In the A-Z of Marketing, J is for … Joint Ventures
According to Wikipedia, a joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity.
They are a relatively new concept in marketing and are about collaborative working. A JV is two (or more) businesses working together, to support each other to grow. Here are a few of the key things I’ve learnt about JVs.
1. Design it together. The most successful JVs are the ones that are created by both parties, because it gives you buy in from both sides and allows you to talk about what’s important to each of you. You could identify a company that has the sort of clients that you want to speak to. You could approach this business and ask them if they would contact all their clients and send your information to them. But what’s in it for them? A better way to set this up is to sit down together and talk about what you can both bring to the venture and what you’d both like out of it. When you design it together, you get a more even deal – both in terms of work load and results.
I’m currently working on a JV with a former client, who is a Corporate Social Responsibility (CSR) consultant. Jo has a great online programme that small businesses can join, to help them improve how they use CSR within their businesses. Her clients are small businesses and so are mine. We’re looking at how we can work together to encourage more people to use CSR (what Jo does) to market their companies (what I do.)
2. Make it complementary. If you’re looking for new clients, don’t just approach a big company that you know has a large list of businesses you could work with. What’s in it for them if you’ve only got a small list of clients? Look for businesses roughly the same size as yours, with a product or service that complements yours. Look for businesses in the same market as you, but who aren’t in direct competition with you. That way the ‘deal’ will be more even.
Matt is a website designer who has created a website where local food producers can list and promote what they do. Most of these small companies don’t have websites, don’t know how to write good copy and don’t have a lot of money to spend. Matt and I have put together a package for all the producers, where he will create a simple, easy to use website and Appletree will write a number of pages of copy for them. All at a cost that they can afford and that brings us a steady flow of new projects to work on. Win-win for all both of us – and the clients!
3. Set a time limit. Joint Ventures usually work best if they are a one off project. If they are long term, they are more likely to become a legal partnership or require the formation of a new business. When you’re creating your JV in collaboration with your partner, think about the length of time that you want to work together. A time limit will make the project much more focused.
At Christmas I sent a voucher for a personality profiling test (Talent Dynamics) to a number of my clients. My team and I have been profiled and it really helps us to communicate better and I wanted to share it with some of our clients. I also wanted to help our Talent Dynamics consultant, Rachel, to grow her business. Sending my clients a ‘gift’ helped me develop relationships with them; and it gave Rachel access to some businesses who were interested in Talent Dynamics.
There are many ways in which you can use JVs to grow your business and the internet is full of articles about how (and how not) to go about doing it. Think carefully about who you want to work with, how you want the venture to look and how long it will last. When you get it right, a JV can be a great way to grow your business.