How To Find, Contact and Persuade Strategic Endorsement...

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How To Find, Contact and Persuade Strategic Endorsement Partners

Have you ever bought something because someone you trusted endorsed that specific product or service? For example, if you just moved into a new part of town and your new neighbor recommended a specific dentist or doctor, would you be more or less inclined to use their services? Of course you would. In fact, you probably wouldn’t consider looking at any other options. And yet despite the fact that referrals and endorsements have a major influence on most people, very few businesses actually have any type of formal strategic partnership program set up to nurture these valuable relationships. Every business, no matter what its size, should implement a formal strategic endorsement program where they earn profits by recommending other businesses’ products or services to their prospects and customers? And in turn, they should have a formal program in place where they earn profit from other businesses recommending their products or services to their prospects and customers. This is an excellent strategy that any business can instantly employ to gain access to other business’s customers that fit your target customer profile… and immediately begin to generate more leads and attract new customers. Setting up strategic alliances can be a tricky proposition. The key is to work within the framework of your financial and non-financial resources by using yourself and your staff in such a way that you minimize your time, effort and investment. For example, the major credit card companies send monthly billings to every one of their customers. These are customers who are obviously interested in buying various products and services on credit. For that business to mail to this same extensive list of customers would be cost prohibitive, especially when you remember that you must mail repetitiously to customers before your marketing will produce significant results. But suppose you could pay the credit card companies a fraction of the mailing cost and have them INCLUDE your marketing collateral inside their billing letter. You would by “piggybacking” on their monthly mailing. You see this all the time, especially with rental car companies and various hotel chains. That’s because all business people depend on credit cards when they travel, so the rental car companies and hotel chains know that by partnering with the credit card companies they will reach a high percentage of their targeted business traveling customers… and do so for a fraction of the cost of the mailing. The businesses the credit card companies include in their mailings save enormous amounts of money by jumping on their loyal customer bandwagon. But consider this critically important point. If these businesses sent out their own mailings, how many of them would even get opened? With no name or brand recognition, most prospects today won’t bother to open the envelope. But you ALWAYS open your credit card billing reach month. By partnering with the credit card companies, they’re all but assured of getting 100% of their targeted customers to open and read their mail. There are two ways you can create strategic endorsements. The first involves you as the endorsee. This means that other businesses will partner with you and recommend your business to their prospects and customers. The second is where you’re the endorser. You will recommend your partners business to your prospects and customers. The key here is to closely match up your products and services with the wants and needs of your partners prospects and customers. Let’s begin by discussing ways to get other businesses to endorse you to their prospects and customers. Your goal is to gain access to the prospects and customers of other businesses that sell products or services that compliment yours? Consider the advantages you gain when you target your ideal prospects and then get someone they trust to refer you to them. This is similar to having your own separate sales force that you don’t


have to manage or pay unless they produce qualified sales. But best of all, this strategic partnership can increase the number of customers you can sell to tenfold, and in most cases, without any risk or initial cost to you. That’s because the cost to reach these “qualified” prospects is a fraction of what it would cost you in advertising to find them. Your “strategic endorsement partner” already has their trust. Their endorsement instantly creates a feeling of trust before you ever make them your offer. There are three situations to consider when creating a strategic partnership with other businesses. 1) They endorse your product or service to their customers that have a need for what you sell, but they

can’t fulfill that need themselves. Your partners can provide their current customers and prospects with a valuable service by promoting your favorable prices, terms and offers to them. Their customers are receiving the things they need to improve their lives and in turn, this helps your partners maintain and often improve their lifelong relationship with them. 2) A specific purchase they make triggers needed or related additional purchases Many additional purchases are “triggered” by an initial purchase. If you sell a product or service that follows from an initial sale, this sets up the perfect strategic endorsement partnership. For example;

• A new bride purchasing her dream wedding gown will also be selecting flowers, a venue for her wedding reception, a limo service, a wedding cake and so on.

• A home buyer must choose a mortgage broker, a title company, a termite inspector or a home inspection company shortly after purchasing the home.

• A gentleman buying flowers for his anniversary may be looking for a nice restaurant, diamond earrings or a necklace or possibly that special vacation getaway.

Would you agree that any wedding caterer or florist would be chomping at the bit to have the wedding dress shop notify them of every bride-to-be that was purchasing a dress from them? Better yet, what if the dress shop personally endorsed their services to their customer? Are you starting to see the value in this strategy? 3. When they have prospects inquire about their services but fail to buy These are prospects that consider purchasing your partner’s product or service but for whatever reason never complete the purchase. Your partner’s strategic endorsement can turn this into a win-win scenario for both of you when they recommend these prospects purchase from you. There are several reasons why this might happen. The prospect may want to add new landscaping, but your strategic endorsement partner only handles lawn maintenance. By referring this prospect to your landscaping company, you would get the job and in turn you could hire the lawn maintenance company to handle that portion of the job and pay them a referral fee as well. There are also times when a business is simply too busy to service the prospect in a timely manner. Have you ever contacted a business (typically during their busy season) and you hear them say “I’m sorry, but we’re swamped right now and won’t be able to get you on the schedule for at least six week?” How often do you sit around and wait for that business to decide they finally have the time to service you? You don’t, do you? You immediately begin searching for someone else. When this type of situation arises, this is a guaranteed customer that’s being let off the hook. Consider this scenario. A bride-to-be calls a hotel to book her wedding reception and discovers that it’s unavailable on her wedding date. She will immediately begin to call other hotels until she finds another facility with a large enough banquet hall to accommodate her wedding party, including the hotel rooms she will need to book for her out-of-town guests.


So what if this hotel agreed to a strategic endorsement partnership with another hotel of equal quality? The first hotel can now tell the inquiring prospect “I’m sorry, we’re already booked for that date, but may I make a suggestion? Janet Smith is the wedding coordinator at The Luxury Hotel. They have a completely renovated Grand Ballroom that is nothing short of breathtaking. I would be happy to call her on your behalf to see if they have availability.” You could even offer special pricing, discounts or offers on behalf of your partner (with their approval) to help close the sale on their behalf. “If I call on your behalf I can save you 10% on your entire wedding package because of our affiliation with them.” Can you see how this would motivate inquiring prospects to agree to this arrangement?

Now let’s discuss you endorsing other businesses products and services to your customers. In this arrangement, you offer your prospects and customers additional products and services that you don’t sell, but they typically purchase (or plan to purchase) from someone else. Create a list of qualified businesses that can fill your customers unmet needs, and you will see a dramatic increase in your profits without having to do a thing. An interior designer would love to know the names and addresses of the customers who purchase the latest paintings from your local art house. These customers are the exact same customers that buy from them as well. The interior designer also realizes that it will cost them anywhere from $25 to $100 or more in marketing fees in order to position their marketing message in front of them. For most businesses, marketing to the masses is not realistic. The cost is simply too great. Consider these five situations where you can easily endorse other businesses to your customers. 1) Endorse your partner’s product or service to your customers that may have an unmet need, but that you don’t currently offer. Prospects and customers prefer to do business with those they trust and respect. Since they’re your current customers, you’re in a preeminent position to recommend additional related or complimentary products and services that you don’t offer. Your recommendation can save your customers money, time and hassle. When you can fulfill most or all of your customers needs, you get them in the habit of purchasing from you. Consider your situation as a business owner. Most businesses today have an accountant that prepares their quarterly taxes. That accountant is in a trusted position, and you will typically follow their recommendation when additional needs arise. For example, the accountant may determine your business needs a special form of insurance, and could recommend an insurance company that specializes in this unique insurance coverage. Or perhaps the business has some legal challenges in which case the accountant might recommend a business attorney. Since you trust your accountant to handle your financial situation, you will typically trust their recommendations for other needed products and services without question. But the accountant could take this to an entirely new level if they so choose. What if they recommended an IT company, an office supply company, a copy machine dealer, a payroll service or a company that specializes in SEO? These are services that most small business owners need, and yet it’s a hassle for them to find reliable service providers on their own. Since you have already established a measure of trust and respect with your customers, your recommendation will be followed the vast majority of the time, especially when it saves them time, money, and the hassle of searching for these providers on their own. In most cases the accountant would receive compensation for each referral, but never forget that just their recommendation alone helps to cement their relationship with their customers, and that can keep their customers buying from them for a lifetime. 2) The timing of the sale


