By Russ Shearer
Hi Fellow Marketer
You can't conduct business on the internet for very long
without hearing the term "Joint Venture", but do you really
understand them or how and why a Joint Venture works?
In broad, simple terms -- a Joint Venture is partnering with
others to create a win/win situation for everyone involved.
But just what does that mean? How do you identify a good
Joint Venture situation? How do you structure the
partnership so that everyone wins? How do you approach a
potential Joint Venture partner? There are scads of
questions, and I'll try to answer them all over the course
of these articles.
At the very heart of Joint Ventures - what makes them work,
and why they are more effective than other marketing
strategies - is something called leverage. At the end
of this article, you should understand leverage and have a
number of ideas about how you might incorporate Joint
Ventures into your own marketing strategy.
Joint Ventures are a way to leverage someone else's money,
customers, opt-in lists, marketing muscle, credibility,
products, influence, whatever - to create benefit for both.
The most sought after benefit is probably immediate revenue
and profits, so the first few examples will concentrate on
those. But, your aim might be to:
increase your subscriber base, increase brand awareness in a
new market, reduce or share certain costs, gain valuable
information or skills, etc. so later, I'll explore some of
these, too.
The examples are just intended to spark your imagination.
Whatever you do, don't be limited by them. They are just
examples!
Most joint ventures are unique, and the best joint ventures
will be created by applying your own imagination and
creativity to form the best win/win situation for you and
your JV partners.
First, let's look at the most common Joint Venture
opportunity on the internet.
Affiliate Programs:
Some will debate that there has to be some exclusivity, some
limited number of partners - to qualify as a Joint Venture.
I would direct you to the definition I gave above - and
contend that an affiliate program satisfies that definition.
Besides, affiliate programs provide us with a very well
understood example of the relationship between the partners.
If you choose to limit the definition for your own purposes
... fine - but let's make use of them as a common frame of
reference.
With the typical affiliate program, there is a single
benefactor and as many promoters as possible. The owner of
a product (benefactor) sets up an affiliate program in order
to leverage the customer and opt-in lists, and the
recommendations of the promoters (affiliates) to sell more
of the product.
The merchant benefits through sales to web surfers,
newsletter subscribers, etc. that he would otherwise have no
way to contact - through the direct marketing efforts
(including recommendations) by each affiliate.
The affiliate benefits by letting the merchant supply the
sales copy, order fulfillment, and customer support - and,
of course, through commissions on each sale made as a direct
result of their promotions.
Those are the immediate, tangible benefits. There is more.
The merchant also collects contact information from each
buyer, as a part of the ordering process. This allows the
merchant to build their list of responsive contacts, so they
can market to them directly in the future. They might even
upsell additional products at the back end of the ordering
process.
The affiliate also strengthens the relationship with their
readers, past customers, etc. by virtue of having
recommended a worthwhile product to their leads.
So both have leveraged the assets of the other to their own
benefit.
Now let's look at a variation of the affiliate program.
Let's say a merchant is readying a new product for the
market. They have built the basic sales and order pages,
but want feedback from others (a review) and need
testimonials for the sales page to help convert leads to
sales (even the gurus face this - no man is an island).
Product Endorsement:
You'll realize very quickly that the affiliate program is just a form of the Product Endorsement
Joint Venture that we'll talk about now, so hopefully we
have taken a commonly understood form of internet marketing
and will begin now to expand the scope, and your
understanding.
In the Product Endorsement Joint Venture, the merchant might
approach a "smallish" list of known marketers with a Joint
Venture proposal that provides them a free copy of the
product to use and review, and an opportunity to be one of
the first to recommend the product in the marketplace (once
everything is ready for product launch).
The Joint Venture between the merchant and these marketers
can be structured in many ways (in fact, each may be
unique), but let's just play out a typical scenario for the
purpose of an example.
First, the merchant is going to want maximum exposure and
the most professional marketing he can get - so the
"smallish" list will typically be a list of "super
affiliates" that have demonstrated their ability to get
their prospects to "click thru" to the sales page. For the
most part, the merchant is also going to want his
testimonials to come from recognized names - so this same
list of "super affiliates" probably meets that criteria, as
well.
OK...
The merchant approaches his list of potential JV partners
with a free copy of the product, and gets the badly needed
testimonials for his sales page in return. The JV partners
will get additional exposure from having their testimonial
on the sales page for the merchant's product. Not a bad
deal for either, so far - but the whole package carries a
lot more value for both.
Everyone who reviewed the product is also now in an ideal
position to give a recommendation to their list, and
(assuming they have the trust of their past customers or
readers) should be able to direct a significant amount of
traffic to the merchant's sales page. But why would they do
that???
Well, besides making sure he is offering a worthwhile (and
in demand) product - the merchant can offer premium
commissions for any sales that are the direct result of the
JV partners recommending the product, and can let them
promote before the product is released to any other
affiliates.
The merchant probably has to give up a larger percentage of
each sale to get these recommendations, but they will
produce many more sales than an affiliate simply pasting a
banner on their web site. That's not a gamble, it's a
certainty!
In return for the personal recommendation, the JV partner
gets a higher commission, and early promotion rights (before
the market is flooded with competitors making the same
offer).
You could be either party in this partnership (many of the
product gurus also make a fair amount promoting others'
products).
So, now ... let's assume the merchant is YOU! "But, I don't
know any super affiliates!", you say. Later.
Or maybe you don't see yourself creating unique products and
dealing with order fulfillment, customer service, etc. If
you are satisfied marketing others' products, maybe all you
need is to get in on some of those "super affiliate" deals -
so you get some of those first promotion rights.
The above example is one of the more common ways to
structure a Joint Venture, and product promotion brings the
most immediate return - but you can partner with others in
many other ways, so we will explore those in another article.
Related Articles:
Leverage Your Way to Profits With Joint Ventures
How do you identify a good
Joint Venture situation? How do you structure the
partnership so that everyone wins? How do you approach a
potential Joint Venture partner?
How to Create Powerful Strategic
Alliances
How can you reward your network? How can
you do so on a consistent basis? And how can you turn your
network into a networking system? The answer is by developing and
establishing a network of strategic marketing alliances.
Faster Sales With Joint Ventures
What is the quickest way to making fast profits on the Internet?
Setting up joint ventures with established Internet marketers
could be your key to real profits.
