You’ve no doubt heard of the Oprah Effect.
Investopedia defines it as… “The boost in sales that followed an endorsement on The Oprah Winfrey Show, which aired on TV for 25 years.”
It turned many fashion and lifestyle products into multimillion-dollar companies.
But the opposite is also true.
Some companies were ill-prepared for the massive influx of orders and nearly went belly up!
Fortunately, you don’t need Oprah to trigger a massive influx of orders.
If you have a snowball’s chance in you-know-what of getting on Oprah, there’s another strategy you can use that’s a whole lot more manageable.
It can work so well, in fact, I’m shocked by how many people fail to make use of it.
5 Times More Likely to Buy Than Cold Traffic
The strategy I’m referring to, of course, is the endorsement.
In online marketing circles, it’s typically referred to as a joint venture or affiliate program.
It’s nothing more than a performance-based program, whereby one business owner tells its customers about another business for a cut of the profits.
In simple terms…
- Someone sends you a prospect
- You turn that prospect into a buyer
- You split the revenue from that buyer with your partner
It allows you to leverage the enormous time, money, effort, manpower, and other resources that another business owner has already invested in building a successful business.
Not to mention the familiarity, trust, and goodwill they’ve created in the marketplace.
What’s more, it costs you nothing and has little or no downside risk.
You gain instant respect, credibility, and prestige…
… You tap into a source of leads that’s easily five times more likely to buy from you than any cold source of traffic you could ever hope for…
… And if done right, you expand your business easily and quite rapidly.
The key to negotiating a great endorsement is no different than selling a customer: You make your prospective endorser an offer they can’t refuse.
Show them how you can bring tremendous advantage to their customers.
And of course, explain to them what they stand to get in return.
Then take it one step further and prove it to them, by offering to provide your product or service to anyone of their choosing as a test case.
If the test is successful, ask them to offer it to all their customers or clients on a more favorable and preferential basis than they could ever get it on their own.
Offer a better price, special package, limited bonus, or more support.
Finally, offer to generously share with them all profits resulting from their endorsement.
Better Than Facebook Advertising?
Joint ventures can be incredibly profitable if you can find the right partners.
One of the best things about this arrangement is that you never have to pay for advertising that may or may not result in a sale.
It doesn’t cost you a penny until after the sale is made.
You only pay for results. Period.
You see, here’s the thing…
The average advertiser on Facebook is happy to get a 2-to-1 return on their ad spend.
Spend $1. Get $2 back. You’ve earned $1 in profit.
Simply do that over and over again and you’ve got a profitable business.
Now let’s assume you’re planning to split revenues 50/50 with a JV partner.
Here’s what that looks like…
Spend 0$. Get $2 back and share $1 with your partner. You’ve earned $1 in profit.
At first glance, it’s no different than advertising on Facebook.
But there’s one huge difference… you didn’t have to risk a single dollar to do it.
There’s virtually no downside risk.
When done well, things can get really exciting really fast.
A single joint venture – with the right partner – can launch your business into the stratosphere at warp speed, just like the Oprah Effect!
So that begs the question, how do you find the right partner?
FIRST, find out who the “big guns” are in your target market.
If you’re going to sell online, you should know every thought leader, expert, or “guru” that’s publishing and selling to your target market.
Get on their mailing lists and get familiar with every product they offer.
SECOND, find out who else is selling to your target market.
You might call these 2nd tier partners.
They don’t have a massive following, but they have great lists, great products, and their customers love them. Maybe they just aren’t prolific marketers.
A great way to find these diamonds in the rough is with a quick search online.
For example, if you sell products or services to teach people how to play the piano, go to Google and search for “affiliate program: teach piano.”
Then research other key publishing channels in your niche.
This includes blogs, online forums, ezines or newsletters, and social media.
Using these two methods, you’ll quickly find a whole bunch of experts you can start building a relationship with for future cross-promotions.