As we discussed earlier, many purchases lead to additional purchases. Often those additional purchases occur immediately after the initial sale. If you know that a sale is about to take place, such as the accountant we discussed previously, that information is priceless to a whole host of strategic endorsement partners. 3) When your customers relocate or transfer Approximately one out of five families moves annually. One quarter of them move out of state and close to half move outside of their current community. Obviously local business owners have no chance of retaining the business for those customers moving out of the community. But suppose you forged a strategic partnership with an entire network of business owners in other parts of the country that market the same products and services as you do? And if your business is regional or national, then the one quarter of your customers moving out of state can represent a wealth of opportunity for your business. For example, banks, franchises, dry cleaners, auto repair shops, restaurants and so on often have a regional or national presence. Even those businesses that don’t have a regional presence often offer high dollar services that can command a lucrative endorsement fee from a strategic endorsement partner that could result from making one simple phone call. Consider an attorney who could endorse another attorney located in your current customer’s new community. An accountant could do the same thing. They could jump online, find one of their fellow accountants that specializes in the same services they provide, contact them and arrange a strategic partnership complete with an endorsement fee. If the lifetime value of the new customer is high enough, the endorsement fee could be as high as the first year fees charged by the new business owner. A building contract, home remodeling contractor, landscaping service, realtor or a home builder could also fall into this arena. 4) Prospects that inquire about buying what you sell but fail to do so

How many times have you gone to buy something but didn’t find what you were looking for? It may not have been the level of quality you wanted. Your product or service quality level may be more than what your prospects need, or it may be lower than they were expecting. You should have strategic endorsement partnerships set up to counter both contingencies. If you own a discount carpet store and a prospect comes in looking for new carpeting for their showcase home, you should be in a position to recommend your strategic endorsement partner that owns the high quality carpet store down the street.

There are going to be times when your product or service simply doesn’t meet your prospects buying criteria. Prospects look for specific sizes, colors, makes, models, brands, styles and so on. You can’t carry everything in an attempt to please everyone. However, never lose out on the opportunity to provide your prospects with exactly what they need, and earn an endorsement fee in the process.

As an example, someone looking to buy a new car has a multitude of choices facing them. Most of them have no idea what they need for their specific situation. The smart sales person will conduct a “needs analysis” to discover exactly what their new vehicle needs to provide. Suppose you sell Toyota sedans but you discover your prospect needs a vehicle with a ten thousand pound towing capacity. This prospect obviously needs a truck or top line SUV. In the event the sales person can’t meet that need, they should be ready to direct them to one of their strategic endorsement partners. After all, if you determine that the prospect is not going to buy from you anyway, why not profit by simply asking a few qualifying questions and then directing them to someone else that can meet their needs.

NOTE – Just the fact that you took the time to help this prospect find the right vehicle for their specific situation can lead this prospect to become your customer for life. They remember this superior level of


service, and next year they may have a family member that wants to buy a new car. There’s an excellent chance you will top their list of recommendations. In fact, you can help insure this becomes a reality. Consider sending them a letter after they purchase from your strategic endorsement partner that says something like this: “I was delighted to hear that Superior Truck was able to fix you up with the perfect vehicle. In the future, let me know if we can be of service when you decide it’s time to purchase that new car to compliment your new truck. I’m enclosing our recently released new car catalog along with a voucher for free lifetime service with us for all new vehicle purchases. In addition, we have just finalized a new arrangement with our local bank to provide all new vehicle purchases with zero interest for one year, saving you thousands over the life of your loan. P.S. Do you know of any friends, family members or work associates that may be in the market for a new car? If so, please complete the enclosed postage paid postcard with their names and we will gladly pay you $250 or provide you with a 10% credit towards any future new car purchase when one of them purchases from us.”

But consider this one final point. You now know this customer just purchased a new truck, even though they didn’t buy it from you. Ask yourself what else might they be interested in purchasing? What other “complimentary” products or services might they need or want to go with their new vehicle? A custom paint job? Alloy wheels? A new boat? Couldn’t you now endorse other such providers to these customers?

5) When you can’t service your prospects for some reason There are often times when someone inquires about your product or service and you simply can’t help them. You may have run a sales promotion that produced more sales than you anticipated, or your supplier may be out of stock and unable to supply you with a specific product. Most prospects won’t wait for you to provide them with what they want, and they typically seek out someone else to provide for them. This provides you with an additional opportunity to endorse someone else that can help them? Just be sure you receive compensation for your efforts? It was your marketing, your customer service, your endorsement that first engaged this prospect. It’s only fitting that you should profit from your time, energy, effort and investment. Whether you’re an endorser (where you recommend businesses to your customers) or an endorsee (where others recommend you) there are three broad categories of endorsement systems for you to consider. 1) Passive Endorsement Systems A passive system means you have no control over the endorser (your strategic partner). In fact, the endorser has no real motivation to recommend your specific business, or for that matter, your specific product or service. A passive system basically consists of a loose agreement between you and your partner to “recommend” each other’s business when appropriate. There is no guarantee they will, and there’s no guarantee that your business will be the only one that sells your product or service that they will recommend. The endorser has full control over when, if and how they will recommend you. For example, a landscaper may tell the lawn care company that they will recommend them to all of their clients, so naturally the lawn care company indicates they too will refer the landscaper. This “non-committal” agreement defines a “passive” system. Unfortunately, the landscaper may have three other of these “non-committal” verbal agreements with your competition. So the best the lawn care company can hope for is they receive just one third of the work the landscaper refers. The key is to capture a larger share of this pie. The problem with this type of passive arrangement is that the landscaper has no real motivation to refer just your lawn care business… or for that matter, to even suggest that every customer consider using a lawn care service.


