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This article was co-authored by Michael R. Lewis. Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. He has over 40 years of experience in business and finance, including as a Vice President for Blue Cross Blue Shield of Texas. He has a BBA in Industrial Management from the University of Texas at Austin.
This article has been viewed 12,477 times.
A joint venture (JV) is a business strategy wherein two businesses agree to promote each other's products or services for their mutual benefit. An endorsement is a type of marketing where a business has an outside entity, like a celebrity or another business, promote the benefits of their product or service. Joint venture endorsement marketing combines these strategies by creating agreements between businesses to endorse each other's products to their customers. Many businesses find that this strategy results in a large increases in sales when implemented properly. Use the following steps to set up a joint venture endorsement deal for your business.
Steps
Part 1
Part 1 of 3:
Locating a Complementary Business
Find another business owner who has a list of clients who are in your target market. In order to make your JV successful, you're going to have to work with a business that targets the same market as your business does. Try to look for businesses that serve the same niche, or an overlapping one. Alternately, you could use the JV as a way to test your success in a different niche. Just make sure that the customers of your JV partner would be interested in your product.[1]- When searching for a JV partner, you are not looking for a competitor, but a complimentary business that sells a different product or service to the same demographic you seek. For example, a landscaping company may seek to work with a nursery.
- To locate JV partners, you can start by networking and getting your name out there. For example, try posting in relevant online forums regularly, attending industry events, and always look for opportunities to talk about your business.
- You can also find partners by using search engines to search for keywords that relate to your business. Look for businesses or blogs that are close fits to your product and contact them about partnering up.[2]
Make sure the other business has enough contacts to make the endorsement worthwhile. You'll want to find a business with a large mailing or emailing list where they can endorse your product. Or, you can work with a popular website or blog that reaches a large amount of daily or monthly readers. For offline JVs, look for a partner with a large customer base. Whichever one you choose, find business owners who have huge lists of readers or recipients. A list or prospective customer base of 100,000 people is worth more than a smaller list (with all else being equal). Even if 3 percent of readers of your product's endorsement buy it, that's still 3,000 people.[3]- For example of an offline JV marketing strategy, a popular nursery could set up signage around the facility about the landscaping service and have employees promote the landscaping to customers when they check out.
- Other offline endorsement options include in-store signage and advertising, along with joint media advertising.
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Assess how strongly the business's mailing recipients or customers trust the business owner's opinion. Find list owners who have excellent relationships with their recipients and customers. The stronger the relationship, the stronger the endorsement. The stronger the endorsement, the more money you will make. For example, cold emailing from a purchased list might lead turn 2 percent of the recipients into customers. However, a targeted list in the hands of a trusted endorser can lead to a much higher sales percentage.[4]
Avoid suspicious businesses. Never partner with people who have shady businesses or with people who give you a bad feeling when you are in contact with them. If they give you any reason at all to mistrust them, back out immediately.[5]Advertisement
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Part 2
Part 2 of 3:
Earning Their Endorsement
Contact the business owner. Once you've identified business or websites that you would want to partner with, you'll have to find the names and email addresses of their owners. Most reputable sites will have this information available. If it does not, simply use the contact form on the site or search online for information if you can't find on the site. Once you have a list of names and email addresses, send out a personalized email to each owner proposing the partnership.[6]
Be direct about your intention to ask for an endorsement. In your email, explain your JV proposal, including who you are, what your product or service is, and why you think your business is a good fit for theirs. There's no need to get into anything personal here, and certainly don't sound desperate for customers, no matter how dire your business situation is. In addition, make sure you explain what you have to offer them in return.[7]
Allow them to try your product or service for free. Your goal is to make sales to the partner's customers, but you'll have to convince that partner of your worthiness first. After all, the business owner has worked to gain the trust of their mailing list or readers, so they will want to make sure that the product or service works as advertised first. Send them a free sample or trial of your product or service. You can also lend it to them for the purpose of a review and then receive the product back after a set amount of time (this may be necessary if you sell a very expensive product).- Before sending your sample or trial, be sure your product or service works as advertised. Otherwise, the partner will never endorse it and you will be wasting everyone's time.[8]
- If you are doing in-store joint venture marketing, make sure your partner's employees are capable of explaining and using your product. You may have to train them yourself to make sure that this is done correctly.
