Finding new business 3: mutually beneficial arrangements

Having exhausted your customer base – well almost – my next suggestion is to look at your suppliers and other businesses. If you sell Business-to-Business, this particular tactic might give you another resource from your customers too.

It’s one I’ve shared before, but I think it is worth re-visiting. Especially if you’ve not previously considered it pro-actively.

Take a look at who your suppliers sell to; where is their target market? If you sell to businesses check who their target market is.

Is their market the same as yours… but supplying a different product or service?

And take a look at other businesses – those you currently don’t have a relationship with – which ones have the same target audience as you?

Now, if you’ve been following this blog for a while, you know where I’m going with this.

Put your negotiating hat on and contact those businesses you’ve identified. Aim to speak to the owner, Managing Director or Marketing Director because you need someone who can recognise the potential of what you are proposing and can make a decision.

You are looking for an arrangement that suits both parties – you and them.

One thing before you make your first approach… check the quality of what they supply and their reputation. You do not want to be associated with a company who does not match your standards because, apart from being detrimental to your reputation, you wouldn’t want to introduce them to your customers would you? And if their customers are not that happy with the other company they may not value any recommendations they receive in which case there’s no benefit to you.

So what arrangement are you looking for?

You want the other business to recommend or endorse your offer.

You ask them to write to their customers recommending your product or service or with an exclusive offer. Be prepared to write the letter for them (they agree the content, of course) and expect to cover the costs of printing and postage if you are using an offline mailing campaign. Of course, the most cost-effective promotion is via email – but you have to be confident your partner’s customers do read and respond to emails sent.

Anyone taking up the offer responds direct to you.

You need to code your offer so you know exactly what response you have got. One advantage of this arrangement is it complies with the data protection act because the other company is writing to their customers; they are not exposing their customers’ details to a third party.

Recompense: Agree a percentage or fixed amount as commission for each sale/lead you gain.

Or – agree a reciprocal arrangement to introduce them to your list.

Depending upon what you are supplying you may be asked to offer a special price to the other company’s customers rather than paying a referral commission – or both. Or the company you approach may have a favourite charity they support to which you could pay an agreed proportion of the profit you make.

If the organisation you’ve approached makes regular deliveries to their customers you could suggest including a brochure/flier inside their packages. This is not as effective as a direct recommendation but may be all you can get them to agree to. Again coding for monitoring results is important to make sure you’ve got sufficient new business to justify your expenditure.

Barriers To Arrangements.

The process I’ve described is prevalent on the internet… I’m sure you’ve come across the term affiliate. An affiliate arrangement is the same as I’ve described. An affiliate recommends a product, course, newsletter or program to the people on his/her list. S/he gets paid a commission for each sale made as a result of that recommendation. (In fact setting up an affiliate programme may be something you might want to consider).

Although it is a widely accepted practise on the internet, bricks and mortar businesses are not always as open to the idea. Which means when you approach a company you’ve ‘indentified’ as being suitable for this arrangement the idea may be quite alien to them.

They will be sceptical about whether there are any advantages and they may be concerned about losing or upsetting their customers.

It’s your job to reassure them your product or service is top quality and explain the satisfaction guarantees you offer. You need to demonstrate your commitment to customer service – that’s where your existing customer testimonials support your claims. And you need to clearly explain the answer to the other business owner’s “What’s in it for me?” question. If you are suggesting a commission payment explain how much you expect to be paying each month – remind them this is money going into their bottom-line profits without any expenditure from them.

I suggest you send a personal letter explaining you have a proposal that could be mutually beneficial to both your businesses and suggesting you meet up for a no obligation exploratory discussion.

It is not necessarily an easy arrangement to achieve, you’ll probably meet a lot scepticism. But it is one that is worth persevering with because effectively you are dipping into a pool of warm leads that could result in hot prospects.

In the next post we’ll explore a slightly different take on this tactic.

~ Carol Bentley

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