In a passive system, you have no idea whatsoever how or if your partner is presenting you to their customers. Renting a mailing list from a business that has the same targeted prospects as customers for your business is another type of passive endorsement. This does help you target qualified prospects and can dramatically reduce your marketing cost. However, since all you did was acquire this list from someone that targets the same customers as you, you receive no personal endorsement from them, so most of these customers will treat your mailing as “junk mail.” 2) Semi-Active Endorsement System In a semi-active system, a business agrees to include another business’ marketing material when they contact their customers but does not explicitly recommend them. The credit card companies that include the promotional materials from the rental car companies or the hotels are prime examples of a semi-active system. Make no mistake about this type of system. This is basically nothing more than a strategic marketing system. The only opportunity here is the credit card companies use the power of recognition to get their customers to open the envelope and look at the contents… nothing more. You as the “ride-along” have no assurances that your mailing will receive anything more than a cursory glance. This does give you a slight advantage over renting a list that we just discussed. When you rent a list, you’re mailing to prospects that have no idea who you are or what you do. With the semi-active mailing, your chances of getting your prospects to at least read your marketing collateral go up dramatically. A semi-active system also includes when a business puts you on their preferred provider list. The landscaper did this in our previous example when they referred three additional lawn care companies. Many companies actually publish a vendor list containing multiple businesses all performing the same service. Although a semi-active program links needy customers with qualified product and service providers, they do absolutely nothing to position your business as being unique or special, or why a prospect should consider buying from you instead of the other competitors on the list. Let me illustrate the hierarchy of endorsement methods we are climbing. If you’re a lawn care specialist and you rent (passive) the landscaper’s list of current customers, your costs to reach this targeted group would be low – especially if you narrowed it down to customers making more than $50,000 annually and that live within a five mile radius of your business. This is far preferable than sending out thousands of letters to homeowners in general. Most homeowners receiving your mass mailing will typically read it ONLY if they are currently dissatisfied with their current lawn care provider or they’re looking to select one. If you write a compelling letter with an irresistible offer, you will get some new business from this list. However, if the landscaper mailed your promotional piece (semi-active) to these same customers, the vast majority of them will at least open the envelope and skim through your material. Research shows this typically increases readership and response rates by 500% or more. But wait. There’s a way to dramatically increase prospect interest and response rates. Simply partner with the landscaper and have them actively endorse you to their clients (active). This typically increases interest and response by an additional 500%. This communication can take place in the landscapers monthly mailing, a direct mail letter or at the actual point of purchase. The letter would tell the landscapers customers: “How your lawn care service performs a spring lawn care assessment to insure the right mix of seed, fertilizer and weed killer is applied at the right times and in the right quantity. How your team takes extra care when trimming and pruning delicate plants and shrubs. How they not only edge the sidewalks and walkways, but they power vacuum all the surfaces until they are spotless.


The landscaper can then tell their customers how you’re pricing is the same as companies that provide none of these additional services, and how the landscaper has negotiated a special discount or bonus for their clients, along with a special satisfaction guarantee where if the customer is dissatisfied for any reason, the lawn care provider will come back out for free until the job is done to the customer’s complete satisfaction. The landscaper could share several testimonials that talk about the incredible service the lawn care service provides and how they used a different company in the past that charged 25% more but delivered only half the service. Now consider the fact that the vast majority of the landscaper’s customers trust and respect them implicitly, especially when it comes to their property’s visual appeal. Would this letter have a major influence on those customers that are not only dissatisfied with their current lawn care provider but also those that are mildly indifferent as well? Wouldn’t their endorsement when coupled with the savings (or bonus) offered by the lawn care provider be both powerful and appreciated by their clients? And perhaps best of all, this endorsement doesn’t cost any additional money over and above the landscaper’s average monthly mailing expense. But consider the difference in response rates. It’s strategies like this that can enable a small business to double or triple their annual revenue virtually overnight. 3) Active Endorsement System As you have just witnessed, an Active Strategic Endorsement System has you controlling the endorsement activity along with the content of the endorsement message as often as possible. Consider our previous example of the landscaper. What if the landscaper recommended the lawn care service provider to every customer they serviced? What if they could convey the additional benefits the lawn care service provides that is over and above all other lawn service providers in the area? The landscaper’s suggestion alone would compel the customer to want to inquire further. Consider this example. My wife and I recently installed an outside hot tub. We both love stone work and our plans called for stone to be used across the base of the hot tub along with a stone fire pit for ambiance. After seeing our plans, my neighbor decided to build a similar project. Based on our stone work designs, they added more than $10,000 in stone work to their project. In this example, I was actually the one that cross sold my neighbor on the stone work. However, if the hot tub company had used this same strategy, they would be able to sell many more hot tubs based on this similar concept. In this example, the owner of the stone work business can offer additional benefits to the hot tub company that makes them unique and offsets their business from all of their competitors. Now suppose the stone coontractor could also offer to teach them how to up-sell and add additional cross-sell services; how to create additional revenue by creating a “hot tub lifetime maintenance agreement;” and how to implement their own active referral system. Would it be reasonable to assume that the hot tub company would feel extremely compelled to enthusiastically endorse this stone contractor? Remember in this example that the stone company is the endorsee. They’re being recommended by the hot tub company who is the endorser. This same process works in reverse as well. The stone contractor becomes the endorser and recommends the hot tub company. After all, do you think that people who are interested in beautifying their home with stone work might also be interested in adding a hot tub to further enhance their lifestyle? If so, do you think that most of them probably have no idea who they would use to install a hot tub? What if the stone contractor used strong rapport building techniques to create a relationship with every customer they serviced, and then followed up with them until they were ready to consider a hot tub? Consider the fact that by helping the hot tub company attract more clients, the stone contractor produces additional revenue for themselves, both in stone work and in endorsement fees.


And finally, isn’t it standard behavior that most prospects looking to install a hot tub typically meet with several hot tub companies… and in the design phase decide to add stone work to the project? Is it probable then that they might call a stone contractor for various design ideas and to receive bids for the project? Does this now provide a unique opportunity for the stone contractor to endorse a specific hot tub company – especially if the stone contractor was financially motivated to do so? Use these examples to stir your creative juices and start asking yourself if this is a strategy you can adapt to your specific business as well. These strategies apply across the board for most businesses There are three distinct types of businesses today. They are “repeat businesses,” random repeat businesses” and “single purchase businesses.” Let me provide you with examples for each business type… Repeat businesses Dentist Consider the fact that most people today don’t require dental services like they did in the past. Tooth decay, cavities and fillings have almost been eliminated with the use of sealants. Most patients see a dentist to maintain or enhance their appearance. Today’s dentists specialize in general dentistry, straightening and aligning their patient’s teeth, as well as teeth whitening and caps. But these patients are prime candidates for additional “appearance enhancers” such as hair restoration (both men and women), cosmetics, vitamin supplements, weight loss, plastic surgery, Lasik surgery and so on. The dentist can create an entire consortium of additional “appearance specialists” and endorse them to his patients. In turn, they can endorse the dentist as well. Random repeat businesses Carpet Cleaning Company – suppose you owned a carpet store. Carpet cleaning companies frequently come across carpeting that simply isn’t salvageable when it comes to cleaning. Stains that are impossible to get clean as well as pet urine can wreak havoc for any carpet cleaning company since all of them offer a 100% satisfaction guarantee. In these types of severe cases, the carpet cleaner is much better off to recommend replacement versus cleaning. So why should the carpet cleaning company lose out on this business? They shouldn’t. The carpet store owner can create a strategic endorsement partnership with several different carpet cleaners. When the carpet cleaners run into these extreme cases, they can hand the home owner a “voucher” entitling them to a 20% carpet discount along with free pad and installation. Do you think that might spur any homeowner to at least contact this carpet store owner? Of course. Naturally, the carpet cleaner receives financial compensation for their endorsement, and quite possibly could make MORE money through their referral than the actual carpet cleaning itself. The reverse could happen as well. What if the carpet store handed a “voucher” to every customer making a purchase that entitled the individual to a 50% discount on their first two carpet cleanings… provided they take place within the first year of purchase. This establishes a repeatable pattern with each customer who is now “conditioned” to have their carpets cleaned by this one carpet cleaner at six month intervals. Single purchase businesses Home Inspector – when someone purchases a new home, they often rely on the services of a home inspector to uncover any problem areas in the home prior to purchase. Such problems could include electrical, plumbing, roof, mechanical, structural, foundation and so on. Home inspectors are uniquely positioned to know exactly what repairs the homeowners or the buyers will be required to address prior to the sale. This gives them the ability to recommend to these individuals the various companies that can solve these problems. If the home inspector ethically determines that a new roof is required, that termite damage needs repair or electrical work must be brought up to code, isn’t it a huge benefit to the client if the inspector could