Explain the benefits of your JV proposal. The endorser (your partner) may have to be convinced that partnering with you is in their best interest. For your part, you can offer them a commission on additional sales that you make as a result of the partnership.[9] In addition, they can use the endorsement to increase their own standing among their readers for endorsing a great product. They can also use the endorsement and subsequent sales figures to gauge their customers' and/or recipients' interests and purchasing habits, which can help them make future business decisions.Advertisement
Part 3
Part 3 of 3:
Structuring an Endorsement Deal
Agree on a shared profit percentage. The endorsee (you) will usually pay a commission to the endorser for endorsing their product. This commission is a percentage of additional profit created by the endorsement. For example, the commission may be 50 percent of the profits before tax to be equitable. Make sure you and your partner agree on the commission before proceeding.- The additional sales created by the endorsement are tracked using a personalized affiliate link or code. These codes can be set up using affiliate software.[10]
Consider endorsing their products or services in return. If they also have a product or service to market and wish to access your own customers, you can offer an exchange, where you provide a similar service to them. Add this into the contract the same way you would the other agreement.[11]- Before endorsing to your list, be 100 percent sure that the product or service is of very good quality, or it will hurt your reputation, and may cause you to lose subscribers to your list.
Create a contract. The most important thing you can do for your JV is make an official contract. Start by searching for JV templates online. These can be customized to meet your needs. Make sure to get all agreements and terms you have made down in writing. In particular, pay attention to what each side is responsible for contributing or paying. This can help you avoid money troubles later on.- You should also include provisions for expanding or ending the relationship in the future, depending on how your relationship changes over time.
- Show flexibility in negotiating terms, and expect your partner to do the same. This will create goodwill between you.[12]
Remember that getting your business name out can be more important than making profits. If you have entered into a JV with a larger or more established business, you will need their endorsement more than they need your business. For this reason, don't let poor terms or a high commission stop you. The eventual increase in your recognition and sales will be well worth the money you didn't earn from endorsement sales.[13]Advertisement
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References
- ↑ http://stuartjdavidson.com/joint-venture-marketing/
- ↑ http://www.entrepreneurismbible.com/joint_venture/kb_joint-venture-marketing.htm
- ↑ http://www.entrepreneurismbible.com/joint_venture/kb_joint-venture-marketing.htm
- ↑ http://www.entrepreneurismbible.com/joint_venture/kb_joint-venture-marketing.htm
- ↑ http://www.earlytorise.com/9-strategies-for-successful-joint-ventures-2/
- ↑ http://www.entrepreneurismbible.com/joint_venture/kb_joint-venture-marketing.htm
- ↑ http://stuartjdavidson.com/joint-venture-marketing/
- ↑ http://www.streetdirectory.com/travel_guide/160411/marketing/5_endorsement_marketing_secrets.html
- ↑ http://www.successwithease.com/5-powerful-ways-to-leverage-joint-venture-partners/
- ↑ http://www.entrepreneurismbible.com/joint_venture/kb_joint-venture-marketing.htm
- ↑ http://www.streetdirectory.com/travel_guide/160411/marketing/5_endorsement_marketing_secrets.html
- ↑ http://www.earlytorise.com/9-strategies-for-successful-joint-ventures-2/
- ↑ http://www.entrepreneurismbible.com/joint_venture/kb_joint-venture-marketing.htm
About this article
Michael R. Lewis
Business Advisor
This article was co-authored by Michael R. Lewis. Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. He has over 40 years of experience in business and finance, including as a Vice President for Blue Cross Blue Shield of Texas. He has a BBA in Industrial Management from the University of Texas at Austin. This article has been viewed 12,477 times.
Co-authors: 15
Updated: May 6, 2021
Views: 12,477
Thanks to all authors for creating a page that has been read 12,477 times.
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