Monthly Archives: October 2019

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Collaboration over Shared Costs

Another area for collaboration is shared costs.  This requires a high level of trust and so maybe Rung 4 on the Awareness Ladder.  Shared costs imply collaboration over clients such as I described in my post about advice and subcontracting.

Advice

Take professional advice if you contemplate close collaboration with another business over a significant period of time. 

It’s important to put whatever you agree into writing and all parties should take independent legal advice.  As far as possible, you want your arrangement to be lawful, so in the event of disagreement, it’s possible to resolve it through legal opinion.  If it’s not possible for every aspect of your collaboration, it’s important you enter the agreement wth a clear understanding of the legal implications.

Look at it this way.  Say one party walks away after a few years for perfectly understandable issues.  All parties understand why and are sympathetic with their reasons.  No-one can predict what life will throw at us.

Consider too, what happens should one party die.  What would be owed to their estate?  If they provided from the arrangement for their family, it seems hardly fair if their family loses out, even if they never contribute directly to the business. 

Unravelling legal implications of one party defaulting on an agreement, even where there is sympathy and understanding, is best done in advance.  There could be major implications for all parties in the event of death.

The implications could be more serious for an acrimonious split or fraud. 

It’s your responsibility to take judicious steps and what follows assumes you do.

Support through Shared Costs

Let’s focus on the advantages.  Shared premises and/or staff open up possibilities of support between the businesses involved.  Assuming there’s common ground, day to day contact means everyone works more efficiently, generates new ideas through conversations and presents a united front when things go wrong.

Furthermore, shared facilities increase capacity.  With shared premises, there may be space for one-to-one meetings with clients or workshop spaces.  It may be possible to build a library or house other shared resources. 

Shared staff means all parties increase capacity.  On their own, they might not be able to support basic administration.  Together they can afford support that frees them to do more.

Another possibility may be shared branding.  Probably not for the parties, who remain independent but perhaps for the premises. 

Possibilities

Shared premises are a possibility.  Even if you all do the same type of thing, if everyone works from the same place, then prospects know where to look.  This is the principle where professional firms such as solicitors work from the same place, even though they are self-employed.

Following from that, shared equipment may be possible.  It depends what you do but most offices need a photocopier and a network server. 

Staff is another possibility.  Someone who acts as a PA to all the staff may be possible.  They would cut down the time spent doing admin and free up the businesses to focus on their work.

It’s possible over time, you move closer together and become a single organisation.  This is not always the best outcome, you need to see what happens.  There are several ways to do it.  Whatever happens you must be clear about areas of accountability.  Who is responsible for what?

An interesting dimension is where one person takes an entrepreneurial approach.  If others favour a vocational approach, then the entrepreneur might grow the business, providing the space in which the others operate.  It’s likely the entrepreneur takes an active interest in the business activity but enjoys the management of premises, staff and growing the business.

Every step we take in business involves risk but it’s worth considering possibilities for growing collaboration.

The final possibility I’ll consider in this sequence is joint ventures.  They need not imply collaboration over premises and staff but in some ways make the biggest demands on trust.

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Advice and Subcontracting

This sequence explores collaboration between similar businesses.  I use the Awareness Ladder throughout these posts.  The higher up the ladder you go, the more trust you need for collaboration.  This post is about advice and subcontracting, they are quite different but similar in one respect.  With both, businesses help out another with their clients.

Advice

Advice is a private arrangement between two businesses.  There’s no need for the client to be informed.  If the client’s aware, it’s your marketing decision.  Take care because you could give the impression the business receiving advice is not up to their job and the client might be better off with the business offering advice!

No-one is good at everything and so it is wise to seek advice.  It’s good sense for a prospect to choose you because you’re the best at 80% of what they need.  The reminder may be deliverable but benefit from a more expert eye. 

Further, there may be advantages when you discuss a client’s problems with a colleague.  For a complex package, an independent eye might be invaluable.  However, there may be issues of confidentiality and so take care to square this between all three parties.

Such an arrangement could be mutual, where you meet as equals and share information about your clients and support each other. Such an arrangement is between peers.  For this reason, payment should not be an issue.  You meet for as long as both find it beneficial.

Mentoring and Coaching

Where you pay for support, this implies mentoring or coaching. 

People may disagree about terminology. If there’s a difference between mentoring and coaching, it is mentoring implies a more experienced practitioner helps someone grow into their role.  With coaching, the business-owner makes their own decisions, helped to think them through by an experienced coach, not necessarily experienced in the subject area.

Coaching is often received by more experienced practitioners.  They find coaching helps, even though they are experienced.  Whether clients understand this depends on how it’s presented.  Essentially it is a private arrangement.  Mention it to clients where their issues are sensitive and they might not want them discussed in their absence.

Subcontracting

Subcontracting implies the client plays an active role.  The client pays one person and that person pays a third party to deliver part of the contract.  This is not the same as a joint venture, where the business-owners have a mutual stake in the contract.

Cox and Box

Here the subcontractor meets privately with the client for one or more sessions.  There is no need for the contractor to be present because they know the ground to be covered in their absence. 

