Within a month of partnering with superstar business consultant Jay Abraham, Chet Holmes International generated an additional $1 million in new revenue, $250,000 of which was pure profit.
“Everyone won,” says Holmes, CEO of the self-named company that sells Web-focused training programs. “It took two years to get Abraham to endorse us to his list. He sent out a mailer to 40,000 business owners endorsing my products. I have gone on to do years worth of deals with Jay Abraham, totaling more than $10 million.
“Jay found another product to sell to his clients. His clients got [a] new training product, and my products were exposed to an entire new group of people for the cost of a mailer.”
That’s what can happen when you link up with the right companies. But it has to be a good fit, one that generates new business for all involved and provides top-rate services or products.
“Before you can partner with a company, you have to establish yourself,” says Siamak Taghaddos, CEO of GotVMail in Weston, Mass., which offers virtual phone service to small businesses. “People are attracted to successful people, and the same thing [is true] with companies.”
GotVMail’s partnership with the National Association of Realtors is a good example. Its business development division spent a year pursuing the NAR, which it identified as a potential partner because of its vast membership – more than a million real estate agents, most of whom run small businesses. It was also a good fit for the NAR – a deal on phone service would be a useful value-added benefit for its members.
They made their pact and now, under the partnership, the NAR provides members information on GotVMail services, and GotVMail gains a long roster of new customers.
Partnering with a complementary company can take your business to new heights, broadening your customer base, advancing your products and even morphing your company into uncharted, but potentially profitable, territory.
It’s worked for Hank Stringer. Co-author of Talent Force: A New Manifesto for the Human Side of Business (Prentice Hall, 2006, $24.99), Stringer founded www.hire.com in 1996. During the past decade, Hire.com evolved through partnerships, “some small, some huge, some global,” always expanding what the site has to offer, he says. “Alone, we can only do so much. Partnered in the right relationship, the sky’s the limit.
Steps to a Productive Partnership
Do your research and identify a handful of good companies that might make great partners. Learn all you can about them. See if you’re a match in the most important ways. “First, have a clear understanding of their goals,” Stringer says.
Next, be sure their corporate culture matches yours. Laid-back companies don’t want to link up with rigid ones. When you find a match, he says, “find ways to work together.” Then, it’s time to meet.
Those were Stringer’s steps when he acquired a company called Angami, a leader in the referrals industry. “We needed complementary technology that would extend our own offering, and moving into referrals was an area of interest,” he says. It took three months in 1999 to create that partnership, though some may take longer to nurture.
“There is no client you can’t get if you just keep trying,” Holmes says. “Choose a handful of large clients you’d like to have and hit them so often and so hard with marketing that they get to know who you are. It’s cheaper to go after a small number of huge clients than to go after all.”
When you’ve found a potential partner, put the arrangement on the table. “Offer to share profits,” not gross revenues, Holmes advises, and clearly define what profits are considered to be. He pays his partners a commission for every sale he makes based on an endorsement or referral.
“It’s a pretty good deal for both of us,” he says. “We get sales faster because of the trust they already have with clients, and they get more income from the same clients.”
A decade ago, Holmes never would’ve thought that some of his current successful partnerships would be a good idea. He had to open his mind to take the company where it needed to go. Looking back, he says, he’s more than glad he did.
Lynne Meredith Schreiber is a frequent contributor to StartupNation.