Swimming with the sharks

What do you think is the most inexpensive, underused, and effective method of marketing?

Before we answer that questions, we want to tell you about an interesting relationship between sharks and pilot fish. Some sharks have the reputation of being voracious predators. Most animals keep their distance from the swimming carnivore; however, the small pilot fish purposefully lingers close by. After the shark has devoured one of its victims, the pilot fish swims to the mouth of the shark and begins eating the pieces of flesh wedged between the shark’s teeth like a living toothbrush. It’s a mutually beneficial relationship that allows the pilot fish to eat with very little effort, and the shark gets clean teeth.

The cost of acquiring a new customer can be quite expensive. Mass marketing allows you to reach large groups of prospects, but it can be expensive and for some small businesspeople, prohibitive. Rather than risk their meager resources on a marketing campaign that may or may not prove profitable, these small business owners catch whatever floats their way.

Why spend so much money on trying to attract outside prospects when it is much more effective and inexpensive to develop a relationship with a larger, more aggressive organization that will allow you to hook more customers into your establishment. This effort could eliminate most of the expense and inefficiency associated with typical prospecting. The big question, though, is how can you do it?

For a small business to learn from the pilot fish, it must take an inventory of what it could offer the larger host business to create a mutually satisfying relationship. You must be willing to offer something that encourages your host to give access to their customer base, and even endorse your business. Something that usually works is to offer the host a flat-rate amount or percentage of the sale for each prospect that purchases from your establishment.

Now you will need to search for those businesses that will act as your host. Look at your major target market and ask which organizations would also have them as customers. For instance, if you are a photographer and your most profitable customers are couples getting married, you would ask, “Where would an engaged couple go to make a purchase prior to arranging for my services?” Answers might include a jeweler, wedding consultant, bridal gown store, etc.

Approach the host business with your offer. If it is a percentage of sales earned through the host’s referrals, then you should denominate it so the host will understand what it could do for their bottom line. For example, if you share 10 percent of your sales, and the average sale for wedding pictures is $1,000, the jeweler would make $100 from each referral that bought from you. Let’s say the jeweler refers 100 people per month, and you expect 25 percent of them to get pictures from you. You could tell the jeweler something like, “If my projections are correct, I would be writing a check to you each month for $2,500, or $30,000 of pure profit before taxes each year.”

Make the host realize that you will not take a penny away from them, and it will not cost them anything extra. Reassure the host that this will be a complementary relationship that will not interfere or conflict with their business. Can you imagine what this would do to a photographer’s business to have a jeweler sharing 100 ready-to-buy prospects, and 25 of them making a purchase? In the above scenario, it would mean $25,000 in extra sales each month. In this arrangement you are only paying for the customers who make a purchase.

Here are some other examples for you to consider. A carpet cleaning company could work with a carpet retailer. The carpet retailer could form a relationship with an interior designer who would either endorse the retailer’s products or market their products and services as a “package deal.”

Like the little pilot fish, you could focus your time, energy, and effort plucking the best deals. If you had several arrangements where hosts were endorsing your products, you could basically eliminate your typical prospecting efforts and focus on those activities that make more money. This marketing method allows you to sidestep the competition and get customers to come directly to you. It is so effective, simple, and rewarding; yet so rarely used by the small businessperson. So, while other small businesses are lunch to the big companies, you are swimming with the sharks and enjoying the juiciest transactions.

(Rik is a business instructor at NMC and Janel is the owner of Positively Outrageous Results. They have consulted with over 400 businesses in 40 different industries, and can be contacted at: biz_results@yahoo.com)