Joint Venture Your Way to the Top

Joint ventures are a great way to team up with another company or person who are looking to achieve similar goals. By using your existing resources, you can save time and money to achieve your dreams. Before you set up your joint venture, decide exactly what it is you want to accomplish with the project. Are you looking to access additional information and resources? Do you want to tap into new markets or extend your marketing reach? What is it that you hope to accomplish? By having a defined target, you are more likely to hit the “bulls-eye” and create a winning plan.

Joint Venture vs. Traditional Partnership: Benefits

The main difference between a joint venture and a traditional partnership is that a joint venture is normally a temporary or project based arrangement. Because of this dynamic there are significant tax advantages to be realized. First, each member retains ownership of his or her property. Secondly, you will only be taxed on the joint venture profits according to whatever business structure has been established. Additionally, you and your partner can choose to use as much or as little of their Capital Cost Allowance (CCA) claim as you would like.

Let’s use an example of an inventor looking to bring a new product to market. Normally, an inventor will not have the resources and distribution channels needed to mass-produce his product. Thinking creatively, the inventor decides to research manufacturing companies with the capabilities needed to produce his product. By entering into a joint venture with the manufacturing company, the inventor now has access to additional funds, production resources, and distribution channels that would have required months or even years to develop on his own. The manufacturing company in turn has acquired a new product to provide to its existing customer base, thereby creating an additional stream of revenue. Both parties have retained their autonomy in regards to how the profit share is utilized.

Joint Venture Your Company

Suppose you don’t have a new invention to bring to market. Say your company is service-oriented, providing consulting services to the small business sector. Your dilemma is reaching and gaining greater exposure to your target market. How can you accomplish this without spending an arm and a leg on advertising? How about a joint venture with a bank or credit union that is currently servicing your target market? The bank may be able to offer your company’s services as a resource to their customers as a way of helping the businesses they are financing to succeed. Naturally, the bank is interested in the success of the businesses they’re funding and understands that any successful business will have a great marketing strategy. You reach a broader target market and the bank assists the businesses in which it has a vested interest, and you both retain autonomy.

There are a myriad of joint venture opportunities available. You can have great success with this marketing strategy if you’re willing to think outside the box, outline specific goals for your joint venture and follow through on the execution.

Increasing Your Revenues Through Strategic Alliance Partnerships

Strategic partnerships are a great way to increase revenue without significant out of pocket expense. Many small businesses offer a limited product line or service and find that while they have happy customers, their customers don’t need to purchase the product or service on a regular basis, especially when it is not a consumable product.

With that in mind, what can you do with the customer list you already have and how can you tap into more of your target market? Simple. Find another business with the same target market, and partner with them to share the resource of your leads.

For instance, suppose you sell high-end furniture. Since people don’t need to purchase furniture every week, your clients may be happy, but regular repeat business will be difficult to generate. How about partnering with a high-end interior designer who has access to the same market you are targeting? You can make referrals of your clients to the designer, and the designer can offer your product line to her clients. You can take your partnership a step further and include each other’s information on your websites or informational pieces in order to maximize exposure for both businesses.

Another example of a strategic partnership is a small travel agency that approached a luggage store in her city. Both companies look for people who travel. The luggage store was happy to include the agent’s information when they sold a piece of luggage and the agent provided luggage tags to her clients when they booked a trip. Both companies benefited from the alliance and their customers received an additional value added service.

One real estate agent formed a unique strategic alliance with a pizza shop in the area in which he focused on selling real estate. In return for sending business to the pizza place, the agent negotiated a reduced rate on the pizzas he purchased. When a client was moving in to their new home, the agent had a pizza delivered, with a magnet congratulating the client on the move. The magnet included the pizza shop number and the agent’s contact information. The pizza shop was introduced to the new resident, the agent was cemented in the mind of the customer and the customer didn’t have to worry about what to fix for dinner during the move. It was a winning combination that continues to this day.

Strategic partnerships are a great way to move your business forward without significant out of pocket expense. Think about businesses and people related to your industry and decide if there are some strategic alliances that are just waiting to be formed. Then pick up the phone, tap into your business network, and see if there are any warm leads you can pursue. If your network doesn’t turn anything up, pick up the phone and make a few cold calls to see what businesses would be interested in a strategic partnership with you. You may find some that are not interested or who already have relationships in place. This is completely normal. Move on to the next until you find one that works. Then commit to the relationship and watch your business grow.