Say the contract is for help with a marketing strategy.  The client needs help with personal style.  If the contractor knows little about this, they have little to contribute at a meeting and what they do know might undermine the subcontractor.  The contractor receives feedback from both client and subcontractor, if they need it.

Everyone Together

Here the subcontractor needs input from the contractor as a well as the client.  For example, a marketing contract might include time with a website designer.  The contractor may have valuable insights, to help the client prepare and present their brief. Supporting a client as they present their brief to a subcontractor is a valuable skill often overlooked by matketing coaches.

Getting all three parties together is productive.  The client benefits from listening to conversation incuding two professionals.  There is need for trust between the contractor and subcontractor and clarity about the purpose of meetings and roles of each participant.

Trust is essential for both advice and subcontracting.  Next time I’ll cover ways in which independent businesses collaborate further, short of becoming a single business.

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Support Through Endorsements

Last time, I wrote about use of referrals with collaborating businesses.  Endorsements may seem similar but they are not.  They apply between levels 3 and 4 on the Awareness Ladder, where the business owner demonstrates credibility.

Why Use Endorsements?

Referrals are private and endorsements public.  A referral is between two businesses and a prospect.  It is tailored to the needs of the prospect.  As such it sits comfortably at rung 3 of the Awareness Ladder, where the prospect chooses your business.

Endorsements help where the prospect moves to rung 4.  They like what they see but ask how credible is this operation?  An endorsement from a similar business may help establish your business credentials.

Endorsements may help lower down the Awareness Ladder.  For example, an endorsement on your home page might encourage visitors to explore further.  However, they are most powerful where a prospect decides they like the look of your business and seeks reassurance they’ve made the right choice.

Do you trumpet endorsements on your home page, so every visitor sees them or hide them away until the prospect seeks reassurance they have made the right choice?

Pros and Cons

Endorsements transfer credibility from the endorsing business to the endorsed.  This implies the endorsing business is better positioned in terms of reputation.  Is it possible for two businesses of approximately equal reputation to endorse each other?  It’s possible but they need to agree how each uses the endorsement. 

Consider the degree of trust involved.  Do you trust the business you endorse as much as your own?  You do not want to endorse something that generates a poor reputation. 

The endorsing business might endorse businesses complementary to their own offers.  They may readily concede the endorsed business is better at some product or service. 

Endorsements are essentially irreversible.  You could ask the endorsed business to remove mentions of your endorsement from their literature.  However, old leaflets and blog posts may still carry the endorsement.  This is why trust is important.  Endorsements are hard to remove once established and not because the endorsed organisation is being awkward.

There are benefits for both endorsing and endorsed organisations.  The fact one organisation is in a position to endorse others speaks volumes for its reputation.  Indeed, the endorsed organisation is unlikely to display an endorsement from an organisation it believes to be inferior. 

This is where endorsements can backfire.  What happens if the prospect decides the endorsing organisation is more credible? 

Practicalities

Working closely with another business could be seen as endorsement. This may not be a problem where collaboration is private but where it is visible, it can be interpreted as endorsement. Bear that in mind as you consider formal approaches.

You could argue testimonials are a species of endorsement.  Testimonials are from customers, whilst endorsements are from other businesses in the same or a relevant field.  If you provide a service for an established organisation and they offer a testimonial, ask whether you can use it as an endorsement.  Discuss how it might be displayed appropriately.

Normally, where one business endorses another, it allows them to use its logo or branding for certain purposes.  The endorsed organisation should not be permitted to use it in any way they see fit.  Endorsements are usually labelled as such and occupy a certain space on the endorsed business’s website or literature.  You certainly don’t want to look as if you are a part of the endorsing organisation.  Always check that the endorsing organisation is happy with the use you make of its logo.

You can add a link to the endorsing organisation into the logo.  This may draw some prospects to the endorsing organisation.  But if the offer from the endorsed organisation is sufficiently different, this should not be a problem.  Try it and see whether it makes a difference.   If it doesn’t, probably best to leave it be.

There are other things organisations do together and one of those is to help out with one another’s customers.  The topic for next time.

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Build Collaboration Through Referrals

At rung 3 on the awareness ladder, your prospect becomes aware of your particular offer.  They are close to sitting down and discussing your offer in depth.  How do you move from rung 2 to rung 3? Oddly referrals are a collaborative tool you can use.

Mostly we depend on our own devices.  We have a sales funnel, nurture people in it and encourage more people to join in.  We do this through business networking, following up contacts and online techniques, mainly social media.

One effective route is referrals.  By referrals we mostly mean referrals from customers or prospects in our sales funnel.  But another powerful source is close competitors.  Why on earth would they refer prospects to us and when should we refer ours to them?

Referrals Build Trust

Early sales conversations are an ideal opportunity to turn your prospect’s attention to someone else.  This is not deflecting potential troublemakers to someone else (they should be dropped).  It is seeking what’s best for the prospect.

Where close competitors collaborate, they learn about each other’s strengths and weaknesses, where they’ve an affinity for particular client needs.  A prospect who approaches you has made an initial judgement that you can help them. 

