joint venture marketing
Everyone in business knows that the list is where it all begins. With a roster of contact information for potential customers, you can transform those names to loyal clientele that pays your bills and boosts your profit margin.
One of the most effective ways to build your list without spending a fortune is through joint ventures. We’ll show you how to use these strategic alliances to build customer lists any small business owner is sure to envy.
Cold Lists vs. Warm Lists
The cold list is a roster of potential customers that you buy or rent from a company that specializes in such services. You don’t know any of the names on the list, and more importantly, none of the potential customers on the list are familiar with your business. Cold lists typically boast about a 2% return. This means that for every 1,000 individuals on the list that you contact, you can count on about 20 sales. When you consider the cost of renting the list, you can see why this return doesn’t offer as much value as most small business owners would like.
Now consider the warm list. This is a list of customers who already have an established relationship with a particular business. If that business becomes your joint venture partner, you automatically have access to the names on the list as well. You didn’t have to spend any money to rent the list of names from a service, as the names were provided as part of your joint venture agreement.
Now consider the difference in returns between customers who are already familiar with your JV partner and those who don’t know your business at all. Your rate of return suddenly skyrockets from 2% to 24%!
The warm list is obviously the more attractive choice because in addition to the customer contacts you receive, you also get an endorsement from a company those customers already enjoy shopping with. If they trust your JV partner, they will be more likely to trust you as well.
Since statistics show that the initial contact with customers will make all the difference in whether they transform from first-time shoppers to loyal clientele, you can see the value of a warm list is really exponential. In addition to receiving customer contacts, you are getting an instant positive reputation with every name on your list.
Giving in Return
Bigger companies with established customer lists may have a number of advantages in mind when they enter into a joint venture with a smaller company. Your new products and services give the larger company a chance to broaden their product base without the expense of developing new products themselves. They might also want a portion of your sales in exchange for their list. With the huge customer growth you can expect from a warm list, the commission you pay out will pay for itself in a larger customer base and bigger profits.
The secret to a successful business lies in the list, where it comes from and how it is put together. By cashing in on the established, successful list your JV partner has built, you can explode your customer base and your profits relatively quickly and inexpensively.
christian fea is CEO of Synertegic, Inc. A joint venture marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.
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