There are lots of people telling you how you should be growing your business in 2019.
The funny part is, almost all of those strategies and ideas revolve around you hiring that person to help you grow your business. Usually for around $5,000/mo.
Sound familiar?
This is the first blog in a 5 part series designed to teach you exactly how to grow your business in 2019. These strategies work and they are not dependent on anyone but you. If you get can get motivated and focused around these strategies, you will be see real results in 6 months or less.
I don’t believe in beating around the bush, so we’re going to get right into this. We’re starting with the idea of strategic alliances and how they can be used to grow your business. Let’s start with the basics of creating a strategic alliance.
Set Up A Referral System
To start, get together with one or two other businesses and offer them reasons to refer customers to you. A couple reasons for them to send you business are the following:
- Commission.
- Extra customers
- Value they’re giving their customers by referring them to a quality business.
The most effective type of referral system is a combination of all three. That is, you have a system where you give 10% of any referred job back to the referring business. You do the same for them. On top of that, you ensure you give them plenty of supporting reasons; your service, your prices, your quality. Simply find several businesses who you feel would make good referees, and write them letters explaining the system. You will find an example of this kind of letter in the fourth section.
Better yet, phone the businesses who have already been referring customers to you. Thank them directly for all their help and send them a gift. After that, say ‘listen, if you’re doing this anyway, it is only fair that I give some of the extra profits you’re creating for me.’ Not only will they jump at the idea, but you will also find you immediately get more referrals, especially when you offer to start repaying the favor.
It is important to keep the relationship going after the initial contact and to build ongoing rapport, and remember, the more referrals you send to them, the more they are likely to send to you.
Choose your businesses well, as those with the wrong attitude and target market will only end up wasting your time, and potentially damaging your reputation.
Introduce yourself to the database of another business, this is the easiest way to join forces, and something almost any business can do.
Example 1 – The Hairdresser
It is probably best explained with an example. Let us imagine you run a small hairdressing business. You have a slew of regulars, but rarely see any new business, owing to a poor location and dull advertising. No problem, for less than the cost of one advertisement, you can have 300 customers personally recommended to you.
Here is how it works. You arrange to meet with the owner of a non-competitive yet related business. For a hairdresser, a beauty salon would be ideal. Dependent on the target market of the hairdresser, a lady’s gym might also be a winner.
Tell the business owner you are willing to give every one of their customers a free haircut, valued at $48. The trick is, you’re going to set it up, so it looks as though the owner of the beauty salon has personally paid for this gift.
You write a letter, signed by the other business owner, that says ‘Thanks for being a customer, I appreciate it immensely. Just to show that I truly am grateful, I have arranged a special gift for you, a complimentary style cut with Julia’s Hairdressing. I recommend Julia and her team highly, and I’m certain you will appreciate the difference too.’
You mail this letter to the beauty salon’s entire database. To sweeten the deal, you might offer to pay for the postage and printing. The benefit to the beauty salon is clear – they get to mail their customers a $48 gift without paying a cent for it. They get all the good feelings, referrals, and repeat business, and they did not have to do a thing, but the real benefits are yours. Hundreds of qualified people will receive a personal recommendation to see you for a haircut. They will also get an almost irresistible offer.
Compare this with a traditional advertisement. You spend $400, get ten calls, and maybe five sales. Cost per sale: $80. That’s pretty steep.
With the joining forces concept, the stats are a lot more appealing. A mailout to 200 people might cost you $150 all up. Let us imagine you get 10%, a relatively conservative estimate that is 20 new qualified customers. Cost per sale: $7.50, now it is starting to make sense.
If you Join forces with 4 or 5 related businesses and form a ‘collective,’ this idea especially applies to people in the service industry.
Example 2 – The Auto Electrician
Let us say you are an auto electrician. You are doing ok, but most of the work is going elsewhere. The main mechanics in town are referring the work to other guys, and you are getting killed in Yellow Pages. What can you do? It is a tough one, although everyone who has a car may one day need your service, you never know when. The answer is to join forces. Get on the phone to a mechanic, a car detailer, a tire retailer and car window tinter. Tell them of your brilliant idea ‘let us join forces!!’.
Here is how it works. You will advertise yourselves under the one name, let us say ‘Guaranteed Car Services,’ you will probably need to be a bit more creative than that. You have one number, a Free call number, one guarantee, either you are delighted, or you get the job for half price, and one policy, everyone helps everyone else out
If the mechanic, car window tinter, car detailer or tire seller becomes aware of a car that needs an auto electrician, you get the name and details. If you see a mechanical problem, you pass on the customer to the mechanic. If the car detailer overhears the customer talking about tinting, they refer them to the car window tinter.
At the end of every job, you run the customer through a checklist; ‘Ok, that is your electrical problem sorted out. Now, when was the last time you had the car serviced? Right, I could arrange a service for you. Here is a $25 voucher towards that, I know the mechanic, Fred, and he does a top-notch job.
Oh, by the way, summer’s coming, have you thought about tinting No, you should, I have got this card here from John’s Auto Tinting. He said if I gave it to any of my customers, he would do two windows for free when you book your whole car in. And in case you did not know, both of those guys are covered by Guaranteed Car Services. If you are not delighted, you get your money back.’
