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logoSquareAnyone up for explosive sales growth? More profits? Greater market share? The good news is that there are two highly effective strategies designed to deliver on those very same objectives.

With a bit of imagination and entrepreneurial flare it’s possible to grow a small business quickly — even in tough conditions.

Both of these growth strategies involve leveraging the established assets of others in a legitimate and ethical fashion.

Ride on someone else’s coat tales

The first approach is to licence the use of someone else’s well known brand.

That means creating a product or service, which complements a particular brand and what it stands for. A great example of this can be seen with two makers of diggers. You can buy heavy duty boots with the Caterpillar name on them. There is also a range of tools carrying the JCB badge sold in the UK.

These consumer products compliment these two very well known names and take them into new markets.

Hollywood does a roaring trade through merchandising rights for everything from T-shirts to toys based on its blockbuster movies.

Reportedly George Lucas, the creator of the Star Wars franchise, made much of his multi-billion dollar fortune because he kept the licencing rights (Hollywood studios have since cottoned on to their enormous value).

Coming back to Caterpillar and JCB, these companies licenced (British spelling) their brand to a third party in exchange for a cut on every item sold. For the brand owner it’s an opportunity to generate extra revenue with someone else putting up the investment and taking the financial risks.

For the user of the brand name it can create a major competitive advantage leading to strong sales growth and cash flow.

Big name support

Many of the more experienced companies have entire teams dedicated to merchandising and in some cases even support their partners. This might include help with marketing, creating media exposure through to making valuable introductions to buyers at major retailers.

Riding on the coat tales of a famous name means instant customer recognition, the chance to charge premium prices, the ability to get distribution and to build a larger scale business. This can be a great opportunity for an entrepreneur.

However, this doesn’t suit every business.

Dealing with intellectual property can be tricky and there are inevitable restrictions designed to protect the brand’s integrity. Also, flying under someone else’s colours so to speak, may not build much equity value in the business.

Collaborate and monetise

The second approach is a lot easier and is available to just about any size of business. It involves collaborating or joint venturing with complimentary partners.

Big business does this all the time.

You’ll find that nearly every company in the FTSE 100 or the S&P 500 is in some sort of joint venture.

Smaller businesses, where this can have a truly dramatic impact, don’t use this strategy nearly enough in my experience.

In its simplest form this is a company with a product hooking up with a partner in a similar field and marketing that product to its customers. Both then share the profits on any sales made.

It could be an accountant marketing legal or financial services to their clients or a shoe maker adding a range of socks made by a someone else.

Reaching new customers at low cost

The first company with a product has the advantage of reaching new customers at no cost other than sharing the profits on any sales made. This is potentially much less risky than an advertising campaign and avoids having to pony up large sums of money that may never make a return.

Collaborating with the right partner can also shave many years off building a customer base and greatly reduce marketing costs. It’s much quicker than having to do lead generation from scratch, for example.

It can be a particularly powerful strategy for a start-up as it can quickly create vital cash flow. In turn that can reduce future funding needs, which involves selling equity and diluting existing ownership.

Massive returns on investment

For the second company with the customers, there’s the benefit of a new revenue stream without creating and investing in a new product or having to acquire new expertise, recruit new people etc … That potentially represents a huge return on investment, far more than it’s probably getting on its own products.

It can also help keep its customer base active – particularly if that company only makes a limited range of products or only does one-off sales as is the case with many small businesses. If you’re not regularly communicating and selling to your email list – it will quite literally atrophy and lose value.

With the right product and offering it can also be a great way to revive old customers and to make some money out of people on the list who generally don’t buy anything. It can also be a way to help with lead generation, particularly if the website receives a lot of traffic.

If the first company has done its job properly it will have sorted out the marketing strategy, product delivery etc … making it a very easy win for the partner with the customers.

These types of deals can be done between small businesses and with big companies. The latter however take more time and effort. Typically committees are involved and the decision making can drag on for ages.

The real beauty of this approach is that it’s very low risk for the partners yet it can generate huge returns quite quickly for both.

Must endorse

But the key here is that the company doing the ‘distributing’ must endorse the product to its customers and prospects with whom it has a relationship. It can’t just let someone else send out promotional emails to its list without explanation. That’s too close to spamming for comfort.

Those communications should come from the company with the customers or it should at least make an introduction. Ultimately, this is about leveraging relationships in a positive way.

The types of joint ventures that can be conjured up are limited only by the imagination and the will to execute them.

The key requirements are willing partners, good products / services, a target market that makes sense and that the money side stacks up for all sides.

This is a simple introduction to the area of joint ventures and partnering and I’ll shortly revisit this topic in more detail.

Want someone to do it for you?

At the moment, I don’t have much expertise on licencing, but if you would like to make more money from your email list with more products or you have a product, which needs more customers then feel free to drop me a line.

I can’t promise to help in every case and for this kind of deal I work on a performance basis and assist with the marketing if necessary. My email: justin@jjpassociates.co.uk


JJPAssociatesDuring the early 20th century the Italian economist Vilfredo Pareto observed a fascinating phenomenon. He found that 80% of Italy’s land was owned by 20% of the population. Following from that he discovered that about 20% of the pea pods in his garden contained 80% of the peas.

Thus the Pareto principle was born or the 80/20 rule as some call it.

Now you’re probably asking yourself what pea pods and early 20th century Italian property ownership patterns have to do with business and marketing.

A great deal actually.

Because understanding the Pareto principle could literally turbo-charge your profits.

And the point about the Pareto principle is that it appears with remarkable frequency. It’s not always 80/20. At the extremes it can be 1/99 or  30/70.

For instance, over a time a portfolio of long held shares will eventually see most of the profits generated just by a very small number of holdings. I know that from personal experience.

But what about business?

Well you’ll often see the same kind of patterns reoccurring. So for instance nearly all your profits come from just a small number of your customers and a small number of your products / services that are purchased far more often than the others. If you use many marketing channels you’ll probably find most of your business comes through just a few of them.

The trick is to home in on those 20 percenters, which are creating 80% of your business.

The super-profitable minority
So a good exercise is to clearly identify that small band of hard core customers, your real fans, who generate most of your profits.

And ask yourself: Who are they? Why are they such good customers? And then…. ask yourself how can I take better care of them and sell more to them? Next how can I find more customers like that?

The needs of that small group should therefore dictate your marketing and offering. It could even take you down the road of specialisation. And that’s a good thing because specialisation usually equals higher profit margins.

Clearly if that minority became 80% of your client base you’re going to start making a lot more money. The ROI on your marketing will go through the roof!

The vampires
At the same time there will be a persistent minority who generate most of the complaints and cause you the most problems, such as refunds. You want to get rid of those people as fast as possible. Ideally you want them to avoid you even.

One of the best ways to do that is to raise your prices. Over and over I’ve observed that most of these whingers are cheap skates, penny pinchers and people who love nothing better than complaining.

If you get too many customers like that they’ll bleed you dry and kill your business. You don’t need their business – let your competition have the pleasure of dealing with them instead.

Premium pricing is a great deterrent for these sort of people.

The 80/20 rule is so powerful that you can hardly afford to ignore it. Embrace it and it could quite literally transform your business and your marketing.


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