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Leverage Your Way to Profits With Joint Ventures

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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 tons of questions, and I'll try to answer them all.

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.


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. We'll come to that 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.

There will be plenty of opportunity for you to check this out later.

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.

Copyright 2004 Russ Shearer


About The Author

Russ Shearer shows how to leverage the powerful resources of the big-wigs with Joint Venturing.

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