recommend a reliable and reasonable company or contractor to perform the work (assuming there are no professional or legal restrictions preventing such an endorsement)? As you can see, a strategic endorsement partnership can work for virtually any business in any industry. So let’s get down to the best ways to implement this strategy. Step 1 Select your preferred endorsement strategy There are six implementation techniques you can use when applying these strategic endorsement opportunities (passive, semi-active and active systems) within your business. Keep in mind that it’s always preferable to be the endorsee than the endorser. The endorsee is the beneficiary of new customers whereas the endorser typically earns additional revenue only in the form of an endorsement fee. Implementation Technique #1 – Contact targeted strategic endorsement partner’s whose prospects and customers have a need for your product or service and gain their agreement that they will recommend you and you will do the same for them. We discussed this technique earlier and pointed out that this is typically the least effective of all the techniques because you have no control over the delivery of your message. However, this can be a decent starting point if you presently have nothing in place. Some suggestions to improve the effectiveness of this technique would include the addition of incentive offers for your strategic partner, along with informing them on the major benefits your product or service provides to their prospects and customers. Flyers, brochures, pamphlets, CD’s, DVD’s will dramatically improve your results if your product or service requires a demonstration. These simple marketing tools can have a profound effect when conveying your message and benefits. If the local hardware store offers their customers a list with the names of 5 different home remodelers, but your business is the only one that provides an in-depth, full color brochure loaded with remodeling ideas and pictures of completed projects, wouldn’t this greatly increase your chances that they will select you over the competition? This technique can be as simple as contacting businesses with your targeted customers, obtaining a verbal agreement to recommend your product or service to their customers… and offering them an incentive for their endorsement. You can then agree to provide the same service to them as well. Implementation Technique #2 – Leverage your own customer list by renting it to other businesses that could profit by marketing to your prospects and customers or consider renting their list for your own marketing campaign. Remember that this is a passive system. Renting your list merely authorizes that business to sell direct to your customers. This list can be determined by the extent you have your list “segmented.” If your list isn’t segmented by specific products they purchase or services they prefer, then you might consider renting a list that includes all of your customers. If you have a segmented list, you can rent specific subsets of your list that contain prime prospects for this business. For example, a chiropractor could easily determine which of their patients have specific types of pain such as back pain, leg pain, sciatica and so on. They could then rent each subset of patients to a health supplement company that offers specific supplements that target those individual areas of pain. When you rent your list, you can permit them to mail to the list only once… or they can pay a higher fee and mail to them multiple times. We recommend that whichever level you choose you maintain control of each mailing so you’re not sharing your valuable list of names with them, except for those that inquire about their offer. Implementation: As the endorsee, this involves nothing more than asking in person, by phone or through direct mail targeted businesses with access to your targeted customers to let you use their list for a fee - either on a per name or per order basis.


As the endorser, if your business presently has a list or database of prospects and current customers, you should consider renting your list to immediately increase your cash flow. Renting your list is as simple as informing targeted businesses that you have an available list of targeted customers that have a need for what they sell. You should also inform them of the cost of your list, and always include a detailed description of the benefits and results they can expect to receive from your list. You also have the option to sell your list to a list broker but you lose all control over who rents your list, and we recommend that you never let anyone else have access to your list. You should ALWAYS maintain control of the mailing process. Ask your partner to supply you with the emails, postcards, direct mail letters, etc and you control the arrangement for sending these out to your list. Emails can be sent through a simple autoresponder, but consider using a mail house for physical marketing collateral. These costs should be paid by the endorsee. Implementation Technique #3 – Offer businesses the opportunity to be added to your current customer mailings without your endorsement (semi-active system). In the credit card example, we discussed the strategy of “piggybacking” off your strategic endorsement partners established relationship and excellent rapport with their current customers. In this semi-active system, you merely reverse the process. Here you’re the one controlling your list and deciding who you will introduce to your customers. Be sure you stick with products and services that compliment your specific product or service and be sure they add extraordinary value to your customer. The ideal outcome is your customers will actually thank you for the recommendation. This opportunity doesn’t require any additional time, energy or effort on your part. It’s the strategic endorsement partner’s responsibility to provide the marketing collateral while you merely include it in the mailing to your list (which you can outsource). Implementation: As the endorsee, offer targeted businesses a fee to include your marketing collateral in their mailing. Be sure to ask if they have a segmented list. If so, consider limiting the mailing to your specific service area or to a specific buyer group. For example, “all back pain sufferers in the Westport vicinity.” As the endorser, offer to include the business’s marketing collateral in your mailing. Be sure you remember to inform them of the benefits they can expect to receive. Implementation Technique #4 – Endorse other businesses to your prospects and customers at the point of purchase (and vice versa). The point of purchase can be a powerful endorsement ally for your business. When someone buys something, they’re in a “purchase state.” They’re actually conditioned at this stage to buy more. Recommending your endorsement partner and making them a part of the sale will never be easier for you. There are some major drawbacks to this technique though.

ü It often takes months (or years) to reach all your active customers ü You greatly reduce the number of customer contacts due to your inability to reach inactive or

seldom seen customers However, if your business doesn’t have a compiled customer list, then this may be a valuable method to consider. As an example, a home inspector may point out to their customer that an alarm system reduces their home owner’s insurance premium by 15%. If the customer seemed interested, they could recommend a quality company that offers a preferred system at reasonable prices. Never forget to strive to endorse businesses that your customers will see as a major benefit to them. And for your part as the endorser, this is absolute found money for you… and once you have your system set up, this requires very little time, energy or effort on your part. Implementation: As the endorsee, seek out strategic endorsement partners whose customers need your product or service and show them the benefits their customers can expect from their endorsing you.


Suggestions… this is an active system, so you need to plan to educate your strategic endorsement partners on the benefits you offer and be sure they fully understand the ways you differ from your competition. You must be prepared to supply them with marketing collateral such as flyers, brochures, booklets or fact sheets. Instruct them to hand these out to their customers, and consider developing simple scripts that can help them or their staff sell on your behalf. As the endorser, this is an easy technique to implement. After all, what business doesn’t want free customers or automatic orders? Again, this is an active system, so you need to plan ahead. Create a script so you or your staff can properly and intelligently convey your partner’s best qualities and ultimate benefits. Ask them for any written promotional material they may already have available. If they have nothing, consider a brief interview with them to determine the benefits they offer. Implementation Technique #5 – Endorse your strategic partner’s business to your customer list using direct mail and vice versa. This is a highly preferred method over the others we’ve discussed. This active system gives you complete control over the messaging used for the endorsement. This active system offers you three compelling advantages…

ü It prevents you or your partner’s staff from delivering an inconsistent message or offer to the customer.

ü Direct mail provides you with the unique opportunity to present your entire “sales pitch.” This is NOT an option in most cases at the point of purchase.

ü It offers you the opportunity to connect with each customer type simultaneously (active, inactive and

those that inquired but never purchased). This technique does require your time, effort and energy. You will need to draft a compelling letter to your customers that endorse and highlight your partner’s product or service and the benefits each one provides. Implementation: As the endorser, you want to control and have the final say in the editing of the letter. You want to remain vigilant and look for outrageous claims or a focus on features instead of benefits. Most businesses tend to market their product or service in terms of features, when it’s the benefits that prospects actually buy. The offers you make in the letter should focus on how you or your partner have negotiated a lower price, more lenient terms or special guarantees in order to compel the customer to take action. Consider offering a 30 day, no questions asked guarantee. Ask your partner to allow you to draft the letter. If they do it, chances are great it will never be completed. When you endorse your partner and their product or service, be sure you get all of their current promotional material. If none is available, consider interviewing them to uncover the benefits they provide Please note that none of this is difficult. It simply requires a small investment of time. The actual implementation is a simple process that anyone can do. As the endorsee, it now becomes YOUR responsibility to provide your strategic endorsement partner with the exact letter you want them to mail on your behalf. To encourage their participation in this partnership, be sure you allow them editing rights. This allows them to voice any concerns they may have over words or phrases they may deem as hype or coming across as too promotional for their comfort level. After all, these people are their customers and their reputation is on the line when endorsing you, so listen to their concerns and respond appropriately. Implementation Technique #6 – Refer your strategic partner’s business to your customers when their specific purchase or actions triggers their buying impulse.


