Imagine this, if you will. I am a business or profession that has been operating successfully in your market arena, not in competition with you, but selling my wares or services to your same category of customer or client or patient, for ten or fifteen or twenty years.

For instance, you own and run a small chain of six high street optician practices - or one, it doesn’t matter. I am a dentist with three practices in the same large town, or spread within two or three towns within your catchment area of maybe five to twenty miles.

Over fifteen years, I have invested a total of half a million pounds, or a million, or ten million attracting to my practice in numerous ways, let’s say a total of 10,000 patients, serious about the health and appearance of their teeth.

It stands to reason that a fairly large percentage of my patients naturally fit your patient profile as an optician. They are of the same demography. They demonstrate concern for their dental health by regularly visiting my practice to receive preventative check-ups, dental work and in some cases, very expensive cosmetic work.

The chances are, a good number of my dentistry patients will be equally concerned with their eyesight. They care about their vision and realise that, like their teeth, their eyes might require correction with lenses or contacts, or laser surgery, to maintain good or excellent vision for many years into older age.

Wouldn’t you give almost anything to be able to gain access to my database of 10,000 patients, and instead of having to invest a small fortune going to the outside market to attract new patients each month, wouldn’t you value having me recommend your optometry services to my patients?

If you did, you’d get a rush of new, qualified, serious-minded patients coming to your optician practice, as rapidly as you could handle the increased flow.

Or, you own and run a tyre fitting shop. I run a car accessories shop in the same town. I’ve been running my shop for ten years, and by continual advertising in local papers and on local radio, I have built a customer base of 6,000.

Wouldn’t you almost sell your grandmother to be able to access my 6,000 customers, all of whom you know drive cars, and are active in improving, or customising, or repairing cars, and offer them your tyre services whenever they need replacements?

If you did, you’d engineer a sudden new stream of buyers for a fraction of the investment, time and energy you’d normally have to put out by going to the open market to acquire new customers.

One more example. You own a high quality restaurant, or small chain of restaurants. Your clientele is typically made up of business managers, professionals, and quite affluent local home owners.

Wouldn’t you do cartwheels up and down the high street to get the opportunity to access the fifty largest office blocks in your town, plus the twenty finest business suit clothiers, plus the five luxury car dealers, and offer the directors and senior managers from the office blocks, and customers of the clothiers and car dealerships a beautifully postured, impressive, almost irresistible invitation to come and dine at your restaurant for the first time, knowing that when they do, a large enough number will be suitably impressed and delighted with your food and service and delightful decor that they’ll come back time and time again?

If you did, you would write up half a million or a million or three million pounds of lifetime value business all in the space of a few, short weeks, just depending on how many covers you can serve each day.

This is the power - and the massive but mostly overlooked opportunity - of the strategy I want to share with you in today’s session. The strategic alliance, or joint venture, or host-recipient alliance — whatever you want to call it, it’s really all the same, at various simple but ingenious and highly profitable levels of involvement.

To make sense of why alliances are highly profitable, and can accelerate your organisation forward at warp speed when all your competitors are growing only incrementally each year, and spending a fortune doing it when you are able to spend a fraction, you need to grasp just one simple fact, that you already are aware of, but might not yet have linked to the benefit of alliances:

You know that the most difficult, most expensive, most time-consuming and effort-exerting activity you ever perform in business is acquiring a new customer or client or patient.

You know why: you have to attract, then gradually nurture, then reduce or eliminate the barrier of entry, then seduce each prospect into finally biting the bullet and trusting your promise enough to accept your initial offer to buy whatever it is you sell.

You significantly reduce your prospect’s resistance and initial mistrust, by applying all the strategies and tactics I’m sharing with you in this programme, but it’s still the most expensive and arduous process of business you’ll ever be involved in.

Now let’s flip the coin, or pull the sock inside out. When you make any kind of offer to the outside market, as you know, you’ll manage a half a percent, or one percent, or if you’re good, a two percent response.

When you make an offer to your existing, current and past customers or clients, a very different scenario unfolds - a very much higher percent will generally respond - four percent, or seven percent, or 10 percent or sometimes fifteen and twenty percent, for all the reasons you now understand.

Keep in mind, for the same cost of mailing a thousand, or five thousand, or fifty thousand solicitations to your existing customers or clients, you typically receive a four times up to thirty or forty times the response, with the inherent large increases in profits.

