The
Power and Profit of Affiliate and Joint Venture
Partnerships
by Kathleen Gage
Many
people marketing with the Internet are utilizing a
couple of very effective strategies to increase
revenues and market reach. Newer marketers may
believe these tactics are brand new and are some
great “secret” recently revealed. Anyone who has
been in marketing for any length of time knows these
strategies have been used for years in offline
marketing. When
utilized correctly they have been extremely
effective in lowering marketing costs while
increasing market reach and ultimately revenues.
In
offline marketing terms such as sponsorships,
partnerships and shared revenues were used to define
what is now referred to in the online world as
Affiliate Partnerships and Joint Venture
Partnerships.
Both
online and offline partnerships have incredible
benefits and the potential for unbelievable market
reach when done right. They can also have incredible
pitfalls when they are not well thought out and can
cause havoc to one’s market almost instantaneously
if not properly planned.
Affiliate
Partnership
In this type of
partnership, someone else (the affiliate) helps to
sell your product or service and receives a
percentage of that sale based on performance. The
affiliate markets to their customers and clients.
Common items to sell would be software programs,
eProducts, and seminar registrations. This type of
partnership allows for increased revenue streams
while providing added value to existing clients by
offering products and/or services that would be
beneficial to them.
One
challenge with online affiliate partnerships is the
inexperienced marketer who is encouraging people to
buy something they have not tried, know nothing
about and are basically trying to make a quick buck.
For an affiliate partnership to be most effective,
research what is being promoted and only offer items
that are a good match for the market being targeted.
Considerations
in choosing affiliate partnerships are:
-
How
credible is the product or service?
-
How
long has it been on the market?
-
Is
the market saturated with other people selling
the item?
-
Is
there a large enough market?
-
What
is your percentage of the sale?
-
How
and when are payments made?
-
What
is the reputation of the person you will be
selling the product or service for?
Joint
Venture Partnership
The primary
purpose of this partnership is cross promotion with
the goal of one company selling a product/service
while increasing market reach and database size for
all partners. A Joint Venture partner (JV) agrees to
send out a message to their market about the company
or product that Company A is promoting. In return
for promoting Company A’s product or service to
their market, the JV is able to offer some type of
incentive to Company A’s customer base. This
incentive will drive anyone who purchases Company
A’s product or service to the JV’s company. The
incentive could be a free item or a discount on an
item. Ideally, the incentive offer is free.
Assume
you are spearheading just such a partnership.
Let’s say you secure partnerships with ten
JV’s who each have a market reach of 100,000 and
you have a market reach of 100,000. With the right
partners your market reach will have gone less than
10% of what you would have had to over 1,000,000.
An
essential element of success in JV partnerships is
that everyone involved does what they agree to do.
With a well-organized partnership where everyone
follows through on their part, you can reap
incredible benefits. If not, you can have a huge
headache to deal with, let alone what it could do to
your company’s reputation.
In
a perfect world these types of partnerships would be
hassle-free. In reality, there are areas of
consideration, such as:
-
What
is the reputation of your potential partners?
-
Will
they follow through?
-
What
is the quality of the incentives they are
offering?
-
Is
the market you are targeting oversaturated with
these types of partnerships?
Affiliate
and Joint Venture campaigns may be one of the best
business and marketing decisions you can make or
they may not be a good fit at all. Make your
decision based on the overall objectives of your
organization. By doing your homework you will be
able to determine if this is a good fit for your
business model. In some cases it is a great match,
in other cases you may decide to walk away.
Kathleen
Gage is
a best-selling author, keynote speaker
and trainer who works with organizations who want to
increase their market position, sales and level of
achievement by going beyond the obvious. Visit www.kathleengage.com
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