Increase Consumer Confidence with Joint Venture Marketing

Forming a joint venture marketing partnership can be an effective way to expand your business and gain new clients as it has a psychological component that works particularly well to instill consumer confidence, which will ultimately lead to loyal customers and increased sales.

Tapping Into Consumer Psychology

Psychology plays an integral role in all business marketing. Studies have proven time and time again that people will buy just about anything, as long as it is well marketed and effectively advertised and that consumers are prone to purchasing items they don’t really need or often cannot afford. Inspiring people to make such purchases is marketing genius and can be enhanced through a joint venture marketing partnership.

Consumer confidence is one of the largest determining factors in purchases they make, and psychology is one of the largest determiners of consumer confidence. Thus, understanding the role psychology plays in marketing can help boost the confidence of consumers who purchase your products and services, leading to increased sales for your company.

Using Joint Venture Marketing to Increase Consumer Confidence

Forming a joint venture marketing partnership is one way your company can reach consumers on a psychological level, increase their confidence, and form a tight community of loyal clients. Keep in mind, people like to feel significant, needed, and important, so if a customer feels his business is truly important to you, this will inspire his confidence to purchase from your company. If you reinforce this feeling of importance, you create a snowball effect, where the more important a customer feels he is, the more confidence he will have for your business. This increased customer confidence of course translates to increased sales for your company. Understanding this psychological mechanism of the business/client relationship will put you on track to forming strong and long lasting relationships with your customers.

Joint Venture Marketing Taps Into Buying Psychology

Forming a joint venture marketing partnership influences consumer buying psychology in many ways. Here are a couple of examples:

• Working with other companies and sharing ideas about how each of you handles customer service and consumer confidence will create new and exciting ways to reach a previously untapped consumer base, benefiting both companies involved in the joint venture.

• When your joint venture partner gains some of your clients and vice versa, you create a community of clients that you both share. These customers are now part of an elite group of clients that you and your joint venture partner can target and market to in ways that you couldn’t when they only belonged to one of you.

Both of these points are important to understand when tapping into the psychological nature of human beings if you are to be successful at utilizing this knowledge to improve your company’s sales. You can use this understanding to your advantage. Don’t regard it as manipulation, but simply smart business psychology. These psychological influences are at work all around us in everyday life. Human beings are naturally wired this way, and understanding this is not the same as manipulation.

A joint venture marketing partnership that focuses on consumer psychology makes targeted suggestions based on buying habits and behavior, which is a win-win situation: it makes the consumer feel understood, and it has to potential to increase your business!

Joint Venture Marketing – Creating a Loyal and Profitable Community

The current economic downfall has had a huge impact on Internet business, and many small companies are struggling to survive. Consumers are spending less and less money on non-essential items. If your business specializes in luxury goods or services not vital to everyday survival, you may find yourself in a difficult position.

To maintain, or in some cases even save your business during these difficult economic times it may be necessary to get creative with your marketing strategy. A joint venture marketing partnership may be just the thing you need to explore to keep your business humming along.

Creating a Loyal Community for Your Business

Marketing’s primary focus is creating client relationships. In a time when people are feeling stressed and disconnected as a result of current economic turmoil, holding onto your customer relationships, and building new ones is more important than ever. It is possible to maintain your customers and gain new ones during a challenging economic time, but this will involve creating a sense of community among your customers, as well other businesses with whom you work. A joint venture marketing partnership can help you achieve this, even if you don’t get the immediate results. At the very least, you will lay a foundation for future customers and preserve your current and loyal customer base.

Consistent customers are the bread and butter of any business. The customers you count on to make regular purchases, even if they’re small, add a measure of stability to your business. All companies dream of the “big sale”, but these are often few and far between. So, it’s the smaller steady purchases that will keep your business going in a world currently plagued by financial woes

The Power of Joint Venture Marketing

The benefits of a joint venture marketing partnership are twofold.  First you create a new community of business partners which function to strengthen your existing customer base. And second, it enables you to reach new customers in varied and creative ways you otherwise wouldn’t have access to.

When your joint venture marketing partner makes contact with one of your regular customers, it is crucial for him to know that you referred your partner. This equals an endorsement from your company as to the status and importance your partner plays in the function of your business. It is a thoughtful and personal way to reach out to some of your most treasured clients. To do this successfully, you may not want your joint venture partner to approach every single one of your customers. That would feel inauthentic.

To truly build the feeling of a community with your customers, they need to know that they are getting personalized attention, thoughtful consideration regarding their purchases and that you are taking into consideration what other products they may be interested in. Likewise, through your joint venture you are endorsed to your partner’s customers, who will in turn perceive that your company offers a community of services and products that are geared towards their interests.