The same dynamic occurs when I make a beneficial buying opportunity available to my clients. Therefore, by you simply forming an alliance with me - whoever I might be in your particular business or professional arena, a non-competing organisation - and by having me recommend your product or service to my clients, you gain a similar, considerably higher response from my people, than if you sent the same offer out to the cold market.

That’s the great benefit. For the same per-envelope cost, you engineer considerably higher multiples of response by accessing my client base, with my recommendation.

In the case I’m describing, the host is the company you approach - it hosts your approach to its customers or clients or patients, you are the recipient.

Why would a potential host company be motivated to form an alliance with you? Well, first, your product or service or treatment must be seen by the host - and be - a valuable benefit, or advantage or relief to his or her clients. Yours must be a kindred product or service.

For example, a dentist should look to opticians, osteopaths, chiropractors, chiropodists, MD surgeries. Also health food shops, health and fitness clubs, beauty salons. Any of these categories should look to any of the others as potential hosts, or recipients.

Or if you are a good quality furniture seller, you should approach estate agents, carpet suppliers, carpet cleaners, kitchen installation companies, building companies who do extensions, bathroom suppliers and fitters, window companies - any category of company that first, is kindred in nature, all to do with home improvement and enhancement, second supplies quality product and a high level and reliable service.

If you are a business software provider, you should approach computer companies, office supply companies, office furniture companies, business book publishers and/or sellers, business magazine publishers, laser printer companies — you get the idea.

I don’t care what category of business or profession you are, there are organizations you can form alliances with. All it takes is a little scouting through your Yellow Pages, or your leading industry or profession publication, or talking with your network of contacts. Or better still, approaching organizations you already have a working and trusting business relationship with.

Some of the best alliances I have are with client companies or suppliers that we know, respect and trust, and vice versa. These are the easiest and quickest alliances you can set up because trust already exists, and so you haven’t got to go through the period of nurturing trust, or finding out the hard way that a potential host’s or recipient’s promise is not lived up to.

I’m going through this scenario at the moment. I won’t mention the company’s name but it’s a database provider that came to my attention about a year ago through a publishing buy-out we did.

This company has developed a really good database programme that has enormous potential in virtually any business category. It’s far more powerful and analytical than popular small databases like ACT or Goldmine or Access, which are good up to certain contact volume ceilings, and then start to fall over. We used ACT for a few years, but as soon as we reached around 5,000 records it became unstable, and we started losing data. We ended up having to create fourteen or fifteen different ACT databases, all with a ceiling of 5,000 contacts. It was a mess.

So I formed an alliance with this company nine months ago, that would first enable me to offer my client list this wonderful database and make their entire contact management, sales process, and marketing tracking and analysing functions easy as pie - and very quick, this software mail merges a million contacts in 3 minutes, and tracks and analyses marketing response and lifetime value - it really is powerful — and second, provide the company with a new, quite large revenue stream.

But they just don’t respond. They fail to send sample disks foe us to demo, they won’t help produce an instruction manual, there isn’t one at the moment, they won’t put time or investment into completing some development we suggested and that they agreed to, and we’ve realised we’re flogging a dead horse.

You discover only by being involved with people over a period of time, how serious and motivated they really are. Unfortunately, most people don’t see their greatest opportunities even when it’s an inch from their nose. Most people don’t have the mindset or ever develop the lateral thinking process I’m teaching you to adopt.

Does that put me off forming other alliances? Or should you be put off? No way, alliances are responsible for huge surges in growth for my organisation, and they’ll achieve the same for you. Just realise that not all of them will bear the succulent fruit they could.

Let’s move on. What is the motivation for a host or recipient company - because remember, you can form alliances both ways, you approaching a host and accessing his customers or clients, or you approaching a recipient company to access your customers or clients - but what’s the motivation or compensation that makes it beneficial and worthwhile to both companies to form the alliance?

There are a number of ways you can structure the deal. One, at the highest level - the host/recipient level, where the host company recommends and endorses your product or service, or vice versa, you recommend and endorse a recipient company’s product or service to your list - I like to give a generous profit share.

Typically, I’ll share 25 percent of the gross profit generated from each sale, to the host company, and I retain 75 percent. I have formed this type of profit-share with dozens of companies over the years, and it works very well. 25 percent of gross is a tempting reward to the host company, for doing nothing other than recommending my services or products to their customers, so it works.

