Post by Rob Minton
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After writing a post about ranking lead quality, I received many questions about joint venture relationships. In the post, I ranked joint venture leads as being the 2nd best lead you could generate. A joint venture relationship is defined by Wikipedia as:
formed between two or more parties to undertake economic activity
together… The venture can be for one specific
project only, or a continuing business relationship such as the Fuji Xerox joint venture.
Probably one of the best recent examples of joint venture would be between Apple and AT&T for the sale of the Iphone. AT&T benefits from the joint venture because they receive millions of new cell phone subscribers without incurring any marketing cost. These new subscribers are delivered to them when someone buys an Iphone from Apple. Apple benefits because they receive compensation from AT&T for a portion of the new cell phone subscriber's bill. This cell phone revenue helps Apple offset their costs to market the Iphone.
In the big picture, both businesses benefit from the joint venture relationship. The main benefit of a joint venture relationship is a lower cost of sale.
As real estate agents, we have the opportunity to engineer joint venture relationships into our businesses to reduce our cost per sale and our cost per lead. This lead generation strategy is very important in today's market because of the reduced volume of home sales. Many agents are struggling with cash-flow and are looking to generate new leads inexpensively. Joint venture relationships should be an integral part of your marketing plan.
As an example, I setup a joint venture relationship with my attorney. I drafted a letter for him to send to his database offering my book for free. If someone in his database wanted to have my book delivered to them for free, they had to call my hotline and leave their name, address and phone number. I covered the cost of the mailing and handled everything on my end. We mailed 200 letters to his database and generated around 40 leads. The cost per lead was around 40 cents each. More importantly, all 40 of these leads were high quality because his letter was an indirect endorsement of my business. His clients requesting my book were "pre-sold" because of this indirect endorsement.
My attorney benefited from this joint venture in 3 different ways. The first benefit was that we referred our clients to him to help with asset protection and estate planning. I recommended him in our client newsletters and featured one or two of his articles. The second benefit to him was that he was able to offer a special gift to his database without having to spend any money or do any work. The letter was written from him, but we handled everything for him. The third benefit was that many of the leads requesting my book called him to ask about us. This gave him an opportunity to talk to clients he hadn't talked to in a long-time. This was a win/win relationship that helped both of our businesses. We both generated new leads and clients inexpensively from our joint venture relationship.
If you think about this for a minute, you might realize that this little joint venture strategy could be repeated with lenders, insurance agents, financial planners, accountants, home inspectors, home staging specialists, interior designers, contractors and other local businesses in your marketplace. You could offer to send a letter to your database promoting your joint venture partners and they would obviously send a letter to their database promoting you. This would help you create win/win relationships.
I know what you're thinking…
Sounds great, but I don't have my own book! You don't need a book to implement this strategy. You do need something of value. How about a special report or a free CD? Or you could setup a conference call with your joint venture partner and interview each other. You could market the conference call to your database and to your joint venture partner's database and share the leads generated. An example of a great joint venture conference call right now might be:
"3 Costly Legal Mistakes Buyers Make When Buying a Foreclosed Home"
During the call, you and your attorney could highlight some of the mistakes buyers make. At the end of the call, you both could have a special offer for listeners.This same strategy could be repeated over and over again with different joint venture partners:
"3 Costly Mortgage Mistakes Buyers Make When Buying a Foreclosed Home" – Lender JV
"What You Must Know About Insurance When Buying a Foreclosed Home" – Insurance JV
Hopefully you can "see" how powerful joint ventures can be for your business. They do require work to set up, but they are very valuable lead generation tools. You'll generate high quality leads inexpensively and you'll attract more "pre-sold" clients to your business. Set a goal to launch one joint venture promotion a month for the rest of 2009. Once the first promotion is created, it will be a piece of cake going forward because you'll be able to reuse marketing pieces with each new joint venture!