Taking the time to create a feeling of community with your customers, as well as your new joint venture marketing partners, will help your business successfully sail through these difficult economic waters.

How To Use Joint Ventures to Benefit Your Advertising

A joint venture is a business enterprise by two or more persons or organizations that share resources, expenses and profits for a particular business project. As we have previously mentioned, a joint venture can be formal or informal. In the case of most small businesses, informal agreements are the most common.

How to Incorporate Joint Ventures into Your Business Plan

What are some practical ways to use the concept of joint venture marketing to benefit your business and that of the company you are partnering with? Begin by examining any area of your business that you would like to keep costs to a minimum, yet receive maximum return on investment.

One of the major areas I hear complaints about is the cost and return ratios with advertising. My suggestion to remedy this problem is to consider a joint venture agreement with another company to share the cost of advertising. You can accomplish this in many creative ways.

• Split the cost of advertising with your joint venture partner. For instance, a coffee shop and a hair salon located in the same building might decide to do a customer appreciation day to help drive additional traffic to both locations. In this instance, you and your marketing partner save money by splitting the cost of advertising while both companies receive the benefit of increased traffic and a lower cost for the ad, even though they have businesses that are not in the same industry.

• Co-op ad dollars with your suppliers. For example, a small heating and air conditioning company runs an ad that lists a particular brand of equipment. The supplier of that brand will pay for 80% of the advertising because they know the small company is promoting and servicing their product. The small business operator kicks in the other 20% and gains the exposure he needs in his community without all the out of pocket expense. It’s a winning combination because both companies benefit. Understand that it may take a while for you to build a relationship with your suppliers before they are willing to look at joint venturing with you, but taking the time to prove yourself is well worth the effort.

• Share available free advertising resources. Example, a small gas station joint ventured with a small car dealer. The car dealer placed vehicles for sale on the gas stations high traffic lot, and the gas station owner got exposure to the dealer’s customers for the mechanical services he had just begun offering through his station. The arrangement had no out of pocket expense for either business, but both of the owners report benefiting from the agreement.

There are many ways to creatively leverage the concept of joint venturing in business. Think win-win and create a scenario that works for you!

Benefits of Joint Ventures

A joint venture is a partnership where businesses come together and share knowledge, market information, and profits. Joint ventures come in all shapes and sizes. The good news for small business is that large companies see value in partnering with smaller companies due to the small company’s ability to maneuver quickly in the marketplace, while providing specialized expertise and unique market insight. A small company can be a valuable joint venture partner to a large corporation; so don’t be afraid to think big when you think joint venture.

Benefits of a Joint Venture

• A joint venture with a larger corporation can shorten your learning curve when it comes to developing new products and gathering market intelligence for strategic market expansion.

• A small business can also glean information regarding the implementation processes and procedures that will improve productivity. Learning from companies who have already been around the block a time or two can significantly save time and money for the small firm who is ready to grow and willing to listen to the expertise of a larger company.

• A joint venture can be a source of additional resources and capital for you. Not only does partnering with a larger more established company enhance your credibility, but it can also open doors to resources and funding that were previously unavailable.

One small company, who successfully partnered with industry giants, was Mello Smello. An unknown husband and wife team partnered their unknown company with 3M and Disney to create scratch and sniff stickers of Disney characters. The end result was a multi-million dollar business. Not only were there additional monetary resources, there were additional sales resources and distribution channels that would have taken years to develop if the husband and wife team had chosen to go it on their own.

Tapping into Joint Venture Resources

A significant resource that should not be overlooked as a benefit of a joint venture is the additional marketing resources that become available. Whether you’re a small business partnering with a larger company or a small business partnering with another small company, chances are you will have the opportunity to promote your product or service to a customer base that you were previously unable to access.

All business is essentially broken down to the cost of obtaining a paying customer. By tapping into your joint venture partner’s customer base, you dramatically shorten the customer solicitation cycle, which can translate to huge savings in advertising and marketing.

Not all joint ventures have to be multi-million dollar deals. Joint ventures between small businesses with similar or the same products and services can serve to free up much needed resources. For instance, say there’s a tradeshow in which you would like to participate, but the exhibit fee is a bit too much for your marketing budget. By forming a joint venture with another small business in a related or similar field, you can both save money and expand your potential market by jointly attending the tradeshow.

Look to create a joint venture that offers benefits to both parties, and you are sure to reap the rewards!