I’ll give you an example. One of my clients, TAS Software, has as their customers, typically serious-minded business owners and professionals, all of whom have invested in powerful TAS accounting software.

That demography of business is exactly what I target. So I approached the Chairman at the time, Theo van Dort, and we formed a host/recipient alliance. Theo wrote a blinding letter of endorsement and recommended that his customers buy my book, How to Out-Sell, Out-Advertise…

The result? In the space of three or four weeks, that recommendation produced over eight hundred new book buyers. Had we had the time, we would have re-mailed TAS’s customers three or four further opportunities to buy the book, and that would have produced two or three times that number. But it was at the time TAS was selling out to SAGE, and we couldn’t re-mail.

Even so, a good percentage of those eight hundred-plus, highly targeted TAS customers have gone ion to buy my newsletter, various audio programmes and have attended various private business-building programmes I’ve made available. And I religiously share 25 percent of the gross profit I generate from TAS customers, with TAS. Each month, a healthy cheque is sent to the TAS offices, which is pure profit for them.

And I profit enormously by having a sudden surge of new customers buying my products and services and private counsel.     

A question I’m asked frequently is, is it ethical for a company to recommend a product or service when they are sharing in the profit from every sale?

My answer is that it is ultimately unethical NOT to make a broader range of high quality products or services available to your customers or clients, knowing they would be of benefit, and that your recommendation is all they need to feel secure in purchasing that item or service.

You must elevate your thinking to a higher level. Understand what you are as a company, to your clients, or can and should be. I put it to you, that if you are just a seller of whatever it is you sell, then in most cases you are doing your customers or clients a grave disservice.

Your goal always is to form long-term, meaningful, trusting business relationships with every customer or client.

If that’s the case, then you soon come to realise that many of your clients have other requirements or wishes or burning needs in their lives.

One way of fulfilling those additional needs is to form another company that would supply kindred products or services to your existing customers. You could do that, couldn’t you? There’s nothing unethical in doing so. And you would honourably make additional profits on every sale to the customers of your existing company.

But I suggest it’s not the most advantageous solution. Why not form very selective, profit-share alliances with well postured, dependable, conscientious other specialist companies, who already have the expertise you would have to learn if you formed such a company yourself, and make that valuable additional range of product or service available to your customers, who would otherwise be left to their own devices to go out into the marketplace, do research, try to select the good from the bad promises, and very often make a buying mistake?

If you allow your customer or client to fend for him or herself in a particular product or service niche you already have some expertise and contacts in, that, in my mind, is shameful. It’s uncaring. It’s saying, “I don’t care for your best interests outside of my particular niche product or service arena. I’ll let you loose to fend for yourself, and often suffer the consequences of a bad buying decision.”

If the alliance with the database company came to fruition, and I was happy that it was a piece of software that would help you enormously, simplify and maximise your contact and marketing results, it would be shameful for me not to do everything possible to form an alliance and introduce and recommend that software to you, wouldn’t it?

Wouldn’t you value that introduction and buying opportunity from me? I think you would. And would you mind me receiving a share of the profit if you bought, for the time and effort I put in to bring it to market for you?

I don’t think you would. I think you would thank me for caring enough about you, to extend myself in ways that brought you other valuable and beneficial products and services you’re going to go out and invest in anyway, but that now you can do so knowing that I have taken the time and trouble to do the research for you, and make available to you a product or service that I feel more than happy to recommend.

As long as my intention is to only ever form alliances with companies that I know have a tangibly and demonstrably beneficial product or service, and that my first motive is always you, my client, then it’s axiomatic that I benefit too, both through your heightened endearment towards me for helping you at a broader, deeper level, and through the extra profits I am able to garner because of your heightened benefit.

To me - and hopefully you see it - alliances not only make available tremendous extra benefit to your existing customers or clients for the reasons I’ve explained, and to the companies you form alliances with through the extra client base they are able to access, and to you as significant additional profit streams, but they are essential in today’s highly competitive markets.

You can’t afford the time, and the investment, and the learning curve, to either form two or five or ten new companies, or buy two or five or ten companies to be able to offer the many additional products or services or skills your clients will benefit from.

Forming alliances with the same category of companies is fast, gives you almost instant access to as diverse a variety of additional product or service or expertise as you want or you require, is less costly, less risk, and is more instantly profitable and beneficial to all three parties concerned - your alliance company, your customer or client, and you.

