I want to talk about joint ventures and how to use a letter or an event as a potential joint venture. I’m a big advocate of joint ventures. I’ve done a lot of them and helped my clients do them. I think it’s one of the fastest and most economical ways to grow a company because ultimately it helps you gain access to a group of people that you can’t get in front of on your own.
A joint venture is getting access to someone else’s list. They’ve already spent all of that money building those relationships. For example, let’s just say if I was wanting to reach affluent people and I had a product that I was able to get access to, not that you could or couldn’t, but if just as an example, get the CEO to write a letter of endorsement or to approve a letter of endorsement to all their clients saying we value you as a customer, a client, or an owner and we’re always looking out for your best interest and, as a result of that, we feel like this is something that you should take a look at.
I would have a lot better chance of getting access to those people than if I had sent that letter in blind to that same list of people. That’s a method of joint venturing.
There are a lot of ways to joint venture but essentially it’s people or companies utilizing each other’s complimentary assets. One might have a product or service. The other might have a list. One might have some sort of intellectual capital and the other one might have the marketing capability. You have different ways of putting deals together. Joint ventures are strategic alliances that can be done in many different ways.
Let’s expand on, for just a second, the methodology of using joint ventures as they relate to events and talk about some of the ways that an organization that’s trying to reach the affluent could possibly utilize sponsorships or joint venture with other people to co-underwrite part of an event and some of the ways I’ve seen it done.
There is no reason that a company that’s really wanting to do some big things and access the affluent market could not get creative and go out and find other people who want to also access that market and put together an event that would be just a smash. And not only do you get the event put on at no out-of-pocket expense to yourself but you also look like the hero because you’ve pulled this whole thing together. So, you develop long-term relationships with your joint venture partners.
You need to know who are the other businesses that are talking to these people or might want to talk to these people.
Let’s talk about ways you can use joint ventures to access the affluent. Number one as if they already have a list that they’ve been selling to affluent people then they could leverage that list to put together events for their clients and relationship building events, referral generating events but get other people who want access to that event to underwrite the expense and really put on smash up events that make them look really good and yet not have any out-of-pocket expense. That would be one way that they could use joint ventures.
Let’s say the person that you don’t have the list but you have a product or service that is sold to the affluent that’s ideal for the affluent. You could do the joint ventures in a couple of different ways. One, you put the event together and then go to the person that has the list. Let’s say maybe it’s a high, high-end country club. Go to them and they say look I want to put this event together.
It’s going to be a killer. It’s going to make your country club look great. It’s not going to cost you a thing. You go out and do the leg work and pull together the sponsors almost as if they had the list but only because they’ve secured the list. Joint venturing could be very powerful for a person that basically has a product and no list and even no money for marketing.
Using these simple joint venture ideas can be an effective and inexpensive means of successfully marketing to the affluent buyer.
To summarize, my tips for utilizing joint ventures to access the affluent buyer are:
Determine your needs. Do you have a list, a product or access to a cross section of people?
Start networking in your area with other high-end businesses. You have similar goals, but different products.
Find creative ways to offer services without having to spend a lot of money.
I’ve seen these techniques used successfully with the super affluent. It will take time to pull something like this together, but even if you only get ONE NEW CLIENT, how much is that worth to your business?
The affluent market is a definable market that can be used to give valuable information to businesses and even governments due to the amount of disposable cash at its command. By carrying out an affluent survey you can gain an insight into what is in the minds of the wealthy: how they intend to spend their money, whether they intend to invest or spend and what they are looking for in the form of tangible luxury goods.
Although affluence can be defined in a number of ways, most in the USA regard affluent households being the top 10% with the highest disposable income – which is currently $250,000. That figure will change as people get richer or less rich and as inflation takes its toll on the worth of money. However, the affluent 10% is responsible for nearly 50% of all consumer spending across the USA.
What you can read into that figure is that it’s not all going to be spent on standard consumer goods and that there are going to be quite a few luxury goods included in it. Naturally, what’s luxury to one person is an essential commodity to another, but even though that is one reason why the term ‘luxury’ cannot be defined, it still represents expenditure on luxuries that will interest those businesses responsible for providing them.
The affluent market is therefore a very powerful one, so it goes without saying that an affluent survey is going to offer many businesses some very useful information – but what form should this survey take? A normal consumer survey will offer people multiple choice questions to determine their spending habits, what goods they buy and on what criteria they make their purchasing decision.
This is not so with the affluent market, particularly with their expenditure on luxury goods. You only buy one luxury yacht, jet or mansion once in a decade or so, and the past purchasing decisions of the wealthy may have nothing whatsoever to do with their future decisions. If you intend to survey the affluent market you need a custom affluence survey, designed just for your business or products, and asking questions directly to the wealthy people likely to use your product.
It doesn’t matter if that is tangible, such as high-end jewelry, luxury transport or expensive clothing, or non-tangible such as high-ticket luxury vacations or corporate events: a custom affluent survey can provide you with information that could affect your development and marketing for years to come.
By asking rich people:
What they think they will spend their money on over the next few years, If they have any projects in mind, What improvements they would like to see in products they currently use, Do they intend to spend at all next year or just wait? If there is something they wished they could buy but can’t because it doesn’t exist
You can get an insight into what’s in their minds, and how your firm could best meet their projected needs.
Keep in mind that affluent consumers do not go around buying luxuries all day every day: they frequently live frugally, eating at home and buying basically what you and I buy. Only every now and again they make a luxury purchase. However, their major purchases – the yachts, Rolls Royces and jet planes – tend to be planned in advanced, and their purchase arranged so as to cost s little as possible, making use of investment income or tax savings.
If you have this sort of information in advance over a broad range of products, then you can make use of the results of a survey of the affluent market to plan your business strategy to take advantage of these planned expenditures.
Will they tell about them? Maybe, maybe not, but while many wealthy people refuse to take part is such surveys, many do, because they know it is to their advantage. They are more likely to have their needs met if they make these needs known. They didn’t get where they are today by being stupid!
One person seeking to purchase one new product two years down the road won’t help you much, but if there are several, and particularly if you can spot a trend in the intentions of the affluent market, then you may be able to plan accordingly and make a killing – because you were ready to supply when they were ready to buy!