Joint Venture Marketing: A Low Risk Endeavor

A well crafted joint venture marketing partnership is a simple, low risk way to boost your market visibility and grow your company sales and customer base during these difficult economic times. Because of this low risk, a joint venture marketing partnership it is a win-win endeavor for all parties involved.

Low Risk Trial

Most joint venture marketing partnerships require very little risk, and often no formal legally binding contract in order to sample the effectiveness of the new partnership. While there are no guarantees the partnership will deliver the results you are looking for, it is worth experimenting with and can be executed in such a way as to minimize any potential long term problems.

A joint venture marketing partnership can be performed on a very small scale and without a formal contract, making it fast and easy to implement. The easiest way to test a joint venture marketing partnership is to align your business with only one other company to start with. Ideally, you’ll want to partner with another company who is also looking to start a small joint venture marketing experiment, and a company who is comparable in size to yours.

Identify Goals and Trial Length

Once you identify a company with which you would like to partner, the next step is to discuss the particulars of your arrangement and determine what each of you is looking for from such a partnership. You’ll also want to be sure that you have the same goals in mind for the length of time for which you will try out the partnership. You may want to agree to three months, six months, or even a year, depending on the size of your company. The size of your business will have an effect on how quickly you notice a change in your customer numbers and profits after implementing your joint venture marketing partnership.

Generally speaking, a larger company will notice a run in their sales and customers rather quickly because they have a larger base to begin working from. Therefore, when two medium to large sized companies engage in a joint venture marketing partnership, they may need only a three month trial period to assess if the joint venture is worth pursuing. A smaller company may require up to six months or even a year to truly assess the effectiveness of their joint venture marketing partnership.

Whatever length of time you decide to use as your trial period, one of the most attractive features of a joint venture marketing partnership is the low-risk involved and the ease with which you can initiate the process. Once you agree to a mutual vision, you do not necessarily need to involve an attorney for a legal agreement, but you will want to put something in writing to protect both of your interests. This will ensure both parties are clear on the terms to which they are agreeing. You can draft an informal agreement that will be legally binding should anything digress, without involving the services of a lawyer.

Understanding the Core of Strategic Partnerships

The definition of a strategic partnership is “a formal alliance between two commercial enterprises, usually formalized by one or more business contracts, but short of forming a legal partnership or, agency, or corporate affiliate relationship.”

Whew! Does it really have to be that hard? Absolutely not. You form strategic partnerships all the time without even realizing it. A strategic partnership simply takes the resources that a person or company has to offer and combines them with equally valuable, but differing resources in order to save time, money and energy.

The Easy Analogy of Strategic Partnerships

Have you ever borrowed something from someone? A power tool, a ladder, something you didn’t have, but didn’t necessarily want to spend your time and resources acquiring because you weren’t sure you would need to use it that often? Well, that’s a simplified form of a strategic alliance. The neighbor provided you with a resource you didn’t have or necessarily want to acquire based on the premise that you would reciprocate the favor in some fashion at a later time.

Typically, when two companies form a strategic partnership, each business has a particular asset the other company isn’t interested in spending time and energy developing. For example, manufacturing companies will form strategic alliances with designers and inventors. The manufacturer provides the raw materials, production costs, and distribution channels, while the inventor or designer provides creative and technical expertise. This is a win-win situation for both parties because it saves time and money, while allowing each party to focus on what they do best.

Finding a Strategic Partnership Balance

Strategic partnerships are often seen between companies who are in the same industry, but who are not in direct competition with one another. For instance, a small car dealership may develop a strategic alliance or partnership with a bank that offers auto financing. The dealer wins because he doesn’t need to be licensed for loans and the bank wins because they receive customers they did not have to actively solicit.

Think about service and product providers in your industry who are not in direct competition with your business. Who offers a product or service that could be beneficial to your business that you don’t have the time or resources to develop and what would be an area of your business that could be beneficial to their company?

In one example, a company that specialized in marketing strategies developed a strategic alliance with a design firm because they included collateral development as part of their service. The marketing company did not want to develop their own design department as they felt it wouldn’t be cost-effective given their strategic niche. The design firm on the other hand, often had customers looking for more comprehensive marketing strategies than what they offered. Obviously, this was a strategic partnership that worked well for both companies.

Take a look at your business and begin to think about areas that are not your focus, but for which you continually hear customer requests. Next, find a company that services that particular niche. You may need to “try out” a company or two before you find the right fit, but when you do, it will have been worth the time and effort.