Let me walk you through the three main different types of alliance you can form - and remember, no matter how small or large your business is, or what category you are, alliances apply to you.

The first is a simple, straightforward alliance with kindred or neighbouring businesses, that almost no business owner thinks to tap into.

If you’re any type of retailer, on your doorstep, literally, are numerous opportunities to access other retailer’s customers. A simple, nicely printed certificate or invitation placed in other non-competitive but kindred-type retailers, inviting their customers to take up an offer in your shop, can bring you a steady stream of virtually free new customers.

For instance, a shoe shop can make arrangements to place a special price, or special offer certificate in fashion boutiques, in hair and beauty centres, in pedicure and manicure centres, in gyms. You make an arrangement that the staff of these other retailers proactively give your certificate to every one of their customers or clients.

In return, you can arrange compensation and motivation by letting the owners of each alliance shop or organisation buy as many shoes as they want, or a pair a month, or whatever, at your trade cost. That price could be shared with the staff of each shop too. Just be flexible and generous enough to instil the motivation to be proactive for you in giving out your certificates.

I’ve done this with dozens of retailers, probably hundreds if I added them all up. I created simple free coffee and cake certificates for a coffee shop, that I had the owners distribute to a kitchen utensil retailer, two clothes shops, a mini-mart, a toy shops, a book shop. All busy traffic retailers that spawned a steady stream of shoppers all glad for a free coffee and cake after they shopped.

I had the coffee shop capture each person’s name and address for a prize draw, and start mailing offers and price advantages, and new cake and quiche offerings, and lunch boxes. And it was very, very profitable for this little coffee shop, at hardly more than a couple of hundred pounds cost.

The second type is when you become an marketable asset to alliance partners. I helped a client in the mother and baby market - they manufacture birthing and infant products - a really conscientious and caring company. I helped them form an alliance with Pregnancy and Birth magazine, by providing a cover-mount offer on one of their products. That alliance produced over nine thousand responses in about six weeks. The magazine didn’t want a penny because the covermount free product offer is a tangible value to them, in helping sell more issues that month.

I advised a client in the dry cleaning business to approach other, well-postured retailers, office blocks, restaurants, with a nice certificate gifting a free dry clean on a suit, and offer their certificates as a marketable bonus to these organisations. You can become a leveragable and marketable asset to your alliance partner.

I had the dry cleaner go to upper end fashion boutiques with this proposal. “I’ll gift you five hundred or a thousand of my free dry clean certificates, each one worth £10 in value, that you can use and market as a bonus with every expensive dress or suit you sell. It gifts every one of your customers their first dry clean, free.” That was the value and motivation for each alliance partner.

This simple, very inexpensive strategy led to hundreds of new customers being introduced to my client’s dry cleaning business, and about 60 percent became regular, ongoing clients.

The third type are pure profit-share alliances, either with your product being introduced to other company’s customers or clients, or vice versa, other company’s products or services being introduced by you, to yours.

Remember, the key at this level, is to posture the mailing to clients as being from the host company, not from you. This is critical. Only when customers of the host receive a letter from the host, will response jump from a half a percent, to three or seven or ten percent, or higher.

The envelope would contain a letter of endorsement and recommendation of you, on the host company’s letterhead, then your offer underneath it, with a response device — an order form, or registration form, or RSVP certificate, or free trial reply form, or whatever fits your offer best.

Okay, I’ve run out of time for this session, I think I’ve given you enough to form a number of… anything from worthwhile to very lucrative alliance partnerships.

Your session assignment today is to go out and do exactly that. First, list ten or twenty types of non-competitive but kindred type organizations you can approach. Second, approach them with your idea, and explain it to them fully because they won’t understand, they’re not thinking strategically, like you are now.

Third, follow it through, persist, don’t give up just because you get a few ‘no’s. If you approach twenty or fifty or a hundred potential alliance partners, I promise you’ll secure ten or twenty or thirty percent, and you’ll enjoy and greatly benefit from the increased streams of sales and profits your partnerships spawn.

Remember, the key is to be flexible in your negotiating. There are no rules. You can arrange what you like, as long as there is tangible benefit to all concerned.

I wish you every success with alliances. I am excited for you because I know the very great rewards that are waiting in the wings for you as soon as you get even a handful of partnerships up and running.