As a business owner, it can be very easy to fall into the trap of thinking that other companies are either competitors, suppliers or wholly irrelevant to you but the latter is not always the case and smart business people realise this and take full advantage; now it’s your turn.
You see while many businesses are so unrelated to yours that you can ignore them, there are others which are in the same general sector and could be considered as complimentary. Forming joint venture partnerships with these companies can be a very valuable way of attracting more customers and earning additional revenue.
Example 1: The Garage & The Car Wash
Imagine, as a customer, you have just visited one of those hand car wash companies to get your motor cleaned and, while you are making payment, they give you a small business card showing their recommended garage; on this card is a code entitling you to 25% off a service if you book within the next week.
If your car needs servicing (which most do on a yearly basis), then 25% off might well be tempting enough for you to make that booking.
Through this arrangement, the garage gets a regular supply of new customers and the car wash will usually receive a small commission for every one they refer. The garage can give this discount because their marketing costs for these new customers are virtually zero while the car wash is able to add a new revenue stream with almost no effort on their part.
It could even work the other way with the garage recommending the car wash with a similar discount in place. It is optimal, however, if the value of the service being recommended is high because the size of the potential savings for the customer are then enough to elicit immediate action.
The lesson here is that when you know the exact needs of a customer (every car needs servicing) then the conversion rate on the cross sell is likely to be high.
Example 2: The Hair Salon & The Tanning Shop
Women, and increasingly men too, spend a fortune on beauty products and services so it makes a great industry to form partnerships in.
Consider your local salon; while the bigger ones might have their own tanning booths, most won’t and this opens up a joint venture opportunity which can definitely work both ways.
Much like in the first example, once a customer is ready to pay, cash or credit card in hand, they can be given a coupon entitling them to a significant discount at the other establishment which is valid for the coming x days.
Putting a time limit on the discount coupon is as simple as one establishment writing the expiry date on the card when it is handed over. Putting a time limit in place can actually force a customer to buy more of something than they would have otherwise done.
Think of it this way, if you have just had a session on a tanning bed and are told that you can get 20% off at the salon down the road if you book within the next week, you are more likely to take advantage of the offer even if you weren’t planning on having a cut just yet.
The lesson here is that people love a bargain and will try to take advantage of one even if it’s not the optimal time for them to do so.
Example 3: The Accountant & Just About Every Other Business Service
Some businesses are lucky enough to cover such a broad range of customer needs that they can form multiple joint ventures to earn themselves additional revenue – small business accountancy is one of these.
For small businesses, their accountant is one of the people they communicate with the most and the accountant will know the workings of the business quite well based on what he sees coming through the books. This knowledge gives the accountant the ability to tailor the offers he presents to his clients which prevents it from appearing too pushy.
Say a small business has a website but no real traction in the search engines. The accountant can identify this with a simple search of his own and he can then ask the business owner whether or not they have thought about the benefits of top search engine rankings. If they say they would like to appear first but don’t know how to go about it, the accountant can recommend an internet marketing company who may be able to help.
If they don’t even have a website then the same could be applied to a web design company.
If they move to a new, bigger, office then he might even consider recommending the top cleaning company in the area at a discounted rate for the first 3 months.
If played the right way, the accountant could even let his clients know that should they need any services for their business, they should come to him first because he has negotiated discounts with a broad range of companies to save them money. This way he doesn’t even need to be proactive with his recommendations, his clients will come to him as and when they require something.
The lesson here is to be creative with your potential joint ventures – some businesses might be able to partner with just the one company while others might be able join forces with several.
Get Started Today
Partnering with other local companies is a great way for you to expand your business both in terms of customers and revenue. Joint ventures are also very low risk because there is no upfront cost – the discount you give is only applied once the customer is in the process of paying you.
What’s more, most business owners are likely to be open to the idea of joint ventures because they need new and repeat custom as much as you do and if you explain the benefits and the virtually non-existent risk factor then they’ll see they have nothing to lose.
What are you still doing reading this, haven’t you got doors to knock on and local business owners to talk to?
- License: Creative Commons image source
Steve Waller works with small businesses to attract more customers via their online presence but he also advises them on other general business marketing tips. He himself has joint ventures with other companies and Bentley Accounting Services are one of them so if you need an accountant in and around Buckinghamshire, choose Bentley and tell them he sent you.