If you’re familiar with my previous posts, you know that I’m an advocate of learning direct response advertising if you aspire to run a location independent business, or any business for that matter (see my post on Lifetime Customer Value & Cost of Acquisition). Being able to spend a dollar on ads and turn it into ten dollars of revenue is a key skill for long term success.
That being said, it can be a risky proposition when you’re first starting out. The danger of losing money on ad campaigns can put many would-be entrepreneurs off from trying, especially if the start-up budget is tight.
While conditioning yourself to accept dealing with risk is essential if you want to survive as an entrepreneur, that doesn’t mean you should jump into taking risks beyond your skill set.
Intelligent, calculated risks are necessary – BUT, they should also be minimized. Taking unintelligent risks out of over-confidence will sink you before you start. The point is to learn to balance risk and reward so that when you do take risks, the potential rewards are stacked unfairly in your favor.
Fortunately, there is one method of client generation that removes this risk of spending money on ads without making any sales: strategic partnerships.
A simpler word for this is “affiliates.” This is the word typically used for people who sell online products on commissions. For larger, B2B services, the terms used tend to be strategic partnerships, resellers or white label partners.
Strategic Partnerships/Resellers – This is where other businesses will refer business to you, either for a fee, a percentage commission, or perhaps for a mutual referral deal (they send you leads, you send them back). This is essentially the same as a reseller – they close the deal for you (or at least send you the lead), then hand over the clint for you to deal with directly.
White Label Partners – this is slightly different, in that your partner will put their own branding on your service and deal directly with clients as the seller, handling all customer service, etc. You simply handle the delivery on the back end – you’re effectively an outsourcer. This can be ideal for the location independent entrepreneur as it means less client-facing interaction, but the margins also tend to be a bit lower than if you were handling clients directly.
Whichever model you use (and you can use both), the effect is the same: you are incentivizing other businesses who already have complementary services to sell your services on your behalf, for a commission or fee.
If they make a sale, you make money. You only have to pay them if they generate business for you. One or two great partners like this can be a potent source of ongoing leads and sales, and it’s win-win – you help them add a new income stream to their business, and they can offer their clients an awesome upsell (your service), while you get a steady stream of new business without having to actively generate it (beyond maintaining the partnership).
When I first started my SEO business, my strategy focused was built around finding businesses that would BOTH be interested in buying my services, and potentially on-selling them to their own clients. This is a powerful approach to anyone setting out on a new business-to-business venture.
Now – how do you find them?
We’ve talked about the benefits of using partnerships to get clients – now how do you actually find them in the first place?
My own strategy here has a few key elements, with both inbound and outbound channels at play.
In order to create a targeted outreach list, you need to consider the chain of purchasing decisions a client goes through before they come to ordering your particular service.
What other services/products do my clients buy BEFORE they buy my products/services?
In a chain of purchases, what’s the logical previous step someone makes before buying from you? (You generally won’t buy car seat covers if you don’t own a car.)
What else are they likely to be spending money on at the same time? (If you’re interested in advertising on Google, you may well be interested in social media advertising as well.)
This is the first aspect of targeting to find partners: picking the right types of businesses.
Beyond that, you need to be able to identify the types of partners who are likely to have clients who are qualified to buy your services.
If I want $2000/month SEO clients, they’re not likely to come from partners who sell web “designs” (templates) for $500 apiece.
They’re more likely to come from a bespoke design and development firm charging $20,000 per website build.
But – that larger firm will also have a much wider selection of potential partners from amongst my pool of competitors.
Let’s take my SEO business as a quick example. In order to buy website optimisation services, obviously, a client first needs to have a website.
This makes web designers and developers obvious choices as potential partners. Other options include graphic designers, logo designers, marketing consultants, branding experts, etc – anyone who might be employed by one of my potential clients at some point earlier in the timeline, before they get around to looking into SEO options (ideally, I want to be the recommendation they get before they even start actively looking for my services – this cuts off the competition before they even have a chance to pitch this potential client, giving you an unfair advantage).
Here’s an important point: many web development companies also advertise SEO services. At first, it would appear these are competitors, not potential partners.
However, I know in many cases they only have a small portion of the capabilities my business can offer, and typically they are limited to doing the on-page SEO setup but can’t offer the services required for an ongoing monthly retainer.
So in fact, far from being competitors, these may end up being perfect partners – they already have active buyers who have spent money on an initial SEO setup, and they can then develop recurring monthly revenue streams by outsourcing to me the ongoing work which is beyond their in-house capabilities.
Finding potential partners is one thing – convincing them you’re actually worth partnering up with is something else altogether.
Remember, the partners you really want – the ones who have qualified clients lists who will trust their recommendations – tend to have their pick of who they partner with. If I reach out to partner with someone, there’s a good chance they’ve already had ten other pitches from ten other SEO companies.
This may seem obvious, but it’s important to phrase your pitch in terms of how it benefits your potential partner.
Have you ever received a pitch email that was all about how much the pitcher needs your money?
“I’m a web developer and I really need some work, so help me out.” That’s what they might as well say. It would be more honest.
Do not use an identical form email for your outreach. Personalize as much as possible to the individuals you are pitching, based on an understanding of their business and how you can help them achieve their own goals and their clients’ goals.
Your pitch is:
THEY DON’T CARE WHAT’S IN IT FOR YOU. At least not right at the start. Unless you can make them think, “Hey, this might actually be useful for me,” you’re toast. Even if they did care what’s in it for you, it’s not going to help persuade them to partner with you, so it’s irrelevant.
There is no need to over-complicate things when it comes to the actual organisation of your referral or white label system. There are levels of automation you can apply here – there are many ready-made affiliate tracking systems out there, but you may find these unnecessary if you’re only managing a few key strategic partnerships.
In my case, because I deal with a relatively small number of high-value partners, I don’t use an automated affiliate tracking system. Rather, I simply bill clients and then pay each partner their commission from the sale once the payment is made.
If the volume you’re dealing with is low, manual tracking like this is sufficient – if you need to sell higher quantities and manage a large number of affiliates or partners, automation is key to making the system efficient.
What’s your experience with forming and nurturing strategic partnerships to grow your business? Any tips or techniques that have worked for you in the past? Leave a comment below.
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