I want to talk about one of the quickest and smartest ways I know of to make money both on and off the net. It 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. JV 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 JV 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 JV’s 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 JV 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 JV Dealmaker 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 JV 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 JV 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 JV”: Another income stream!
WHO IS A POTENTIAL JV 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 JV, 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. P.S. 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 VENTURE PARTNERS?
Depending on what you want to sell, here is what I suggest for targeting potential JV 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 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 JV 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 downloading 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: http://www.goldbar.net/lsa/c.cgi/jhinds_umr2
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 CAN YOU MAKE MONEY FROM JOINT VENTURE’s?
Each party can make money from JV’s. Here’s how:
ENDORSER:
1. Take a cut of the front end: 50% is the norm but I have seen deals where endorsers require as much as 90% 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 Endorsers Payment:
Insist on a contract. These can be easily obtained from the internet and then modified to suit your purpose. However, you should have a lawyer review it first.
Take the payment yourself and send the endorsee the order and his cut.
Ask the endorsee to set up an affiliate code for you so that you can track hits and sales from your endorsement.
ENDORSEE:
1. Give away that front end money: This might sound crazy but it is a proven strategy that does work. Have a back end product/service or several backends ready to work soon after you have the new customer name.
2. Offer new products to your new customers.
3. Set up affiliate software and only work JV’s with people with huge lists: Affiliate scripts can be set up very easily using software that assigns a unique tracking number to your JV partners (essentially your salespeople) and allows them to refer prospects to a sales letter that contains their own unique code. This code allows them to track all sales credited to their referrals. Big money idea!
4. Have a non-disclosure agreement ready before you enter into any deals: If you do not know what these are, non-disclosure agreements are contracts that insure that any proprietary concepts that you reveal remain private and between you and your potential JV partner.
JV BROKERS:
1. Look for potential candidates for deals and make introductions: Explain and educate both parties on what a Joint Venture is and the potential earnings. Take a percentage of the profits off the front end and possibly the back end.
2. Help with copywriting: A lot of clients you put together will have absolutely no clue how to write a sales letter. Help write it or recommend someone who can and take a percentage of the copywriters fees.
HOW CAN YOU HARNESS THE POWER OF THIS POTENTIAL BIG WINNER TODAY?
Network. Meet people. Always be on the lookout for deals.
If you are someone who wants to get started quickly in business, create a product and set up an associate program and then roll out your targeted email campaign to get JV partners.
If you are interested in making money from a list, keep the names of anyone who buys from you or requests information from you. You now have your own list. This list is a valuable commodity, use it as such.
If you do not have your own product to advertise, find one with reprint rights and purchase it. Now the reprint rights allow you to produce and sell the product as if it was your own.
As a JV broker, try to set up a mailing list and offer deals to everyone on the list. Educate people. Let them know how much money stands to be made from these deals.
Here is a famous example of an offline JV. Mike Enlow had a pharmacist who hired him for consulting. The pharmacist had a very large customer list and always sent out Christmas cards to his list every year. Mike arranged a deal where the pharmacist would mail his list at Christmas but instead of sending out the same old Christmas card, he had the pharmacist recommend (endorse) a neighborhood jeweler.
But, notice the way that he had the endorsement structured. The pharmacist told his list that if they brought that letter to the jeweler they would receive 20% off of any item in the jewelry store. The jeweler would not lose any money since their markup is so high and furthermore he would receive new customers.
The pharmacist got a cut of the profits and so did Mike Enlow. I believe they made in excess of $75,000 dollars in a week!!
Can you do something like this? Can you marry two operations together and structure a great deal? I think anyone can and there are opportunities everywhere. Can’t think of any?
HOW ABOUT THESE JOINT VENTURE IDEAS?
Get a chiropractor to endorse a gym. He could send his customer list a free trial membership at a gym and anyone who joins can get a 10% discount off the membership fees.
Have a local nursery recommend a landscaping company. Create a mailing to the nursery’s customer list and offer them 20% off the first use of a local landscaper.
That was easy huh? How about online:
Find someone who has developed software but has no idea how to sell it online and offer to set them up with an ezine publisher whose audience would go crazy over that software. Have the publisher take payment for the product and get the product fulfilled electronically.
You can’t beat this. Another twist on this concept is to offer trial or demo versions of the software so that people get hooked and want to buy the full version. The ezine publisher takes the payment and the Software company sends out an unlock code (a numbered code that allows unrestricted use of the software).
In all of these deals the JV broker has made money just for bringing these other parties together. This is what is known as a win-win-win situation.
Can you come up with some potential JV’s now? I would be very surprised if you could not. Simply open up your yellow pages and thumb through and see who you could put together. Give it a try. If you get stuck drop me an email through the site below, and I will try to help.
This concept cannot be beaten!! And I do believe that anyone can do it.
So what are you waiting for? Get out there and start making those deals!!!!
Written by Marc Goldman – Since 1999, The Ultimate Marketers Resource
has been the only system enabling you to manage EVERY aspect of your
business from Autoresponder services, Mailing List management, Lead
Generation, and Ad Tracking, to Viral Marketing and much, much more
remotely from anywhere in the world, anytime, from any computer for a
low monthly fee. Click here to learn more before your competitors do:
http://www.goldbar.net/lsa/c.cgi/jhinds_umr2