This technique, while similar to the point of purchase and endorsement by letter techniques mentioned previously, applies specifically to certain purchase actions that can be identified before they take place. For example, when a business customer purchases or inquires about purchasing a new office communication system, they typically purchase new communication and routing software to upgrade the system as well as hire a communication specialist to install and train employees on the use of the new system. Their purchase triggers the additional sales, and if the majority of customers follow this same pattern, then a strategy can be created and followed to insure these additional sales become a reality. Once you identify these “buying triggers,” you can create a strategy that reaches these customers at their peak purchasing time, perhaps even before the final purchase decision is made. Use this technique at the point of purchase, for all phone orders as well as mail orders. If you have ever bought a product or service after watching an infomercial, you were offered several additional complimentary items during that conversation. Even when the item you ordered was delivered, it included additional offers for complimentary products and services. This all comes back to capitalizing on the customers “peak purchasing” state of mind. As the endorsee or the endorser, your job is to identify these “purchasing triggers” and then employing one of the techniques covered above. Step 2 Determine the benefits that both the strategic endorsement partner and the customer would receive from the strategic endorsement partnership First, what is it that will compel these targeted customers to want to purchase your product or service in the first place? What benefits will they receive? Will they experience weight loss, improve their work performance, save time, make more money, earn special recognition, experience improved health, improve their appearance, receive better service or experience less inconvenience? Second, what are the benefits the strategic endorsement partner will receive by offering your product or service to their customers… or by offering their product or service to your customers? Will they receive additional revenue, generate new prospects, attract more customers, earn higher profits, establish better rapport, improve current client relationships or reduce customer attrition? Let’s now determine the profitability of the technique you select so you can determine the best one for you to focus on as you begin to implement this strategy.

Step 3 Calculate the “marginal profitability” for each strategy Let’s revisit our landscape contractor example. Let’s say that they had arranged several strategic endorsement partnerships with five different lawn care companies that service 200 lawns per year. Let’s assume that out of those 200 customers, 30 of them decide to add landscaping… either arriving at that decision on their own or as a result of a well-placed recommendation by the lawn care providers. Let’s also assume that these customers spend an average of $2,000 each on their landscaping projects. That adds up to $60,000 in newfound business, and with a 25% profit margin, this landscaper made $15,000 in profit as an endorsee. Now remember, this is over and above their regular workload. Now, what if the landscaper provides lawn care recommendations to 50 of their customers who use those services? If the average lawn care job is $2,000 per season, and the landscaper receives a 10% referral fee that equals $10,000 annually for being an endorser! Add up the totals and this landscaper just pocketed $25,000 from these five strategic endorsement relationships. And that’s just for one year. The average lifetime for a small business is five years, so the lifetime value of these partnerships over the five years is $125,000!


Up to this point, you now have an idea how to quickly set up two or three endorsement partners and the appropriate techniques that fit your preferred style and business. You have also identified the benefits that both the customer’s and your partner’s can expect from your partnership and you have calculated the profitability of each one. Step 4 Select The Technique That Best Fits You And Your Business Now is the time to select the one strategic endorsement opportunity and the one specific implementation technique that you can quickly apply to your business. Focus on the implementation steps as you deploy this strategy. Step 5 Identify Target Businesses Willing To Partner With Yours In Strategic Endorsement Partnerships Begin this process by carefully considering several critical questions. Who has already established a relationship with your targeted prospects? Who already has access to the exact prospect base you want to communicate with? Who else could leverage your customer base? What other businesses would love to communicate with your customers? What other types of businesses compliment your products and services (businesses that your customers would consider valuable). These questions should enable you to create a list of the actual businesses you can begin to approach with this relationship. Consider starting with those businesses you may already be working with or various local businesses you can easily approach. Then expand from there. Another identification process for finding prospective endorsement businesses is to check out the various ads in trade magazines. You should also begin to pay attention to all the direct mail you currently receive. Even a quick scan through your Yellow Pages can uncover a treasure trove of potential partners. Local Networking Groups as well as your local Chamber of Commerce are also excellent places to look. Step 6 Design The Perfect Program For Your Business There are four major considerations that MUST be observed when you select the strategic endorsement strategy you feel is best for your business. 1) Make sure that the partner’s you select offer similar quality and have the same integrity and ethics as you.

Keep in mind that your endorsement is a direct reflection on you, your business and your reputation. If you endorse a quality company that meets your customers needs and treats them well they will be indebted to you and continue to buy from your future endorsements.

2) Maintain total and complete control over your customer list.

Your list is the lifeblood of your business, so be sure you treat it as such. When sending out direct mail, consider using a bonded mailing service to send the mailing. They guarantee your list will be kept confidential.

3) Maintain total and complete control over all endorsement activities as well as the content of the endorsement

message as often as you can.

You should always control the way your business’s description and positioning along with the quality of the marketing message that’s sent out on your behalf.

4) Opt for a “one time” partnership trial period to make sure your partner’s list produces real results.

Naturally there are advantages and disadvantages to forming long-term relationships. Save your long-term commitments for those partners that produce consistent results.


Now it’s time to custom-design your implementation program. There are two distinct entities to consider when designing your program. The first is the prospect or customer and the second is the strategic endorsement partner. First, let’s focus on designing your customer program in its entirety and then focus on the strategic endorsement partner program.

The Customer Program There are 5 elements you need to focus on. Element #1 - Determine the offer Begin by determining the price for your product or service? If you offer compelling benefits you may not need any additional incentives. For example, if you’re a chiropractor and you offer the latest in spinal decompression therapy, that alone may offer enough benefit to get patients to use your treatments. However, you’re typically trying to get the customer to purchase additional products or services that you or your partners don’t normally provide. This is where a compelling offer loaded with benefits and risk avoidance is crucial. The best way to position price is to present it with a descriptive title such as special, discounted, VIP or ground-breaking price that you or your partner have negotiated on the customer’s behalf. You want to be sure you always include in your offer “value added benefits” or a bonus’ to motivate the purchase. When doing this, select items that have a high-perceived value to the client but a low (or no) cost to you. An accountant that has available time could easily offer to complete a free tax return or provide a free basic tax strategy consulting call that has zero hard costs to them yet the perceived value of these services to the customer is several hundred dollars. Your offer must also take into account the risk factor. How will you reduce (or completely eliminate) the risk of the purchase? We mentioned earlier that the least you should offer is a 30 day no-questions-asked, money back guarantee. However, it’s imperative that you continuously test different offers. Many of today’s top marketers offer guarantees much longer than 30 days. Here’s why. A 30 day guarantee sets a fast approaching deadline in the minds of your customers. They feel pressured to make a quick decision as to whether or not they will keep your product or pay for you service. A longer timeframe relieves and often eliminates that pressure, and after several weeks, most customers completely forget about the guarantee and end up keeping and using the product or service for life. Testing is always the key to effective marketing, and the perfect deadline for your offer will vary with each and every business. Offering a guarantee can be completely risk free to you if you scientifically test the offer and measure your product returns. If the additional sales and increased profit (from the guarantee) exceeds the cost of returns then you have a winning guarantee. If you make it a habit to always test your guarantees before expanding your programs you can make aggressive offers safe and profitable. Consider the chiropractor that offers patients a specific health supplement. They can offer a full 30-day money back guarantee if the patient doesn’t feel more energetic and healthier. In fact, the chiropractor could go directly to the manufacturer and insist they extend their warranty. By doing so, the chiropractor has eliminated any cost to them for returned supplements. Most companies today are willing to bend over backwards to keep their strategic partner’s happy and productive, and the cost to them is often miniscule. It’s important to remember here that revenue generated from strategic endorsement relationships is essentially “found money” that you would not have previously earned. The marginal profit you earn is money in your pocket. Element #2 Develop A Compelling Script