Psychology of Joint Venture Marketing

Psychology plays an important role in most consumer purchases, and the psychological effect of a joint venture marketing platform is no exception to this rule. Psychology is at play subconsciously in so many areas of our lives. Have you ever noticed how most supermarkets are organized in the same way? There is a floor plan for how to run a successful supermarket, down to the optimal lighting and the temperature at which the supermarket should be kept to maximize consumer purchases.

When you are in a supermarket, and looking for a specific product, it may seem that products are organized somewhat haphazardly, but this is not the case. Products are organized in such a way as to inspire you to buy items that you did not intend on purchasing when you entered the store. The checkout line is the best example of this: how many of us have picked up a magazine, gift card, candy bar or pack of gum we didn’t really need, simply because we were standing in line and those products were there. This is consumer psychology at its best!

Consumer Psychology at Work in Joint Venture Marketing

You may be thinking, that makes sense, it sounds easy enough to capitalize on consumer psychology when you have customers walking through the door, but I have an online business, not the same thing at all! True, with your online business, you don’t have the benefit of customers walking through your doors, but you have something that when used to your advantage can be even better: you can go to your customers, reach them at home or on the road via emails - increasing access to your clients to a point where you don’t have to wait for them to come to you!

America was built on creating opportunities, and most Americans appreciate businesses that take initiative and create opportunities: it is the American way. But there is a fine line between creating opportunities and being invasive to your clients. Americans are also busier than ever in their lives, so bombarding them with countless emails and solicitations that convey the same message will most likely serve to alienate potential clients, rather than gain them. These are aspects of psychology of which it is important to be aware when running your online business.

Creating “Friendly” Marketing

A joint venture marketing partnership can help bridge the gap between effective marketing and invasive marketing, helping you gain the right balance to assertively attract new customers without being overbearing.

With a joint venture marketing partnership, you can piggyback with your partners on marketing tactics, such as customer email alerts and newsletters. With the joint forces of your marketing partnerships behind you, you can capitalize on the principles of consumer psychology and reach multiple customers on various levels without making them feel overwhelmed. If for instance, a certain customer buys from both you and one of your joint venture partners, you can attach advertisements or reminders to a “thank you for your purchase email” and remind your clients of your appreciation for their business without being invasive by sending unnecessary correspondence.

Two Types of Affiliate Marketers and Why You Need Them Both as Marketing Partners

If you are thinking about using an affiliate marketing program for your business, it might be wise to understand more about who the typical affiliate marketer is. Generally, affiliate marketers are entrepreneurial types who tend to take risks; they typically do not mind a trial and error method of succeeding in business. The early affiliate marketers were the first to take advantage of new trends and wanted to try to leverage new technologies on their behalf. You might think of affiliate marketers as the pioneers of Internet word-of-mouth marketing.

The growing popularity of Affiliate Marketing

However, affiliate marketing has become more mainstream as people continue to search for supplemental income and “work from home” options. The popularity of blogs, personal websites, and online communities such as MySpace and Face Book continue to make affiliate marketing a potential opportunity for the average person to create passive income. Because technology is so readily available, it seems that affiliate marketing really has two main types of affiliates:

• The Casual Affiliate: This is an affiliate who is passionate about a product, service, or cause and will seek out companies who have a similar outlook. Many bloggers become affiliates by default, using affiliate programs like Google’s AdWords. Many of them feel that if they are going to take the time to blog, it might be nice to get something in return. This type of person is not attempting to make a full time income from affiliate marketing.

• The “Super” Affiliate: These are the people who generate $10,000 or more in commission per month. They are also people who have experimented with various forms of marketing. Much of their promotion of a product or service is via Internet marketing, but super affiliate marketers may also incorporate traditional forms of advertising as well. For instance, an affiliate marketer may have a website or a blog, but he may also send postcards or letters to his database on occasion.

Motivating Affiliate Marketing campaigns

The power of the affiliate marketer lies in his willingness to be paid for actual revenue generated for whatever company he happens to be promoting. Many new affiliate marketers adopt a sweat equity attitude, hoping to build a revenue source online that will ultimately work while the affiliate sleeps. It is a new way to do business and create income, and the early adopters are showing that it can be done. A new business model is emerging as the result of affiliate marketing, and any business owner would be wise to take note.

Overall, affiliate marketers see themselves as a strategic link between a company or product and the people that company hopes to reach. Most affiliates are resourceful and innovative. They often become students of Internet marketing by default, but as their commission checks grow, they find new ways to promote more products and services. There are even affiliate networks available for those new to the industry. When supplied with ample incentive, affiliate marketers can become one of your most cost-effective assets.

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