Consider Using a
Host-Recipient Alliance
Or Joint Venture

Host-recipient alliances or joint ventures are a massively overlooked marketing strategy which enables businesses to quickly and economically reach new customers.

Hopefully this information will inspire and help you to set up your own joint venture and reap the benefits.

Imagine this…..

I am a business or profession that has been operating successfully in your market sector, not in competition with you, but selling my products or services to the same type of customers. How could I help your business grow?

For instance, you own and run a Tyre Fitting business. I run a car accessories shop in the same town. I’ve been running my shop for ten years, and by continual advertising in local papers and on local radio, I have built a customer base of 6,000 people.

Wouldn’t you almost sell your grandmother to be able to access my 6,000 customers, all of whom you know drive cars, and are active in improving, customising, or repairing their cars and offer them your Tyre services whenever they need replacements?

If you did, you’d be virtually guaranteed to create a new stream of buyers for a fraction of the investment, time and energy you’d normally have to put out by going to the open market to acquire new customers.

Let me give you another example:

Say you own a high quality restaurant. Your clientele is typically made up of business managers, professionals, and quite affluent local home owners.

What would you give to get the opportunity to access the members of the local golf club, customers of the finest suit retailers, luxury car showrooms and up-market jewellery shops in your town and have permission to send them a beautifully postured, impressive invitation to come and dine at your restaurant for the first time?

If you did, it could well be worth many thousands or tens of thousands of pounds to your turnover in the coming months and perhaps be worth hundreds of thousands of pounds to your revenues over the coming years.

This is the power of a host/recipient alliance or joint venture

To make sense of why alliances are highly profitable, and can accelerate your business forward very quickly, you need to grasp two simple facts that you probably are already aware of but might not yet have linked to the benefit of alliances:

1. The most difficult, expensive and time-consuming activity you ever perform in business is acquiring new customers or clients.

This is because in most cases you have to initially attract them, then gradually nurture them, then reduce or eliminate their purchase objections, then seduce them into finally biting the bullet and trusting your promise enough to accept your initial offer to buy whatever it is you’re selling. Generally the more expensive your product or service is, then the longer this process can be.

2. Response rates are better if they know and trust you. Research has shown that when an offer is made to a cold audience (potential customers who don’t know you) you’ll probably receive between 0.5% – 2% response.

But when you make an offer to your existing, current and past customers or clients, a very different scenario unfolds – a very much higher percent will generally respond – 4%, or 7% or sometimes 15 and 20%.

So for the same cost of marketing to your existing customers or clients, who know you, you typically receive 4 times – 40 times more response than from a list of potential customers who don’t know you.

Therefore, by you simply forming an alliance with another non-competing organisation in your particular business sector and by having them recommend your product or service to their clients, you gain a similar, considerably higher response from their clients than if you sent the same offer out to the cold market.

Why would a potential host company be motivated
to form an alliance with you?

Well, first, your product or service must be seen by the host as delivering a valuable benefit, or advantage or result to their clients. Yours must therefore be a complimentary product or service.

For example, a dentist should look to opticians, osteopaths, chiropractors, chiropodists. Also health food shops, health and fitness clubs, beauty salons. Any of these categories should look to any of the others as potential hosts, or recipients.

Or if you are a good quality furniture retailer, you should approach estate agents, carpet suppliers, carpet cleaners, kitchen installation companies, building companies who do extensions, bathroom suppliers and fitters, window companies – any category of company that first, is complimentary in nature, all to do with home improvement and enhancement, second supplies quality product and a high level and reliable service.

I don’t care what category of business or profession you are; there are organisations you can form alliances with. All it takes is a little research, talking with your network of contacts or better still, approaching organisations you already have a working and trusting business relationship with.

Some of the best alliances you can have are with client companies or suppliers that you know, respect and trust, and vice versa. These are the easiest and quickest alliances you can set up because trust already exists.

It is crucial that the host knows and values your product or service so they are happy to recommend it to their customers.

What is the benefit to your host?

If what is being offered is free and seen as highly beneficial to the host’s clients it can create a lot of goodwill for the host, particularly if the offer is carefully worded to indicate that the host has instigated and arranged it.

If your selling a product or service it makes sense to offer your host a handsome commission or profit share of any sales.

A question that is frequently asked is, is it ethical for a company to recommend a product or service when they are sharing in the profit from every sale?

My answer is that it is ultimately unethical NOT to make a broader range of high quality products or services available to your customers or clients, knowing they would be of benefit, and that your recommendation is all they need to feel secure in purchasing that item or service.

Your goal always is to form long-term, meaningful, trusting business relationships with every customer or client. If that’s the case, then you soon come to realise that many of your clients have other requirements, wishes or needs in their lives.

Just remember, it doesn’t have to be complicated…

If you run a small coffee shop for example, you could create simple free coffee and cake certificates that you distribute to say a kitchen utensil retailer, clothes shops, toy shops, and book shops. All busy traffic retailers that will spawn a steady stream of shoppers all glad for a free coffee and cake after they shopped.

I’d recommend you then capture each person’s name and address for a prize draw, and start mailing offers and price advantages, and new cake and quiche offerings, and lunch boxes. This is likely to be very profitable, at hardly more than a couple of hundred pounds cost.

To put this strategy to work in your business…

Firstly, list ten or twenty types of non-competitive but kindred type organizations you can approach.

Second, approach them with your idea, and explain it to them fully because they won’t understand, they’re not thinking strategically, like you are now.

Third, follow it through and persist, don’t give up just because you get a few ‘no’s. If you approach twenty or fifty or a hundred potential alliance partners, I promise you’ll secure ten or twenty or thirty percent, and you’ll enjoy and greatly benefit from the increased streams of sales and profits your partnerships spawn.

Remember, the key is to be flexible in your negotiating. There are no rules. You can arrange what you like, as long as there is tangible benefit to all concerned.

Host/recipient alliances take a little effort to arrange. But that effort pays BIG dividends!

Common-Sense Marketing supports and provides marketing advice to small and medium sized businesses. If your business is ready to grow and would like some marketing help and advice to make it happen call Sally Stanton on 01692 538800 or email her on sally@common-sense-marketing.com.