For the purposes of this book, a joint venture (also known as a JV or strategic alliance) is an arrangement that will be of mutual benefit between two (or more) people or organizations who have complementary resources or assets that can be leveraged.
Resources and assets.?
We mean products, services, machinery, equipment, buildings, unused capacity, and a customer list (or audience) that can be leveraged by the owner or whoever approaches the owner with a joint venture proposal.
“If you help enough people get what they want, you will eventually get what you want.”
A “joint venture” can refer to the formation of a legal entity by partners for the purposes of a specific project to be concluded within a definite term (limited timeline). There are legal and tax implications which the partners must discuss with their own counsel. When we say “joint ventures” here, we are referring to the concept more broadly. The legal implementation is up to you, your partners, and your attorneys!
Now that we have that out of the way,
Joint ventures are known under many names. Brand collaborations, tie-ins, tie-ups, strategic partnerships, strategic alliances, channel partnerships, endorsement marketing, hidden asset marketing, reciprocal marketing, fusion marketing, and more.
These terms essentially refer to the same strategy and, if you look around, you’ll see many examples there in the world. For example, when you see a commercial for McDonald’s you almost always see a pitch for Coca-Cola.
The General Idea.
The most basic JV is simple: Business A agrees to include Business B’s offer or an endorsement letter in a communication to their customers or audience – either for a fixed fee, a percentage of sales, or if Business B agrees to do the same for them. The result is instant access to a whole new set of customers without having to spend any money on advertising or market research to find them.
A joint venture is a win-win situation because everybody gains, and nobody loses. Joint ventures cut through the top-heavy expense of finding large numbers of customers from scratch.
You don’t need to do lengthy market research. You don’t need to rack up massive ad spend. You don’t need to weed out unqualified clients. Joint ventures drive right to the customer in a straight line. With a joint venture, you capitalize instantly on the other’s party’s resources – and they’re glad to let you do it because they benefit as well.
Joint ventures are successful because of the old business rule that says: “People like to buy from someone they know and trust.” Yet, according to our experience over 15 years, less than 5% of all business owners use joint ventures properly and most don’t know how to use them at all.
Don’t be passive and wait on those one-off referrals and occasional collaborations. Make joint ventures a core element of your growth strategy today.