You MUST script out exactly what you’re going to say. Most businesses today prefer to “wing it.” And they often fail miserably. Don’t fall into this trap. Writing out exactly what you want to say, word for word, gives you the ability to go back and revise, tweak, adjust and improve the syntax and flow for your sales pitch. Here is a proven and tested eight step format to create compelling and irresistible offers:

1. Open with an attention-grabbing, interrupting headline or opening paragraph focused on a problem, fear, frustration or concern 2. Engage by promising a solution to the problem in the opener (focus on the benefits and the likely outcome they will experience)

3. Give them a reason to purchase 4. Tell them what you will do to help them gain the benefits 5. Be specific about the actions they will take 6. Offer them a compelling bonus or some form of additional incentive (when practical) 7. Reverse their potential risk using powerful guarantees 8. End with a PS (use it to restate the benefits) The basic script is the same whether you’re the endorser or the endorsee. The only difference is who is delivering the offer. Follow these eight steps when delivering any form of message and that message will compel your prospects to take immediate action. Let me give you an actual example of this so you can see for yourself how powerful this format can be when you use it for your own business. And let’s take what may be the single, most difficult thing in the world to market to anyone in this day and age… a health supplement. There must be around a million or so of these on the market. Every two seconds you hear an ad for them on radio or TV. They’re all over the internet and in every form of print media. And yet, by following this Compelling Message Template, watch how we can compel even the biggest health skeptic into trying this supplement. Let’s revisit our previous example using chiropractors. They all want to sell vitamin supplements to their patients as a way to create a secondary source of income for their practice. So in this example, let’s say you’re a chiropractor offering premium vitamins to your database of prospects and patients. Step one says to always begin with an attention-grabbing, interrupting headline. Dear Mary: As your doctor, your health and well being are always my top concerns, and I’m constantly bombarded with drug companies asking me to recommend their vitamin supplements to my valued patients. I have never been the least bit tempted to recommend any type of supplement to any of you… until NOW! This headline grabs attention because it instantly arouses curiosity. What could possibly have impressed this doctor so much that he’s writing me to make a personal recommendation? Step two says to engage them by promising them a solution and to focus on the benefits of these supplements and the outcome they should expect if they use them. Most of you know that I specialize in relieving chronic pain, and the latest scientific research has uncovered that a nutritional supplement called Relief X can almost instantly relieve chronic pain where other treatments have been colossal failures. After recommending them to several select patients of mine with chronic pain, and seeing their almost miraculous improvement overnight, I felt I would be committing a felony if I didn’t at least notify you of my discovery. In my humble opinion, these supplements represent a major scientific breakthrough in chronic pain relief. They contain a special wax coating that survives stomach acid and slowly dissolves in the intestines where it can be immediately absorbed at full strength. Most supplements dissolve in the stomach and less than 15% of the medication enters your bloodstream.


Notice how he promises a solution to chronic pain and states the benefits that prompted him to make his recommendation. Now let’s move to step three and give them the reason they should purchase these supplements. Because of their high potency, these supplements are not available at any store. The manufacturer will only allow these to be offered through specially trained chiropractors. They are asking us to monitor our patient’s results so they can use it next year in their nationwide marketing campaign. Since they’re looking for dramatic results and testimonials, I was able to convince them that the more of my patients that participated in this clinical study, the more results and testimonials they would receive. They agreed and offered me a 35% discount for recommending these to my entire patient roster. I want to pass that savings on to all of you and make sure everyone can easily afford to try these remarkable supplements for yourself. Step four says to tell them the specific action you will take to help them gain the benefits. My past experience indicates that the vast majority of you with chronic pain will experience immediate relief. However, no supplement is 100% effective for everyone. That’s why I also negotiated a 100% unconditional guarantee with the manufacturer. If any of you don’t experience immediate relief from your chronic pain, you can notify me and I’ll personally refund 100% of your money. Step five says to be specific about the actions they will take. Please call my receptionist Mary Monday through Friday between 8am and 5pm and let her know how many you would like to order. She will call in your order direct to the manufacturer so we can insure you receive the 35% discount. You should have your supplements within 3 days and no more chronic pain after that. Step six is to offer them a compelling bonus. Once you rid yourself of your chronic pain for good, let’s make sure it never returns again. I’m going to offer everyone who places an order a complimentary wellness assessment and diet plan with Judy, our on-staff nutritionist. This is normally a $450 service we provide, but for those of you who take advantage of this offer, I’ll provide it to you free of charge. Consider it my gift to you to get you started on finally living a pain free life. Step seven says to reverse any perceived risk. As I mentioned earlier, although I have tremendous faith in the results all of you will experience with these supplements, nothing is 100% effective. For those few of you who don’t feel immediate relief within 24 hours of taking your first supplement, notify Mary and we’ll issue you an immediate refund… and you go ahead and keep the remaining supplements and see if they eventually provide you with the same dramatic results as my trial patients experienced. Please allow me to thank all of you for your past patronage to my practice. I hope my discovery turns out to be the key for most of you to return to a totally pain free life and a revitalized lifestyle. All of you deserve it. To your health, Dr. Mark Smith Step eight is to always end a letter like this with a formal P.S. that highlights the benefits you offer. P.S. Don’t forget these supplements are effective because of the revolutionary new coating that actually survives stomach acid and becomes fully digested in the intestines so you receive 100% of the pain relieving formula that’s safe, effective and just plain works. Notice how this letter reinforces the benefits about your product or service.


Now obviously if you plan to deliver this offer at the point of sale or over the phone, you will need to dramatically shorten this script. Just be sure it continues to hit all the same points. Element # 3 – Determine Your Preferred Delivery Or Communication Method If you decide to make your offer at the point of purchase who will communicate the message to the client… you or your staff? Would you prefer to send a direct mail letter… mail a postcard… or communicate by phone? Marketing typically produces much better results when multiple delivery methods are used. Element # 4 - Determine The Appropriate Timing The timing of your offer can make or break this strategy. When you consider the nutritional supplements situation, the offer can occur anytime. But for the lawn care company, the endorsement from the landscaper will generate better results at the point of sale. A furniture store being endorsed by a home entertainment contractor might be better off conveying their offer 30 days before the home entertainment system is installed. Element #5 – Create A Follow-Up System Once you master the timing of your offer, you need to implement a follow-up system. It’s imperative that you follow up routinely with your prospects. The timing will be different for each and every prospect you deal with. It may take three to five mailings or several offers at the point of purchase before the timing is right for the customer. Perhaps the chiropractic patient that received the doctor’s letter for supplements already had a month’s supply and wasn’t compelled to take action at the present time. Keep in mind that customer needs frequently change. The chiropractic patient that passed on the supplements before may reconsider the offer when they get sick or begin to feel run down. This completes your customized “customer” program. Now you must begin to test it, teach your staff the process, track the results, and set up an incentive program if your staff are the ones responsible for the delivery of the offer. If you own an auto care shop, you MUST train and motivate your mechanics to look for appropriate offers such as changing the customer’s transmission fluid, updating their car’s appearance with auto detailing or correcting their wheel alignment. If you don’t provide your mechanics with an incentive program, this will never happen. This completes your custom designed program for the customers. Now it’s time to design your Strategic Endorsement Partner Program.

