This is a quick video showing how fast a video can hit page one of Google. Online video is one of the best ways for a local small business to compete online–it gets rankings and builds your brand. In this video, I show how I repurposed a TV commercial for online marketing for an Arizona-based plumbing company.

Search engine optimization is a must for any business and mission critical for small local businesses. It gives one of the best returns on investment of any marketing medium. Online video marketing does SEO, but it also builds brands and attracts customers. Check it out…

Update: Video is ranked Number 1 on Google for Peoria Plumbing.
In less than 48 hours!

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Thanks to Joe Polish for teaching me all about 24-hour free recorded messages.

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STRUCTURING YOUR JOINT VENTURE
Part 2 in The Art of the Local Business Joint Venture gets us into the guts of a JV. I’ll cover partners, pitching, revenue sharing, your product/service offer and follow-up. If you have any questions, just leave it in the comments section and I’ll be sure to respond. I hope to do a Q&A post for Part 3 of the series.

WHO MAKES A GOOD JV PARTNER?
In Part 1, I mentioned the Before, During and After of a prospect/customer’s buying process for your product or service. This can encompass other products, services or information they need to make a purchase with you either before, during or after. To be of the utmost value to your prospects and customers, you need to know what those things are. This can lead you to companies you wouldn’t have automatically thought of when contemplating a JV such as one of your vendors.

The other aspect of choosing a JV partner is picking non-competitive industries that share the same customers. As in Part 1, I mentioned residential services partnering with each other to expand their businesses.

Lastly, and the really big factor in choosing JV partners is “can you trust them.” Will they provide a great service or product to your customers? Will they fulfill their end of the partnership? And will they pay you ALL of your share of the revenue? This goes both ways. They will need to be able to trust you, too. Make sure you can prove trustworthiness for yourself and your potential JV partners.

PITCHING A JV DEAL
Once you have an idea of who you want to joint venture with, you need to approach them with your idea. If you know the people in charge, great…call them on the phone or meet them for coffee and lay out the JV in plain English. If you don’t know them, then I recommend you get to know them. Even buy from them to make sure they will treat your clients with respect. Get to know some of their customers. What if their customers are unhappy or just marginally happy or worse, bad customers? You don’t want to get a bunch of miserly, complainers for customers who end up making your life a living hell. You probably already have a few of them and who wants more, right?

When pitching, know what outcome you want. Are you wanting to offer the partner’s products to your customers, offer your products to your partner’s or both. Know how much you can afford to share. This will be covered in more detail a little later. Don’t go into the meeting without a plan already drawn up. You don’t want your JV partner to get confused. Confused people don’t buy and they don’t partner, either.

I recommend you pay for all marketing costs to your partner’s customers. Don’t make your partner work…at all. It’ll kill, or at the very least, slow the deal. When pitching the partner’s products to your customers, you should get that person to pay for any materials, postage, etc or get a large enough percentage to cover those expenses. But in all of this, don’t get greedy. Make it a win for you and a super win for your partner. It’ll do great things for your reputation and most importantly, the deal will go a lot smoother.

GIVE & YE SHALL RECEIVE OR HOW NOT TO BE GREEDY
I’ll say it again–Don’t get greedy. When getting your products offered to a partner’s customers offer as much as you can afford. Knowing the Lifetime Value of a Customer is very important to your success. If you are offering 10% of the revenue and you can afford 20%, you’re being greedy. Let me make this more concrete.

I once did a JV with a pest control company where I offered $200 for every customer of his that signed up with my company. With partial payout at signup and the rest at the end of three months service. The way the numbers played out, with people dropping before the end of three months, those who dropped service after (which were very few), my cost per new customer from the JV was a little over $250, which was the annual profit from a service customer. I wouldn’t make a profit from service till the next year. Thankfully, I could expect a customer to stay for over five years. Also, I had additional services and products to sell, so in reality I typically made a profit within six months of acquiring a new customer through a joint venture.