If you understand their needs you can point them in the right direction.  After all, you know your business better than they do.

Such a referral, well made, pleases both the prospect and your collaborator.  It builds trust with both and encourages either to make referrals to you.

Referrals Deliver Best Service

It’s not solely about trust.  It’s ensuring prospects receive the best possible service.  No-one is better positioned to do this than a group of close collaborators with detailed knowledge of each other’s work.  Matching the prospect to the best provider raises the reputation of not only two businesses but also the trade as a whole.

This is important because the prospect is unlikely to ask for a referral.  They say yes or no to you (and may or may not mean it) but they won’t ask for a referral for fear of causing offence.

For example, some of my prospects are really seeking a copywriter.  I know several excellent local copywriters.  Once I explain my coaching offer, I ask them whether this is what they seek or suggest they might prefer a copywriter.  This is an excellent way to discern whether they are interested in my offer.  Instead they can accept my offer of a referral.  If they say they are interested in my offer, they are more likely to move to a sale. 

Shared Customers

Sometimes collaboration with someone else might be a good solution.  This would not a joint venture, simply a one-off collaboration over one customer.

This is not something to suggest lightly because it may mean you and your collaborator must design something completely new for one customer.  Perhaps if it works out, you have the basis for a more permanent relationship but this may be exceptional. 

There are various ways to arrange this.  Sub-contract to a collaborator, ask them to act as a mentor to you for aspects of the contract where they have expertise or seek full shared responsibility.

With a new initiative, it may be best to discuss arrangements with the collaborator before you make an offer and the prospect may want to meet the collaborator before they make a final decision.  These delays may mean the prospect moves on while they are waiting, which is likely to be frustrating to all concerned.  For this reason, is it worth agreeing basic plans before suggesting such an arrangement to a prospect.

Such arrangements amount to endorsement of your competitors.  Endorsements are in themselves another area of collaboration and we’ll look at that next week.

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Positioning Your Offer

So far my focus has been on collaboration over raising awareness of the problem you and your immediate competitors address.  This post covers the next step on the Awareness Ladder, raising awareness that solutions to the problem exist. Positioning is crucial for collaboration to work out.

People live with a problem for years, if they believe there’s no solution to it.  There’s no point raising awareness of your particular offer if your market don’t believe the problem can be solved.  There’s a clear advantage working together with close competitors to demonstrate the problem can be solved.

The big issue at this stage is whoever makes this breakthrough is at a big advantage, by placing their offer before an audience they’ve convinced of the possibility of finding a solution.

However, one powerful argument for collaboration is the number of possible solutions on the market.  If there is only you, it is much harder to make a persuasive argument than if there are half a dozen or so relevant offers on the market.

Positioning

This is where positioning helps.  If you position your businesses, you segment the market.  Where a prospect has sufficient information, they choose which offer is best for them.

Where you all tackle the same problem, work out what makes your offer different from all the others.  Differences include:

1. Specifics about your approach to the problem.  Show you have a plan that solves the problem.  Make the plan as distinct from your competitors as possible.
2. Decisions you make about the market you serve.  Take care with this because you may inadvertently restrict your market.  Also be aware there may be legal constraints, for example about race.  Common decisions might be to primarily serve a specific geographical location or to focus mainly on the needs of one sex.  This decision is about where you choose to focus your marketing, anyone who does not fit your chosen market may be a secondary market.
3. Your worldview may influence some prospects.  If they know something about your political or religious affiliation, they may choose you over a competitor with similar positioning to yours.  This is the most tenuous of the three approaches to positioning.  It is something that might come over in conversation and not so much in your formal marketing campaign.

Make Distinctions Explicit

Once you decide on positioning, work together to clarify your differences.  Here are a couple of approaches to consider.

For each person list the reasons why someone should choose you.  You might start with “Consider this if you are …” and then a second list “Don’t consider this if you are …”.  If everyone does this, compare the results and tweak to make sure everyone is distinct from all the others, this helps prospects decide who to approach.

However, this may be a lot for prospects to take in, especially if there are a large number of collaborators.  One solution is to build a key.  A key has a tree-like structure.  You ask a question with two possible answers that take the prospect down the tree.  Each question narrows down the number of possible options until only one business is left.

You can do this flat on the page.  If you answer Yes, goto question A or if you answer No, goto question B.  A more compelling approach is to use a quiz.  Thrive themes have a quiz plug-in for example (affiliate link).  Here jumping between questions is done for you.

Joint Brochures

These methods may help a visitor make a decision but some prefer to read details of various offers and make their own decision.  Try a joint brochure that brings everyone’s business into one place and so enables the prospect to decide who to choose.

A brochure could be a website or in print.  If every collaborator has their own website page, you can direct visitors to the home page or to a specific page.  Print brochures may be a powerful statement if they are well-produced.  They could be expensive but if presented to those who are genuinely interested may be cost-effective.  And of course, costs can be shared.

But even with all this help, it’s possible the prospect will make the wrong choice.  As you discuss their needs, you may find the prospect may be better off with one of your collaborators.  What then?