Your Strategic Endorsement Partner

Once you select four or five potential partners you’re ready to set up the strategic endorsement relationship with them. Consider the following five factors when you develop the way you approach them. Factor #1 - Determine what you will offer WIIFM – what’s in it for me? That will always be the first thing that pops into your partner’s mind, so it should be the very first thing you address before approaching them with your offer. Will they respond to money or would they be more motivated by the benefits to their customers and prospects ( i.e. guarantees, price discount, valuable bonuses, VIP services or more convenience). These benefits should form the foundation of your offer. Most people automatically assume the major benefit will be the money, but this isn’t always true and may actually be unnecessary. We’ll discuss the money aspect in factor #2 but for now I want you to consider three alternative arrangements that may prove even more valuable. This first one is my personal favorite, and one I use constantly with tremendous success. 1. Barter


The reason most barter arrangements fail is when one partner ends up sending five times more business to the other and winds up feeling “ripped off.” Barter is a passive system that requires a concerted effort on the part of both partners to keep the arrangement fair and equitable. The brutal fact is that type of arrangement seldom if ever works since both partners will seldom produce equal results to the other. However, a barter arrangement can work beautifully when the service you offer to each other is based solely on the volume of business you get. For example, if a doctor refers five patients each month to a chiropractor, then the chiropractor should reciprocate by providing five free services and treatments to the doctor’s family or extended family as long as the endorsement numbers justify this arrangement. However, suppose the chiropractor refers just one patient per month back to the doctor. In this case, the doctor may provide the chiropractor with free medical care for just one family member based on their volume. This maintains an equitable arrangement based on actual results. 2. Convenience Everyone today suffers from a “time crunch.” If you or your partner can make your prospects and customers lives easier by providing products and services that are more convenient for them, that may be all that’s needed to win their business. Look for ways to add convenience to what you do and offer that convenience a way to motivate your partner to endorse you. For example, if you owned a body repair shop, you may have discovered that one of the new car dealers in your town “farms out” their customer’s body repair work to various body repair shops. Their selection is typically based on the shop that has excess capacity at the time of the repair. Suppose your body shop guarantees VIP service to the car dealership (meaning they will always give the dealership top priority and move them to the top of the list) as well as offer to pick up and deliver the car back to them as an additional value added service. This has little to no cost to the body shop (the time needed to return the car) and would result in capturing all of the dealerships business. 3. Charge Higher Fees Almost all businesses compete on price. And yet price ranks seven out of ten on most customer preferences lists. Customers don’t shop price… they shop value. They will pay twice the price for something they believe offers them four times the value. They simply see that as offering them “the best deal.” When you offer more convenience, greater comfort, reduced effort or higher-perceived value, you can easily charge full price instead of offering crippling discounts. Imagine NEVER competing on price again. And when you can charge full price, the fees you pay to your endorsement partner result in no additional cost to you. You merely pay them what everyone else is providing as a discount. You may also be able to leverage your relationship with your strategic partner and have them endorse you to a third party. Consider this example. Let’s say you’re an accountant who provides monthly medical billings for doctors. Your partner has a strong relationship with a large health clinic in another part of the country. Your partner discovers that this clinic is actively looking to replace their current billing company due to continuous problems with quality and complaints from their doctors. In other words, their service expectations have shifted from price to quality. Your strategic endorsement partner can use their strong relationship with this clinic to endorse your billing service and like the previous example, if you can back up your service with strong quality guarantees, you will be able to charge your published rates instead of competing on the lowest bid. Fee Arrangements


Most strategic endorsement partnerships are fee-based when it comes to compensating the partners. So that raises the question as to what fee is appropriate to compensate your partner for their endorsement? The preferred way is to base the fee on the lifetime value of the customer for that product or service. If your relationship with your partner helps you to gain access to qualified customers that you could not economically reach, then you should be willing to pay a considerable fee to gain access to this goldmine of new business. Let’s continue with the chiropractor example that offered health supplements to their patients. First, they must determine the offer price for the supplements themselves. Determine how much profit they will accept per patient. Next, negotiate with the supplier for the best price based on projected revenue. The combination of these two factors sets the price. For example, let’s say the chiropractor wants to earn $15 per month per patient. If the normal monthly retail cost of the supplements was $55, and the chiropractor paid $30 wholesale to acquire them, then they could offer them for $45 and earn their desired $15 profit margin. However, if the chiropractor could get the supplement company to reduce their wholesale cost to $25 based on volume, then they could either lower the price to $40 or pack the offer with $5 in value added bonuses. Note: the $5 is the actual hard cost to the chiropractor. This bonus may have a “perceived value” to the patient of $25. The chiropractor may include a “voucher” for every patient purchasing supplements offering them a complimentary 15 minute heat therapy massage. The chiropractor’s published price for this service is $25 but their actual hard cost is $5. The patient “perceives” the voucher as a $25 value. Now combine this with the published retail price of $55 for the supplements, and the patient believes they’re receiving $80 in total value for a price of $45. The chiropractor still makes their intended $15 in profit. Now let’s discuss the various ways to set up your compensation program. (NOTE: be sure you check your local laws to make sure endorsement fees are allowed for both your profession and business in general). Consider these four types of potential fee arrangements. 1) Percentage of revenue This is the most commonly used compensation plan preferred by most strategic partners. They want to be compensated based on the actual revenue they help to generate. However, this plan also creates the most disgruntlement among partners unless it’s structured properly. The problem occurs when compensation is based on anything besides “gross revenue.” Inexperienced business owners often use “gross profit” as their preferred standard for compensation. Basing the fee on “gross profit” is a nebulous term that often leads to massive conflicts down the road. How often have you heard movie stars complain that the studios that had promised them a percentage of the profit are claiming that a film that has generated a billion dollars in worldwide revenue is still supposedly in the red? Gross profit can be easily manipulated with purported costs and expenses that may or may not be real. Instead, I recommend determining the profit formula as previously described and then converting it to a percentage of “gross revenue.” If your product or service has a marginal profit of 50% and you and your strategic endorsement partner agree that 20% of that profit is fair compensation, then base the fee on 10% of gross revenue. This will greatly reduce and possibly eliminate any conflict down the road. 2) Fixed fee per customer This arrangement is exactly what it says it is. You pay a specific fee based on each new customer that’s acquired. The lawn care provider could pay the landscaper $25 for each new customer the landscaper sends to them. But consider this scenario as well. The landscaper typically charges much more per project than the lawn care provider. This is where knowing your customer’s lifetime value can pay off big time.


If the landscaper knows their customer’s average lifetime value is $2750, then they could easily offer the lawn care provider $500 plus for every new customer the lawn care provider produces through endorsements. This is obviously a huge incentive that should massively motivate them to actively refer the landscaper. 3) Fixed fee per transaction In this arrangement, you or your partner has a repeat business product or service and you want to avoid paying out large up-front fees for potential lifetime customers. Alternatively, this arrangement applies to one time purchases as well. In these cases, you can agree to pay a fixed fee per purchase. For example, if you’re a Chiropractor and the average patient generates $75 per visit and they use you for 20 visits over their patient lifetime, then you have a Lifetime Value of $1,500. If you’re willing to pay 20% of that total to your partner, that equals $300. But you may be reluctant to pay that full $300 cash up front, so you can elect to do this on a fixed fee per visit basis in one of two ways:

• Pay $15 per visit for each of the 20 visits, with no guarantee • Pay $45 per visit for 12 months up to the $300 cash amount.

