Jay Abraham's Case Study #171
From: Craig Sallin
To: Jay Abraham
Sent: Friday, August 02, 2002 5:38 PM
Jay has often said that one of his most prized techniques is the Joint Venture. I decided to take him at his word. Especially since the cost or expense to do a Joint Venture is so small compared to regular advertising. And the results are so much greater -- again according to Jay.
I'm in the Emergency Preparedness, long-term food storage business. It is very cyclical. People either want to act prudently and cover themselves in case of emergencies, or they think it is a joke. Of course, when problems arise, crises hit and emergencies prevail, most have second thoughts about their skepticism. It is also generally too late to prepare when emergencies strike.
Therefore, I must find people who want to cover themselves for any type crisis. I don't really try to convince people to be self- sufficient ahead of time. It's too difficult.
Our company is called Food Reserves. We sell just that - food reserves, long term storage foods as well as self- sufficiency products.
So I set out to locate and joint venture with other suppliers of self-sufficiency products who I was not in direct competition.
I mailed out a form letter, which was personalized, to every company I could find. I told them I wanted to do a Joint Venture with them, whereby it would not cost them a thing and they would get 50% of the gross sales for simply sharing their customer list with me. They did not have to show me their customer list. Just show me some interest in the project. I would then work out a proposal that they would like and feel comfortable.
I sent out 50 - 60 solicitations. Eight people responded. Now, you know, that if an individual responds to your solicitation, they are ready. You just have to make them a deal. One of the most promising responses was from a company that sold non-electric appliances and hardware. Now, their customers really want to be self-reliant. That's what I wanted, like-minded customers.
Remember, I want to contact people who have the same profile as my current customers - self-sufficiency buyers. However, I don't want to be in direct competition with my Joint Venture partner. Now, all I had to do was make my Joint Venture partner an attractive arrangement. I suggested to him that I would draft a letter to his customer database to be printed on his letterhead and signed by him. I would pay for all expense. No cost to him. He didn't like it. Maybe because it was a direct endorsement by him. He suggested I make up a flyer with the offer. Then he would drop it in with all his outgoing orders. It could have a key code on it, which would identify him as the source. Done deal!
I immediately had the flyers made, key-coded and sent to him. It was an immediate success. Over the months he averaged $326 in commissions. I chose a basic product to offer to his customers - Survival Food Tabs. They retailed for $24.75, postage paid. I would give him $12.00 net per bottle sold. This was great for him. Found money. He has no expenses. Yet, every month he got an average of $326 from me, just for dropping the flyers I sent him in with his orders. I also included a monthly statement and a list of each customer name and the number of bottles they ordered. I also sent him a running tally of each month's total, plus an accumulated grand total to let him know how sweet this was for him. My cost was simply the cost of the flyers.
You may think I was giving away the store at $12/bottle. Not so. Along with my direct shipment to his customer of the Survival Food Tabs, I would send them information and a special offer on my other self-sufficiency products. It was understood, that once someone ordered the Survival Food Tabs, they were mine to follow up with other solicitations from me directly. This was where I made the real money.
I followed up forever with offers to these customers who "raised their hand." This type of Joint Venture was the standard format I used to go to other partners. I would print flyers, key-coded. They would include them in their outgoing orders or mail. I developed around 12-13 of these type Joint Ventures.
The lesson to learn here is to ask and listen to what your partner wants to do. They'll give you the format. That is attractive from their point of view. They'll make the deal up for you. You must keep an open mind. Think linear, as Jay would say.
Please feel free to contact me if you'd like to know any details about this that haven't been covered.
Respectfully submitted,
Craig Sallin
Food Reserves
PO Box 88
Concordia, MO 64020
315-488-6350 - phone
315-488-6595 - fax
www.foodreserves.com