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.
How to Get Clients Without the Risk of Losing Money
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?
How to Find Strategic Business Partners
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.
- Define exactly what you’re looking for. Just as you need to determine exactly who the ideal client is for your product or service, you likewise need to profile what your perfect partner looks like. Beyond that, you also need to profile THEIR customers so you can explain why your service is complementary to what the partner is already selling. You need to be able to pitch it in terms of a) benefits to the partner and b) benefits to their customers.
- Set up a Partners/Affiliates page on your website – begin by setting up a partner information page with a pitch and the essential details about your partnership program, with a strong call to action to sign up or contact you for more information. This will not only act as a traffic generator (you should optimise it for relevant keywords), and a landing page for advertising, but also a quick link to send anyone who is looking for more info. It should also act as a qualifying/filtering system to weed out partnership enquiries
- Create a targeted oureach list. Building from your ideal partner profile, start building a list of potential partner contacts. Find the names, emails and phone numbers of the individual people you need to contact at each one – don’t be lazy and spam a bunch of form emails through the company contact form. Put in the extra effort to engage on a personal level.
- Advertise for partners. Look into running Google ads, Facebook ads or other advertisers to your partnership landing page.
- Leverage your existing network. If you already have partners, ask them to introduce you to more. The easiest way to find people who match the profile you’re looking for is to talk to people you already know who fit that profile. If you don’t have existing partners, ask clients (eg each of my clients has a web designer who may be a potential partner for me). If you don’t have clients yet, start from friends, family and past work colleagues.
What Services Are Most Complementary to Your Own?
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.
How to Attract Strategic Partners
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.
- Walk the talk – the most important thing here is that you’re actually really, really good at what you do. Look at your competition, look at other businesses that might be competing with your for referral arrangements and partnerships with big players in complementary markets, and be honest with yourself. Do you look like the best choice to partner with, at a glance? Where are you weak? Is there a way to can turn your weaknesses into strengths? (eg If you’re smaller than the competitors, emphasise personal service and closer oversight of campaigns.)
- Be generous in your commissions – obviously you are limited to some extent here based on the margins on your products/services, but don’t be stingy with handing out commissions. It may mean the sales you generate from partners end up having a high cost-per-acquisition relative to other advertising methods, but remember, this is as close to risk-free client acquisition and you’re ever going to come. It’s often worth paying a premium to eliminate the risk of losing money, especially when you take into account the size and quality of projects a really good partner can send your way.
- Gather testimonials – just as potential clients will be swayed by seeing the positive experiences of your other clients, so will potential partners. Have at least a handful of solid testiomonials on hand to show potential partners so they know you can really deliver.
- Convert – partners and affiliates want to know the traffic and leads they’re sending you will not be squandered due to a poorly converting landing page or lacking sales skills. Get your closing skills tight, get your proposals and pitching tight, and have your website tuned to convert. If you’re going to pitch partners, you have to be a professional, and professionals don’t get gunshy at the critical moment. They close.
- Emphasise the dual value-add – remember, for your partners, it’s not just about adding an extra revenue stream to their business. It’s about giving them to the capacity to help their clients out even more, improving customer loyalty and lifetime customer value. That’s why it’s so important to emphasize to the best potential partners that you’re truly going to overdeliver for any clients they send you. By all means play to the fact that you’re adding an extra revenue stream to their business, but remind them that you’re actually improving their brand and expanding what they can offer at the same time.
Pitching Your Strategic Partnerships
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:
- Short and to the point
- About what’s in it for them
- About what’s in it for their clients
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.
Setting Up and Running Your Referral Program
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.