Creating Synergy

There is a way for small businesses to grow their market and create synergy without acquiring or merging. We call it a "Project Joint Venture."

Think of it this way: You have clients, another company has clients. Clients mean money. Your businesses are complementary and not competitive. Your products or services work well alone, but together they can produce greater results. That’s synergy. Working together may enable both of you to grow your businesses exponentially.

You’re each starting with an existing client base, and generally it is much easier to continue selling to existing clients than to win new business. If you effectively leverage each other’s clientele, your cost of sales goes down and your return goes up. If you can successfully present complementary products or services together, your offering is enhanced and becomes more attractive to a broader range of clients. By sharing marketing costs, you can effectively market beyond your mutual client base. Here’s how selling synergy might work for you.

Find Complementary Products or Services

Start by finding the right partner. Poll your clients for their interest in complementary services. To identify potential partners, look for similar target markets (such as law firms, seniors, female consumers), selling styles (home-based direct selling, consultative corporate selling), company size, and flexibility.

When meeting with a prospective partner, be fully prepared with concrete suggestions for ways you might work together equitably (see examples below) and what specific benefits both of you can expect to reap from the relationship. This will help you get a solid sense of the potential success of this partnership. Also, be conscious of your gut instincts—make sure you like, respect, and feel you can trust each other.

For some business owners, you may have to sell the concept of synergy. This will require sharing a fair amount of information about your companies. Some key questions to address: Are your goals aligned? Does the potential partner have the same perspective on clients as you do? Is your business driven by quick product sales or by customer referrals from long-standing relationships? If you determine you have the same goals, it’s time to strategically plan and execute your joint marketing strategy.

Team Up on a Business Pitch

Work with your partner to pinpoint the strengths and weaknesses of each business alone and as a unified force. Find strengths that intersect and put them in the forefront of any sales script or promotional material you develop. Make sure any graphic design elements and written messages will appeal to your target audience and set you apart from your competitors.

Know who your competitors are and how you stack up against them. Determine whether the synergy that is created opens up a potentially broader market than your combined client base.

Now you’re ready to establish your competitive edge as a joint force and communicate it in your pitch. Scrutinize your pitch carefully and share it with a few trusted colleagues to ensure that it comes across well and is perceived as effective by the target market. Remember, well-articulated marketing needn’t be expensive, but badly designed programs can be very costly.

Sponsor an Event (or Lend a Helping Hand)

There are many ways to market products and services jointly, but in most instances it makes sense to start small. For your first event, plan something that can be achieved with no more than a month’s lead time and requires no more than a week’s work. The goal is to test the waters, gain some exposure or business, and determine if it is viable to plan more complex events in the future.

Here are some types of events to consider:

• Sponsor a charitable event that appeals to your target market. You needn’t create the event; perhaps just purchase advertising or buy a table at which you can have your product or literature available.

• Host a client-appreciation event. A breakfast seminar or cocktail party might be the perfect forum to showcase the products, service, and professional acumen of both you and your partner.

• Plan a "special, limited-time offer." A postcard or direct email offer for a discount on combined services or "for clients of X, receive 10% off on Y’s service" and vice versa. This will enable you to showcase new products or move overstock items.

Share Costs

By carefully planning your budget and direction, you can share costs and actually reach a broader audience than if you go it alone.

Decide how much time, money, and physical resources you each have to invest in this venture. Carefully run the numbers to ensure both the viability and profitability of this venture. Include some slack in the budget for last-minute charges that might crop up. Once you’ve agreed on the budget, jointly sign off on it and then clearly delineate responsibilities.

It is highly recommended that a basic agreement be drawn up between the partners and a specific project and marketing budget agreed to. This aids greatly in managing the project and analyzing the ultimate profitability of the venture. Whether tracking a small event with a simple spreadsheet or actually opening and managing a separate bank account, you will be able to see clearly when and how costs are incurred and revenue produced. This will help greatly in planning future events.

Real Life Example – Retail Selling