We live in a high-tech society where everything is constantly changing. Business owners are bombarded with calls from salespeople offering a thousand new methods for increasing their bottom line. Solutions like FB ads, PPC (PayPerClick), and SEO (Search Engine Optimization) have become commonplace. Hearing about how the IoT (Internet of Things) and AI (Artificial Intelligence) is influencing our lives is still somewhat novel. Yet, no matter how tech-savvy we become, there always seems to be the next new thing to shake up the status quo.
MiTek-Wrightsoft is a technology-driven company, but we still like to kick it old school every once in a while. We are not just interested in how technology continues to impact the business world, we also want to understand how it affects the way people interact with each other. After all, the best innovations help us connect while still improving workflow. On this note, it’s interesting how some business principles are eternal. Some techniques for drumming up more business continue to work perfectly despite all the technological advances we have seen over the last 30 years.
Joint-Ventures – An Adventure and Worthwhile Pursuit
The legal definition of a joint-venture relationship is super confusing. I don’t want to bore you or make it sound more complicated than it really is. Instead, I’m going to give you an example and see if things become clear. A joint-venture relationship can be formed between any two businesses for mutual benefit.
Let’s say an HVAC contractor (like you) goes down to the local Berkshire Hathaway Real Estate office and asks to do a lunch and learn with their agents. Propose to the Branch Manager you will use the time to educate their agents about the benefits homeowners will experience if they properly maintain their new home’s HVAC equipment. You might use photographs to highlight any red flags you commonly see in the field. This will help the agents identify if a home has an HVAC system that might need to be replaced in the near future. The realtors will benefit by learning a bit about HVAC maintenance and how to spot a home that potentially will require costly repairs. When your presentation has concluded, offer to assist in providing any services their clients might need. Give each of the realtors some of your business cards, and ask them to pass out your cards to their clients.
You will benefit when their customers call you. You’ll spend almost no time, energy, or money acquiring these new customers. The realtors benefit by providing a higher level service to their clients, and their clients benefit as well. It’s a win/win/win scenario.
The Pros and Cons to Capitalizing on Other Business Owner’s Relationships
The best rule of thumb is be choosy. Think of a joint-venture as a partnership. If someone doesn’t provide quality services, and has a bad reputation, then you might want to pass. Ask around. Go online and Google the person’s business you might want to target. Go look at the BBB website to see what it says about their business. Check out Ripoff Report and PissedConsumer. You might want to see what those sites have to say about your business at the same time. You don’t want a negative vibe to rub off on you by mistake. When focusing on a group like those at a real estate office, these tactics might not work. You will have to settle for providing a lunch and learn experience to everyone. If you prefer to focus on just one individual at a time, one with a fantastic reputation, the process will be much slower.
The positive side to these partnerships is you will capitalize on other people’s relationships. Referrals are the best source of new customers, and when you establish yourself as the go-to guy in the HVAC industry, your business will probably double in a short amount of time. How? Technology changes constantly, but some aspects of human behavior will never change. People love to do business with people who have been referred to them. It’s one of the reasons testimonials work so well on websites and with marketing pieces. What you and your employees say about your business is not as persuasive as what other people say about you.
Prospects know outsiders have nothing to gain by promoting your business, so they tend to believe the review they give your products and services.
Offer Something Special to Give Your Partners Incentive to Promote Your Business
One idea would be to offer each partner a free inspection. If they refer 15 homeowners to you each year, you will perform a free inspection on their personal home’s HVAC system. (You can make it 10 or whatever number works in your mind. Try to make it achievable or they won’t even try.)
You could also offer to give their customers preference should something happen to one of their systems during the busy summer months. Have a code word their customers are to use when they call alerting you they are one of your JV’s customers. This way you can place them on your VIP list. People love to be placed on a VIP list. It makes them feel special. It will also help you keep track of how many customers each partnership is bringing to you since you will assign a different number or code to each different partnership.
This concept is part of the “you scratch my back, and I’ll scratch yours” mentality. You have to embrace this concept to make a joint-venture work. If you are the only one benefiting, then it will never function properly. The other party needs to be given some kind of incentive to help you.
Buy Lunch and People Subconsciously Owe You
Have you ever gone out to lunch with a friend and at the end they grab the check and say, “I’ll get it.” You automatically say, “Ok. I’ll get the next one.” And you feel obligated to that person. The feeling won’t go away until the next lunch where you are able to pay the bill and return the favor.
This concept has been studied by psychologists. In business, your proposed partners will feel indebted to you until they are able to clear the debt by referring a client to you. So if buying lunch for 20 real estate agents seems ridiculous, think again. You might spend $200-$300 on lunch. How many referrals will you need to get to start seeing $$$? Maybe 1 or 2? Spending $300 to make $3000 is usually a great business decision. What if you made $30,000 though?
What if just half of the group referred 1 person to you? It’s an achievable outcome. In this case, 10 free customers would be sent to you who won’t be skeptical or considering whether you are the right choice for the job. These 10 people have been told how great you are by a third party – they have been hand fed a powerful testimonial. It will be much easier to get these folks to sign on the dotted line. They have been primed to view you as the best choice.
More Examples of Potential Joint-Ventures
If you attend church to get a few members of your congregation to do business with you, and you think it’s a great way to increase sales, then you need to think bigger. The same goes for structured Chamber of Commerce and Lion’s Club meetings. You might gain a few new customers, but you might spend more time at these meetings than it is worth. You are relying on your relationships, not capitalizing on other people’s relationships in these situations. Time is your most precious asset. You don’t want to spend oodles of time on the task at hand. Also, if the members of the meeting can’t benefit from the partnership in some way, then it’s not a good fit. It must be mutually beneficial to really be effective.
Joint-ventures have proven themselves to be the fastest and easiest way to grow your business while still leaving you time to spend with your family, playing golf, fishing, or whatever it is you enjoy outside of work. The point is not to do all the work yourself. Capitalizing on other people’s relationships is the driving force.
Who can you seek out for these partnerships? In addition to real estate agents, I suggest HOA’s, and homeowner’s insurance agencies. HOA’s won’t really benefit in any way except providing valuable information to the people in the neighborhood they want to serve. This is usually enough incentive for that group. The owners of an insurance agency will benefit when their homeowner clients take better care of their HVAC systems. The agency will be providing their clients with valuable information – information that might make them a cut above their competition.
You have to consider who will fit based on the mutually beneficial partnership you desire. If both parties won’t benefit, then it probably won’t be a long term or fruitful partnership. If you can help people provide a better service so they thrive, then that’s a good fit.
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