Create a spreadsheet listing who they are, what they publish, top products they sell, etc.
And before you contact any of them, consider this…
You Only Get One Shot, So Don’t Blow It
One of the worst things you can do is approach a prospective partner before you have a proven product and a proven sales message.
Your partner is taking a big risk by mailing your offer.
If they get burned (i.e. little or no sales for their efforts), they’ll likely never mail for you again.
So just because you can get someone to mail for you, doesn’t mean you should.
At least not until you have a marketing campaign that’s converting.
That means you have a proven product, a proven offer, and a proven sales message.
Having an established track record of product sales and conversion rates also makes it a whole lot easier to recruit partners in the first place.
Start building relationships with key players in your market now.
But don’t approach them with your offer until you’ve got proven results to share with them.
Put the focus on making money for your partner and you’ll make money in return.
So how much do you offer to a joint venture partner?
The answer is, it depends.
In the online marketing community, a 50/50 split is pretty standard for an evergreen product where there’s no extra work involved beyond delivering the product.
If your offer includes 1-on-1 attention, such as consulting time, then you’ll probably want to weigh the split more in your favor.
A good first step is to research what affiliate programs in your market are offering.
Start there and consider offering a performance incentive to partners that bring you a large quantity of quality, high-converting traffic.
These types of partners are generally referred to as Super Affiliates.
There’s no reason you have to give every partner the same commission structure.
At the end of the day, keep the Golden Rule in mind and remember that the more money they make, the more money you make.
Above all else…
Create Relationships That Flourish By Treating Your Joint Venture Partners Like Gold
Your partners are taking a big risk by promoting you for free.
So you had better treat them like gold because that’s what they are.
Pay them consistently and on time.
Offer contests and incentives. Quite literally, anything goes. I’ve seen cash, iPads, laptops, trips, cruises, and $100,000 cars.
Provide regular communication and support, including email updates, newsletters, partner websites, or anything else that allows you to effectively keep in touch.
Be there when they need you, and get back to them quickly.
Make it drop-dead-easy for your partners to promote you.
This includes having a high-converting evergreen sales webinar, or lead generation magnet, that your partners can offer to their lists.
Don’t just expect them to send traffic to your boring old website.
If you don’t have a proven money-making campaign, you need to create one immediately.
Once you do have one, provide your partners with cut-and-paste marketing copy and materials that they can just drop into their websites and autoresponders:
- Email swipe copy
- Banner ads
- Customized registration pages
- Social media ad copy and posts (Facebook, Twitter, Pinterest)
- Etc, etc, etc
I cannot stress this enough…
Do not ask a prospective partner to promote you until you have all this stuff in place, or you risk burning a potentially lucrative relationship before it even gets off the ground!
Finally, keep the 90/10 principle in mind.
90% of your sales will come from 10% of your partners. In some cases, it’s closer to 98/2.
So focus 90% of your energy on the 10% of high performers.
So Let’s Review…
Why should you consider a joint venture?
1. You only pay for results.
When you advertise, you pay money upfront and hope you get more sales in return.
With a joint venture, you’re guaranteed to at least break even since you only pay when a sale is generated. If you’ve done as I recommend above, you’ll do far better than break even.
2. Low risk, high reward.
A joint venture gives you enormous upside potential, with little or no downside risk.
Your partner spends their own time, money, and resources to promote you and your products so it’s the ultimate form of leverage. Your only real risk is in choosing the wrong partner.
3. Endorsements trump advertising.
When a partner recommends you, it’s seen as an endorsement rather than an advertisement.
You’ll typically see dramatically better results from an endorsement because people respond a whole more favorably to a personal recommendation from someone they trust.
4. You get the best quality subscribers and customers.
You usually end up attracting your partner’s best, most responsive customers.
These prospects are far more likely to buy from you than cold traffic. So you should never underestimate the power of a good partner to transform your business in the blink of an eye.
Until next time!