let's say that you want to sell a book on figure skating. I
would suggest that you go to the top ten search engines and
put in the keyword phrase: "figure skating".
Visit the
first 10 sites that come up and contact the owners to find out
if they are interested in working a Joint
Venture with you. Make sure they are not selling a product
that is competing with yours.
However,
this could prove quite time consuming so I suggest you automate
the process by clicking
here to download this FREE software called Copernic. It
will visit the search engines for you and give you the most
relevant sites that come up on all of the 10 search engines
under your chosen keyword.
Once you
find these sites you will need to contact the owner. Here is
a great way to find out who owns any web site in which you are
interested. It is called a "whois" search. You can
perform a whois search on any web site by clicking here and
typing in the web site name.
Once you
have their names and email addresses, you are going to want
to contact them all. This could be a very tedious process if
you have a lot of contacts. You could contact them all individually
so that it is more personalized.
However,
you should try to minimize the amount of time that you spend
on administrative tasks so you can concentrate on marketing.
I suggest using a specialized email client that will let you
send out personalized email to your list without sending each
message individually.
I use and
highly recommend The Ultimate Listserver and you can find out
more about it by clicking here: www.goldbar.net
Come up
with an email that explains your concept and inquire whether
they would be interested. Many marketers may not understand
the art of the Joint Venture and you may have to spend some
time educating people about what it can do for them. This is
something that will come easier and easier with time.
How You Can Make Money From Joint Ventures?
Each party
can make money from Joint
Ventures.
Here's
how:
ENDORSER:
Take a
cut of the front end, 50% is the norm but I have seen deals
where endorsers require as much as 700 of the profits! This
can be done because the endorsee will make so much money from
the back end and subsequent offers that they are willing to
lose money on the front end in order to get that valuable customer
name.
Here Are
Some Tips To Insure The Endorser's Payment:
