Five Small Steps For An Easy Joint Venture
Posted by Guest on Oct 22, 2008 in Entrepreneurs • No commentsAt the end of this short document are the five steps you need to go down to start you on the road to joint venture success. Please don’t jump there right away because you don’t want to miss out on some of the nuances.
Supposing you had a product that sells for $97 on how to have a better relationship with your teenage children.
You contact your nearest list broker and buy or rent a list of 10,000 names. You then craft a sales letter that explains your product and why people should buy it from you. The letter is sent out to each person on your list/database.
Amazingly you find that your letter pulls in a 2% response, in other words 2% of the recipients decide to buy from you. Lets do our sums; two percent multiplied by 10,000 prospects equals 200 orders. 200 Orders which retail at $97 is a gross profit of $19,400
Is a 2% conversion a bit on the low side? It is in fact pretty good as far as it goes but could it be a lot better? Think about this for a second, the people don’t know you, they know nothing about your business, they probably don’t know anything about your product.
In short, they are concerned with being ripped off - Is there a better way?
Cold mailings are never going to be that great because they don’t trust you. Here is how you could improve it.
Just supposing you found an owner of a similar list who often contacts his subscribers and has a good relationship wit them. Could you imagine what would happen when your endorser writes to the people in his database and explains what a great person you are and talks about your great product.
What do you think would happen to the conversion rate?
There is every likelihood that this type of endorsed letter is going to get a far better response rate than a cold list. Lets face it, people buy from people they know like and trust, when someone endorses you the trust is transferred to you.
If your Joint Venture endorsement has been properly thought through there is a very good chance that you will get wa more than a 2% response rate. If your conversion rate only increased from 2% to 6% (a three fold increase) just imagine what that could do to your bottom line. So instead of $19,400 you are now getting 6% of 10,000, multiplied by $97, equals $58,200 gross profit.
This outcome may surprise you and you may even have doubts it would really work. Run a small test of say 1000 names from a cold list and then compare what happens when you work with a Joint Venture partner who endorses you.
Step 1 - Identify what type pf customers you are targeting
Step 2 - Find a Joint Venture partner who already has a relationship with these types of customers.
Step 3 - Agree a % split of the profits
Step 4 - Do a small test endorsed mailing
Step 5 - Do a small test to a cold list (same No’s and customer profile)
Compare the two results. There is a very good chance that the joint venture endorsed mailing did far better and brought in more profit.
All you need to do is repeat and leverage the one with the best results and you will make more money in less time.
Have fun with your next joint venture
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