Joint Ventures: Using Other People's Customers to Get New Business

What would you say if I said you could create an endless stream of customers with very little risk and investment on your behalf? I am talking about joint ventures, that is, using other people’s customers to get new business. Firstly we will cover what a joint venture is, and some examples of how a joint venture could work. This is a very simple and effective marketing approach that will benefit your business greatly.  Then we will teach you the steps to creating your own joint venture.

What is a joint venture?

A joint venture is a partnership between you and another business helping each other to make profits. Also known as a strategic alliance, it is about developing a special offer and getting a company with a related product or service to present the offer to their customers, ultimately resulting in a win, win situation. Joint ventures are about gaining access to new prospects with the permission and cooperation of the business that acquired those customers in the first place; that is, sharing common customers.

For example say your business is a gym. You help your customers get fit and stay healthy. These customers also purchase products from other businesses of related products. For instance your customers are also most likely to purchase products from complimentary businesses such as

• Athletic shoe and apparel stores
• Athletic equipment providers
• Chiropractors, Physios, Podiatrists,etc.
•Sports channel advertisements
• Health-related mail order catalogues
• Health-related magazines and books
• Health food and nutrition stores
• Sports events
• Health-related television providers

Now you’ve decided to work out a deal with the health store across the road. You offer to give away discounted gym membership to any of their customers that spend over $80 in the store. You benefit as you have now gained access to a number of new customers. The health food store benefits as their customers are encouraged to spend over $80 and feel that they are receiving a good deal.

Examples of how a joint venture could work

•    Video store giving vouchers to all the local take away stores
•    Hardware store giving brochures for local tradesmen or running DIY classes run by local tradesmen
•    A joint venture between a hair salon and a beauty salon
•    A new bar getting taxi drivers to talk about their bar and handing out free drink cards
•     An accountant recommending a lawyer
•    A car salesman giving away free gift vouchers for a discounted car service at a mechanic shop
•    A real estate agent recommending a mortgage broker
This list is limitless and you can event have joint ventures with unrelated businesses.

Benefits of a joint venture

There are many benefits of a joint venture. Such as, it ensures you target the right customers, it is cost effective marketing and it results in high conversion customers as a result of the referral.

Steps to organising a joint venture

Step 1 — Understand how much you can make from the venture so you can use this to explain the potential revenue your partner could make.

Step 2 — Make a list of potential complimentary or related products and services. Don’t leave out products or services that aren’t necessarily related in which your customer might still be interested.

Step 3 — List all the businesses that that sell those products and services. Then introduce yourself to through a letter asking if they are interested in making money with little effort.  Make a follow-up phone call to set up the appointment.

Step 4 — Present a compelling fact-based case for a joint venture. You might even mention that you have a call in to one (or two) of their competitors to present the potential venture to them as well.

Step 5 — Deliver on what you promise with integrity, honesty, ethics and enthusiasm.

Tips on approaching a potential joint venture partner

The best way is to take a simple “show them the money” approach. Do this by giving them a simple proposition. “Mr(s). Business Owner, I have a ton of customer each week spending money on products/services like yours and I'd like to create an arrangement where I can send them all your way."

This will hook them in. However, they may be a little sceptical on this “too good to be true offer”. All you have to do is calm their nerves by advising them that your product is none competitive to theirs, the venture will not harm or take away their profits and that you will do all the work.

Ensure that the venture is a win, win situation where is beneficial to both of you.

You should provide a discount or incentive as a unique, customer-only private offer. This will make your partner’s customers feel as though partner is doing them a favour by arranging a special promotion just for them.

Overcoming potential problems

Objection 1 - If your potential partner does not feel comfortable having you interface with their customers tell them that this is fine it actually works better if they deal with their customers on your behalf. Advice them you are willing to do all the groundwork and that you can arrange to meet periodically to review how everything is going.

Objection 2 – They are unsure your proposal will make them money. Offer to start with a pilot test with a small number of customers to see that they are happy with the process and the outcomes. Also check if the feedback from the customers is positive.

As a business owner you should always be looking at ways to improve your business. A joint venture is a very accurate, cost effective marketing approach that easily gains you new customers. Through understanding that a joint venture is when you and another business go into a loose partnership to help each other make extra profits, you will able to follow the 6 steps to creating your own joint venture. Then through considering the Tips on approaching a potential joint venture partner and overcoming potential problems you should be well on your way to improving your customer numbers and increasing profits.