4) Monthly Retainer This arrangement may be preferable if you’re sending or receiving a steady stream of customers from your strategic endorsement partner. If you’re the endorsee and feel confident in the number of purchases that will result from your strategic endorsement partner endorsing you consistently to their list then you may want to suggest a monthly fee (one that sounds really attractive but substantially less than if you paid a percentage of revenue or per transaction fee). For example, if the supplement company was the one that set up the arrangement with the chiropractor, the chiropractor may feel that receiving a monthly retainer of $500 per month sounds great but may have zero interest in receiving $15 per patient. However, if the supplement company knew from previous chiropractor arrangements that at least 50 patients would participate each month, then they would earn $750 and both parties would be satisfied. In all of these compensation arrangements, it’s valuable to show the strategic endorsement partner the marketing and sales cost they save by the agreed upon arrangement. Factor # 2 The Script – What do you say to your targeted prospects? In order to create a successful endorsement program, you first need to educate your chosen partner’s on the benefits you provide to them and their customers… as well as the quality you offer and the integrity of your business. In addition, you should educate the partner on the size and quality of your customer list in order to reinforce the potential it holds and how they can profit from it. As an example, let’s look at our own company where we specialize in providing publishing and consulting services for small business owners. In this case, we can leverage our 50,000 member database and become the endorser (the one with the strategic relationship) with our members. Let’s say our company is looking to leverage our responsive member database and we’ve identified printing services as a great complimentary service for our members. As the endorser, we could write a letter to the 10-20 printing companies that we feel offers high quality and great, on-time service as follows: Dear Business Owner: Our consulting company has developed over the years a massive and responsive 50,000 member database of small business owners… all of whom need and use the services of a printer. We are continuously asked for referrals regarding top quality printing companies that can produce small quantity print jobs at a fair price.


Therefore, we have decided to endorse a printing company that offers exemplary quality and service. (Self serving benefit and compelling reason why they should read this letter) Since our members depend on our expertise when it comes to creating their marketing collateral, our goal is to provide them with a printing company with validated satisfied customers and the best price available. (Specific qualifications we expect)

We anticipate that approximately 500 of our members will immediately take action on our recommendation. (Telling them what’s in it for them) We’re looking for a price in the range of $.03 per copy and an on-time delivery rating of 99%. In addition, we are looking for a company willing to provide free delivery (bonus), and up to 10 rush jobs per month at no additional cost. (Value added)

It’s extremely important to note that we want to establish a continuous relationship in which we both benefit.

If interested in being considered, you can call John Smith at 1-800-555-1212.

PS. The marketing and sales costs you will save by being the exclusive printing service to be endorsed to our 50,000 database member list will more than offset the price and services you will be providing. Factor #3 Assign a specific individual to handle your direct mailing program The two areas of responsibility to consider are the creation of the letter and the cost of the mailing. 1) Creating the letter Since you know your product or service as well as your customers far better than your partners ever will, you’re much better off creating the letter yourself. With the help of the template and examples in this program, it should only take you a few minutes to create a highly compelling letter that will generate terrific results. I can almost guarantee that if you wait for your partner to draft the letter, write the script or develop the brochure, they will never get it done. If they insist, let them draft the letter but you always want to insist on the editing rights before it’s mailed. In turn, you should offer them the same editing rights so they feel comfortable. 2) Mailing costs There are no hard and fast rules when it comes to the cost for the mailing. This will always be a negotiated item between the partners. However, if you’re the endorser, it’s more than fair to ask your partner to pay half or all of the mailing. In turn, you should offer the same arrangement to your partner. For both of your sakes, limit the upfront risk by performing a small initial test for $100-$200. You should also take the lifetime value into consideration as well. If your lifetime value is high, you should be prepared to pay for the mailing, but since most small business owners have no idea when it comes to lifetime value, this subject should only come up if they address it. Factor #4 Agree on specific terms and conditions with your strategic endorsement partner After you clearly define the benefits that both your strategic endorsement partner and their customers will receive from their relationship with you, it’s time to create an agreement. We strongly urge you to keep your agreement simple in language and short term in length. In fact, you should agree that either partner can easily and immediately cancel the agreement if things aren’t working out. If the partner doesn’t perform as promised (they may misrepresent the quality of their list), you want the option to terminate the relationship immediately.


Most of your arrangements should be verbal, at least initially. Since the vast majority of prospective partners you approach will find a strategic endorsement partnership an unfamiliar concept, a written agreement tends to turn most of them off. This marketing method can be a bit uncomfortable to begin with for most. If you’re the endorser then your agreement can be as simple as saying, “I will recommend you to my clients as long as you provide high quality, your best pricing and excellent service to my customers. After you become comfortable with the partnership you might consider formalizing the agreement. However, I’m not saying you shouldn’t document your verbal agreement. It’s always a good idea to write an informal outline of your agreement to avoid fee disputes and those frequent “memory lapses” that always seem to happen down the road. Factor # 5 – Ensure you’re compensated fairly In any type of partnership arrangement, you should assume from the start that you will not get paid 100% of what you should. Since most businesses have no formal tracking mechanisms in place, precise tracking is often difficult and potentially costly. *I encourage you to consult an attorney for professional advice. Here are 6 methods to controlling compensation for you to consider: 1. Agree on what you both believe is a reasonable response rate If your lawn care company partners with a landscaper that claims they have a qualified and responsive database, and the landscaper refers you to 25 people but tells you that only 2 converted, that should send up a red flag. If you’re getting paid on 5 to 7 then that’s reasonable. A landscaper typically has a personal, one-to-one relationship established with their customer base and should be able to easily produce a 30% to 40% conversion rate. 2. Set up multiple partnerships per product or service If the landscaper recommends two lawn care companies and one pays the landscaper five referral fees while the second pays fifteen, this should also raise the flag. Please note this may not be indicative of dishonesty on the partner’s part. They may simply have an unresponsive or unqualified list. If so, you will want to immediately cancel your agreement and seek out a replacement partner. 3. Randomly follow up with selected customers that you referred and inquire if they purchased Contact several highly qualified customers and inquire if they found your recommendation beneficial. Most business owners know who their best customers are and those most likely to respond to the endorsement. Verifying just a few of these orders will go a long way to establishing trust or exposing deception in the partnership. 4. Track the results yourself You can set up a separate online landing page, an 800 call-in number or a PO Box where the orders are sent to. If the chiropractor wants to control the purchase of the supplements, they can either have the orders come directly to their office at which time they submit the orders to the supplement company or they could use an 800 number that automatically tracks orders and they receives a copy of the itemized orders that were placed. This alleviates any effort for the chiropractor’s office and staff they can easily verify the number of orders placed. 5. Request multiple reports in large quantity or high dollar transactions If the endorsement has the potential to produce major revenue, you may want to require copies of all invoices, orders or transactions so you can look for discrepancies.


6. Insist on your right to an audit on request Any ethical business owner will have no objections to an audit request if a discrepancy presents itself. You should insist that either party has a right to audit each other’s records, exclusive to your transactions only. When implementing a strategic endorsement partnership, test the program yourself and modify when needed Test your offer to your targeted strategic endorsement partners before rolling it out. Test your offer on the four or five you initially identified. Then based on their feedback you can modify your offer before you expand your targeted list of potential partners. Set-up measurement and tracking systems A simple one-page report with the number or transactions or revenue and the calculations of the fees should be adequate. You will naturally want to closely monitor the fees due from your partners. You will also want to keep accurate records of your customers’ purchases on behalf of your partner’s so you can provide them with the fees due from you. As you can see, implementing a strategic endorsement partnership offers tremendous advantages for both the endorser and the endorsee. The key is to use the recommendations we have provided to ensure the partnership is a win-win situation for all involved. Marketing and lead generation is getting more difficult and expensive every day. Leveraging each other’s list or database of qualified customers is an inexpensive, time-saving and highly effective way to improve your sales and revenue.

How To Find, Contact and Persuade Strategic Endorsement...

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