It is really hard for another service company to turn down $200 per customer just for making a recommendation. Your numbers will vary, but it is vitally important that you know them–at least an approximation–before you commit.

IT”S ALL IN THE OFFER
Your offer needs to be irresistible. That means whatever you are selling must be so good that the customer would be a complete fool not to take it. By the way, this also makes your JV partner look completely awesome to her/his customers. Since I don’t know what your business is I can’t give you a specific offer to run with, but here’s how I brainstorm:
1. I try to think up what the deal of the century would be for my type of business. I think about what I could bundle together and sell at a discount and what services or products I could give away just for trying my business.
2. Run the numbers. Ideas may sound great, but if you can’t afford to do it you can go broke trying.
3. Test the offer to see just how compelling it is. You can run a test ad in a neighborhood paper or HOA newsletter to see if you get a decent response. If you know your JV partner well enough, do a test run to a segment of her customer list and see what results you pull.

TO GO OFFLINE OR ONLINE?
This is an easy one. Should you use email or a letter in the mail? Do you or your JV partner have an email list of customers? Yes? Do an email campaign and a letter in the mail. No? Start building an email list and send a letter in the mail. Also, if there is a retail location, give out a sales letter to people in the store or restaurant. Told it was easy to decide.

FOLLOW-UP IS CRUCIAL FOR LONG-TERM SUCCESS
Here is where many people fall down. Follow-up will do three things. 1. it will increase your total response, 2. it will make sure your or your partner is providing great customer service and 3. it makes it easier to track the revenue.

The one area I’m going to talk about is increasing response. Many people send out one email or sales letter or worse some lame-ass boring brochure and that’s it. Let’s say you get 2% of the people who received your offer to become customers. If you follow up with another sales letter, you’ll probably double your response or get a total of 4%. If you send another letter, you’ll probably add another 1%. (your percentages will vary so use for illustration purposes only)

The important lesson is to keep sending your offer till it isn’t profitable anymore. Once someone buys remove him from the list of prospects and put him in your ‘JV Purchased’ list and start the customer service follow-up. Those who didn’t buy get letter #2 and so forth.

That’s the basic structure of a local business joint venture. Please add any comments or questions. In this short 2-part series, I obviously couldn’t cover all the details nor can I offer any specifics without knowing about your business. Just add your comments or questions and I will do my best to answer them.

~ Tim Conley

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How to Triple Your Revenue in Less Than a Year

In a recent talk, I mentioned to the audience that they needed to be doing joint ventures with other local business owners.  Unfortunately, I didn't have time to really discuss what a joint venture is, how to set one up and how to do a bunch of them every year.

Joint ventures (JVs) are very common in the information marketing world, especially online.  Technology and high margins make it a breeze for people to create sales really, really fast.  Offline, well, JVs don't get much attention.  I guess they're not sexy enough, but they work great.

What Is a Local Joint Venture?

A Local JV is when business owner A (or manager) gets business owner B to promote A's product to B's customers for a percentage or fixed split of the revenue.  This can be reversed where A promotes B's product to her own customers.  JVs are not always about adding new customers, but always about adding revenue.  

It tends to be easier to get a customer who knows, likes and trusts you to buy more of what they need and want than it is to acquire a new customer.  I say this because too many business owners focus on getting new customers as opposed to earning more from the ones they have.  When thinking about doing a JV make sure you don't forget the needs and wants of your current clients.

A good way to look at it is to figure out what they buy before they buy from you, what they buy in conjunction with what they buy from you and what they buy after purchasing from you.  This will show you the product holes in your business.  Note: you don't have to ever fill these holes with your own product or service, but there is no reason to not earn some dinero by filling in these gaps with other people's products.

I'm off my tangent now.

So, a JV is two or more businesses promoting one or more products for a cut of the revenue.  From experience, many small local businesses tend to favor you promoting their products to your customers versus them promoting you to their customers.  I always try to make sure we promote each other's products or services.  It is a win/win for both since each side gets new customers and increases their revenue per customer.