You run through your checklist until each business has been covered. Any ‘hot’ leads get passed on to the relevant business, and they return the favor for you. It takes a bit of organization, but it is certainly worth it. Here are three more interesting combinations:
- Guaranteed Home Services: a lawn mower, external house cleaning, painter, roof service, tree arborist, and tree stump grinder.
- Guaranteed Beauty: a beauty salon, hairdresser, masseuse, and gym.
- Guaranteed Fashion: a clothes store, shoe shop, hat store, tie store, and image consultant.
Apply this to your business – who could you join forces with?
Arrange gifts to give to your customers; this is a reverse idea, where you introduce another business to your customers. It is a great one for businesses where there has a long interval between purchases. Let us think about a car salesperson.
The hardest thing about selling cars is getting people to remember who you are next time. Because they go 2-3 years without buying a car, there is very little loyalty. That problem is easily solved by keeping in regular contact.
Mail your customers cards and letters and to maintain communication, just keep the relationship going, but if you are going to mail them something, why not make it extra special. Drop down to the local clothes stores and say ‘you know, most of my customers are trendy young women they would love to know more about your store.
If you give me a $25 gift voucher for every one of my customers, I will write a personal recommendation that they come and visit you.’
Once you have got that out of the way, go onto the next target business, a massage therapist. Say ‘most of my customers have the money to spend on a monthly massage, and if they were shown how good it really is, I am certain they would be more than willing to come back regularly.
If you give me a voucher for every one of my customers, I will mail it directly to them, and recommend that they see you every (however often) weeks.
Ok, that should take care of your customers for a few months.
Imagine that, you buy a car from someone, and then start getting all these great gifts in the mail. How would that make you feel?
People buy from people, so if you have built the relationship, you get the sales. Join forces with the suppliers of businesses you’d like to sell to; this is an extension on the first idea.
Example 3 – The Management Consultant
Let us say you are a management consultant, and you specialize in helping managers reach a state of peak performance. Simply introducing yourself directly could work, but it is really only you saying ‘hey, I’m good.’ People expect you to toot your own horn. It is when someone else toots it for you that they get excited.
So how do you do that? Easy, hit the suppliers of the businesses you would like to deal with — for example, a high-end writing pen fand office supply store. You say to them ‘I would like to give you a gift which you can pass on to your top clients. It will make them love you, and give them some genuine benefits. I am a management consultant, and I charge $XXX an hour. For your clients, I will do a full 1-hour appraisal and performance evaluation free of charge. This will be your gift to them.’
To understand why this idea will work, you first need to understand the plight of this office supply store. They are aware that almost anyone with better prices can come along and knock them off their perch, Amazon being a prime example. There is so little perceived differentiation between your products. Therefore, the price is often the only factor.
Doing something out of the ordinary for their customers will give them the edge. They have introduced emotion into a very bland, price-driven business. The benefit to you is also massive; you get a personal recommendation from someone the prospect already knows and trusts. For service as intangible as management consultancy and personal performance coaching, making a differentiation is essential.
Selling someone else’s product is probably the most straightforward concept for joining forces. The trick is to be constantly scanning for hot products related to your business that you can offer to your customers by teaming up with that business.
More Strategic Alliance Ideas
Getting back to our hairdresser example, there are plenty of opportunities for a business like that. A new quick hydrating hair product proving luscious looking hair, a hair system that is guaranteed to keep cut hair off you and your clothes.
You simply write your customers a letter that explains the benefits of the new product and ends with ‘Of course, I have arranged a special price for you. To order, simply call me now with your credit card details. I will arrange to ship within 2 days. And your purchase is guaranteed, if you are not delighted, simply phone me, and I will drop by and pick it up.’
Suppliers generally will not mind, even if they are dealing directly with retail stores, it is another opportunity to sell the product after all.
You can also do this with service businesses; simply take a commission of their first sale to the customer. For instance, a gym might sell a massage therapist in a mail-out to its customers. They do this, on the condition they get half of the first sale. If the massage therapist is smart, they will understand the lifetime value of the customer, and jump at the chance.
So, once you have decided which way to go about your strategic alliance, you will need to get out there and convince your potential ally businesses to get on board.
How To Approach Partner Businesses
The best way is to approach businesses who you already know, especially those who seem to be already referring customers to you. Failing that, the best way is to write them a letter explaining the idea as clearly as you can, then follow them up on the phone.
It is a common misconception that you have to be a great writer or some wizard with words to write a letter that works.
That is not entirely correct; people who know the people they are writing to and know how to come up with an appealing offer write most of the most successful letters. Their writing skills are irrelevant.
As long as your message is clear, quick, and targeted well, your letter will work. It is really like serving food; if you are serving a delicious meal, it will taste just as good delivered on paper plates as on your best silver. People may prefer it on the silver, but if you are serving to people hungry for what you have cooked, they will eat anyway.
There is only one sin you do not want to commit, getting off the point, or rambling too long. If every word and every sentence say something important to the sale, fine, if your letter is full of fluff, people will lose interest very quickly. The same applies if you stray from your initial intention and message.
These guidelines apply for any letters you write to the host business to arrange the relationship or letters that you write to their customers.
Next Steps
Part 2 of this series will detail exactly how to write this letter and specifically what you need to do to make sure you get a response. Stay tuned!