Recently, I wrote an article about ranking the quality of leads. After the article was published, I received many questions about joint venture relationships. I mentioned in the article that joint venture leads are the second-highest quality leads you can generate. Wikipedia defines a joint venture relationship as:
A relationship 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.
A great example of a joint venture is the one between AT&T and Apple for the sale of the latter’s iPhone. AT&T derives benefit by gaining a ton of new subsribers without doing any marketing, which Apple handles. Apple, in turn, receives a commission on each new subscriber AT&T signs up. This additional revenue helps offset the marketing costs Apple incurs to sell 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.
We real estate agents have the opportunity to use joint venture relationships for our businesses to reduce our cost per sale and our cost per lead. This lead generation strategy is especially important in today’s market because of the lower volume of home sales. Agents are struggling with cash flow and need to generate leads inexpensively. Joint ventures should be an integral element in your marketing.
To give you an example, let me tell you about a joint venture relationship I set up with my attorney. I drafted a letter he could send to his database, offering my book as a free gift. If someone in his database wanted a free copy of my book, they had to call my 24-hour hotline and leave their name, address and phone number. I covered the cost of mailing the lettrers and handled everything on my end. We mailed 200 letters to his database and generated about 40 leads. The cost per lead was about 40 cents. More importantly, all 40 of the leads were high-quality because the letter was an indirect endorsement for my business. The attorney’s clients requesting my book were “pre-sold” because of endorsement.
The attorney benefited from the joint venture in three different ways. The first was that we referred our clients to him for asset protection and estate planning. I recommended his practice in our client newsletters and featured one a couple of his articles. The second benefit for him was he was able to offer a special gift to his database without having to spend any money or take time to do any work. The letter was from him, but we took care of everything for him. The third benefit was that many of the people who requested my book called him to ask about us. This gave him an opportunity to talk to clients he hadn’t talked to for a while. This was a win/win relationship. It helped both of our businesses. We each generated leads and clients inexpensively through our 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.
Now, you may be thinking …
“But I don’t have my own book!” Well, you don’t need a book to implement the strategy. You do need SOMETHING of value. How about a free report or a free CD? Or you could set up a conference call with your joint venture partner and interview each other. You can market the conference call to your database and to the partner’s database and share the leads that you generate. An example of a great joint conference call right now might be:
“Three 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!