Monetization

This talk of revenue brings me to one of the attendees of my presentation.  She got super excited to create a JV so she came up with a postcard idea that sounds pretty good.  She told me her idea and I asked if she was going monetize the promotion.  She looked at me quizzically and said, "What do you mean?"  

Here's the thing.  It's not a JV if you don't make any money or at least don't intend to make money.  Promoting someone else's business can be a service to your customers even if you don't make money, but doing something like that should be in an email newsletter where it doesn't cost you anything.

I didn't want to discourage her initiative so I didn't bring up the other flaw in her JV idea.  She is intending to promote the wrong businesses.  She doesn't know they are the wrong businesses, though.  Don't worry, I'll be seeing her this week and will try to change her mind.

Picking The Right JV Partners

The reason she has the wrong businesses in mind is because they don't have anything to do with her Before, During and After of her customer's buying process.  Or a simpler way of saying it, "They aren't related to what her customers have already purchased from her or why they purchased from her."

I had owned a swimming pool service company and did several joint ventures with other home services companies.  This is the best type of JV.  We all had the same type of customer: homeowners who had enough income, but not enough spare time to do tasks around the home.

Think about it.  To get inside someone's home, you have to develop a lot of trust to get the customer.  Once you have that trust, you can expand into providing for their other needs without actually doing the work.  If you had a housekeeping service, you could get income from carpet cleaning, auto detailing, swimming pool maintenance, and much more just by being the referral source for your client.

If you have a restaurant, do a JV with a nearby dry cleaner.  Every article of clothing could have a coupon for an entree' or bottle of wine or pitcher of beer, etc.  You then pay the dry cleaner a percentage of the revenue that is generated.  If you don't want to track results for the dry cleaner, just pay him an advertising fee.

A jewelry store could JV with a flower shop or bridal store or wedding planner.  Someone comes in to buy an engagement ring, you have a perfect opportunity to earn income from the rest of the "getting married" process.

Obviously, these examples, and the thousands of other industries I haven't mentioned, could be reversed.  A flower boutique could JV with a jewelry store.

Scaling, Leverage and Multiplication

The real power in doing joint ventures with other local businesses is when you do at least one per month.  And don't tell me you don't know at least twelve other businesses in your area who share the same type of customer.  If you don't, then start building your network.  If you're a small business owner you should be interacting with your community, your chamber of commerce and a couple of networking groups.

By scaling, leveraging and multiplying your JVs you could grow your business exponentially and do so at very little upfront cost.  Granted, it shouldn't matter what the cost is if you're making a profit, but that's another pet peeve I have with some business owners that I'll rant about some other time.

When you do a JV with a business, you should promote their products or services if possible and that business should promote your products.  And you should do this several times per year.  

Over the course of a year, you will gain new customers and so will your JV partner.  These new customers will benefit from the JV, too.  Also, many current customers won't take advantage of the JV offer before the deadline ends.  Maybe they didn't open the letter they got or they weren't ready to buy for whatever reason or maybe the need for the offer arose after the JV offer deadline.

I would recommend that you do follow-up JVs quarterly.  This is long enough that current customers don't get numb to the offer and short enough that you can offer your new customers this opportunity.

When doing JVs you should be giving your customers at least one offer per month.  Oh, and take advantage of doing holiday offers, too.

Stayed Tuned for the Next Installment of How the JV Turns

In Part II of The Art of the Local Business Joint Venture I will go into the structure of a JV, how to pitch a JV to another business and what kind of revenue split you should have.  And if I do a Part III, which is highly likely, I hope to do a Q&A post so please ask a ton of questions in the comments.

Cheers,

Tim Conley

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Please put any questions you have on joint ventures for local businesses in the comments.  I will be sure to include the answers to your questions in the series and I'll answer you personally, too.

Joint Ventures are one of the most powerful marketing tools a local business can use and very few people ever talk about them.  I want to make sure I give you the best introduction into JVs I can.  

I hope you enjoy this series.

Part I of The Art of Local Joint Ventures will come out tomorrow.  See you then.

Tim Conley

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