"Using the Power of Joint Ventures to Increase Your Profits 30% or More" with Grant Segall
From the e-book "10 Minutes to E-Commerce Success", where 17 E-commerce experts share their wisdom for growing and scaling an e-commerce store.
"Adding a Revenue Stream to Increase Profits Using Flipped Joint Ventures" with Grant Segall
Karis Lima: Hi, and welcome to 10 Minutes to E-commerce Success. Today we're joined by Grant Segall. How are you doing today, Grant?
Grant Segall: I'm doing very well. Thank you for asking.
Karis: Great. Tell us a little bit about yourself and what you do.
Grant: I sure will. I run a Conversion Rate Optimization (CRO) agency. We work with primarily E-commerce clients, Software as a Service (SaaS), and lead capture or lead generation companies. What we do is we optimize website for conversions and growing revenue for those companies by optimizing their websites. Now we are also delving into the setting up partnerships between said companies where we grow their revenues by finding them strategic partners.
Karis: If I was considering working for your company, what would you say ... Why should we listen to you?
Grant: That's all right. I understand. The question is why would we work with you? Well, there's a number of reasons. First, we use a data-driven approach. We're not guessing as to why people are buying from you or figuring out why your pages aren't converting or your shopping cart isn't converting. We're using data, and we're making our decisions based off that. That data gives you valuable insights as to what your customer, your visitor, is looking for. Sometimes the data tells us they can't find what they need. I would say our team’s experience of working with over 60 companies, we've gathered quite a bit of intelligence on E-commerce and Software as a Service website. We've figured out, in a lot of cases, what works best on those websites.
Karis: Okay. Now, for the main reason we do the 10 Minutes to E-Commerce Success. The big money question, which is what is the one thing you do that increases the profits for an eCommerce company?
Grant: Okay. Well, that's a tough question. I've asked this to 16 other people before me, and this is going to be my answer. You would think I would say conversion rate optimization. That's great if you're doing millions of dollars in sales and you can afford the return on your investment. We usually work with larger companies above one million dollars in sales. I say if you're a smaller entity, even a larger entity, it's partnering up with other companies that might sell complementary products to what you do. The method we do that is called flipped joint ventures. I don't know if you're familiar with that concept. Are you?
Karis: Not really.
Grant: No? Okay. A flipped joint venture is basically you would go out and approach other companies that sell complementary products to what you are already offering. Say, for example, you are an E-commerce store, and you sell ... I don't know. This might be a simple example, but maybe you sell flat screen TVs. That's all you do is you sell flat screen TVs, and someone buys your flat screen TV, and then they start thinking, "Well, what other things do I need? Well, maybe I need a universal remote. Maybe I need brackets to hang this thing on a wall. Maybe I need a new cabinet or furniture that goes ... That the TV will hang in." You can seek out partners as you don't carry those particular products.
Here's the catch. The reason why I call this flipped joint ventures is because when you do a joint venture, most of the time, there's a high failure rate. Even Harvard University has noted, and I believe Entrepreneur Magazine as well, that most joint ventures fail. There's a very high failure rate, and that's because of the conventional method of setting up a JV is full of problems. It introduces multiple friction points, differences in list size, lack of a prior relationship with most of the partners you approach, and doubts from each side about getting paid. There's significant problems that derail many joint ventures before you get started.
The way we get around that is we do a JV flip or "flipped Joint venture" where the equation gets a 90-95% agreement rate from the partners you approach. This is why we work with companies to do this for them. Obviously, they can do this themselves. This is something any company can do on their own, but it can be time consuming. You approach partners, if you have a list, a sizable list of customers, and you offer to promote their products first. Don't expect a reciprocal mailing. Then, you have a much higher chance of getting accepted. Later on down the road as you sell these partners' products over a course of time, many of them are going to come back to you and say, "Hey, is there a way we can do another deal where we sell your particular products to our list?" You might get 20 to 40% of those people will come back and offer to do that for you as well. Then you end up getting the two-sided deal that you were after in the first place.
If you follow this consistent strategy of offering a joint venture, offering a new product to your list maybe once a month, we've seen companies increase their profits ... Not sales, but profits ... 30% on the low end and up to 70% on the high end. That's one thing I would recommend that all E-commerce stores look into as they're looking to grow and maybe they're stagnating.
Karis: That was quite an interesting take on growing your company's profit. Anything else before we go you would like to mention?
Grant: Just one more thing. I wanted to mention that the approach that I mentioned for doing these joint ventures, you are basically ... There's a number of advantages to it. You eliminate all the problems and frustration caused by the conventional approach of setting up joint ventures. You're going to get a 90% agreement rate from the partners you approach. You're going to get paid to build your relationship with potential partners, and you get to lock in a large revenue steam every month on a systematic basis.
If you follow the program and offer, like I said, one product each month to your list of subscribers, you can really grow your profits substantially with very little risk. You don't have to worry about product creation, product development, product fulfillment. It's all handled by your partner, so, basically, you're getting a method of growing your profits almost risk free. The caveat here is you need to find reputable partners that will deliver a good experience and have enough product in stock. Especially if you have a large list. Test the offer to a small portion of your list, and if everything goes well ramp it up! Most of the time you can do a 50% share of the profits with the company you are going to promote. Like I mentioned, do this once a month, and you have added another profit center to your business.
Karis: Okay. Thanks for speaking with us today. How can people find out more about ...? More information on you and what you do?
Grant: Oh, okay. Well, the easiest thing to do is just go to Tsunamiclick.com, and there's a contact form there if you want to reach us. It's on the home page. We're also going to be setting up a series of interviews. All that information will be on our website. Thanks! This was fun.
Karis: Okay. That's a wrap. Goodbye from 10 Minutes to E-commerce Success.