RISMEDIA, July 3, 2009-After writing an article recently about ranking lead quality, I received many questions about joint venture relationships. In the article, I ranked joint venture leads as being the second-best lead you could generate.
A joint venture relationship is defined by Wikipedia 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.”
One of the greatest recent examples of joint venture would be between Apple and AT&T for the sale of Apple’s iPhone. AT&T benefits from the joint venture because they get millions of new cell phone subscribers without incurring any marketing cost. The new subscribers are delivered to them when someone buys an iPhone. Apple benefits because they receive a commission from AT&T for a portion of the new subscriber’s phone bill. This additional revenue helps Apple offset its 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.
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.
Let me give you an example. I put together a joint venture relationship with my attorney. I drew up a letter that he could mail to his database offering them a free gift, which was a copy of my book. Any of his clients who wanted their free copy had to call my message center and leave their name, address and phone number. I handled the mailing on my end and sent the letter to about 200 clients of his. The mailing generated about 40 leads for a cost-per-lead of about 40 centers. And because this letter was an indirect endorsement of me by the attorney, these clients were “pre-sold” and the leads were consequently high-quality leads.
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.
OK, I know what you’re thinking …
“I don’t have my own book!” But you don’t need your own book to put this strategy in play, just something of value. A free report, a complimentary audio CD, or you could set up a conference call with a joint venture partner and record it. Interview each other and market the call to both your databases. A great conference call right now would 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:
“Three Costly Mortgage Mistakes Buyers Make When Buying a Foreclosed Home” – Lender JV
“What You Must Know About Insurance When Purchasing a Foreclosed Home” – Insurance JV
Hopefully you see how powerful joint ventures can be in your business. They do require work, but they are very valuable lead-generation tools. You’ll generate high-quality leads inexpensively, and you’ll be able to attract more “pre-sold” clients to your business. Set a goal to launch one joint venture promotion per month for the rest of the year. Once the first promotion is set up, it will be simple going forward because you’ll just reuse marketing pieces with each new joint venture!
Rob Minton, who reinvented his real estate sales business to sell 269 homes to a limited number of clients in one year, has written a very practical book on how real estate agents can sell more homes. For a limited time, you can download this book for free.