Jay Abraham - Partner or Perish

PARTNER OR PERISH!
Winning in todays competitive environment

The Tom Sawyer School of Business
Copyright Abraham Publishing 2001
Abraham Publishing Group, Inc. | 27520 Hawthorne Blvd., Suite 263 | Rolling Hills Estates, CA 90274 | (310) 265-1840 Fax: (310) 541-3192 | apgi@abraham.com
OVERVIEW
Strategic Alliances Your Strategic Objectives Strategic Alliance Inventory and Opportunity Audit Converting From Theory To Application

Surviving Todays Competitive Market
Brutal competitions Disloyal market Comoditization of products and services Multiple options and alternative to fill a given need Fear, Apprehension, Uncertainty Few trusted advisors
What is a Strategic Alliance

Strategic alliances are nothing more than old fashion partnering with a strategic twist. Means to dramatically expand and enhance your ability generate markets / business / clientscustomers / image / posture / profitability all with minimal spenditure of time effort / expense / manpower / risk. Opportunities are limitless. Only limited to your inventiveness your ability to look inside and out.
Mergers Vs Strategic Alliances

Mergers and Acquisitions arent the only way to go. Strategic alliances are nothing more than old fashion partnering with a strategic twist. Mergers have slightly increased over 5 years while Strategic Alliances have doubled. 1996 1999 companies with $2 billion in revenue or more formed an average of 138 alliances Forbes 3/21/2001.
Strategic Alliances Growth

The number of alliances is growing by 20% a year with 10,000 new alliances being reported in the last 12 months alone More than 20% of the revenue generated from the top 2000 U.S. and European companies now come from alliances Enterprise.com survey 49% Businesses Reports More Worth 21% Higher Revenues 38% Increased Productivity 90% of corporate executives surveyed felt a Strategic Alliance or Joint Venture with another company was absolutely essential to maintain a competitive edge
Why the growth?

Strategic Alliances can be a partnership in which you combine efforts in anything from getting a better price for goods, by buying in bulk together, to seeking business together with each company providing part of the package. Alliance represent an essential strategy for achieving topline growth, higher profitability and enhanced business franchise. Numerous benefits for everyone involved.
9 Major Benefits of Strategic Alliances

1. Achieve advantages of scale, scope or speed 2. Increase market penetration 3. Enhance competitiveness in local, national, or international markets 4. Enhance product development 5. Develop new business opportunities through new products and services 6. Expand market development 7. Diversity 8. Create new businesses 9. Reduce costs
43 Additional Success Factors

1. 2. 3. 4. 5. 6. 7. 8. 9. Easily established Augment selling effort Increase sales and profitability Lower barrier of entry Enhance your image, stature, posture Expand customer client base Boost marked presence Provide added value to customers Contribute substantially to perceived customer benefits 10. Enter emerging markets 11. Expand your horizons 12. Speed access to a wide varieties of new markets
13. Expand beyond geographic boundaries 14. Gain foothold in international marketplace 15. Control other peoples markets 16. Gain a competitive advantage 17. Rapidly overpower the competition 18. Joint marketing 19. Joint selling or distribution 20. Design collaboration 21. Quicker to create/form 22. More flexible to operate 23. Less risky 24. Requires less cash 25. Technology license
9

43 Additional Success Factors

26. Research and development 27. Enhance R&D capabilities 28. Access knowledge and expertise beyond company borders 29. Strengthen reputation in industry as result of association 30. Extend product offerings 31. Widen your scope of innovation 32. Establish unique position in market 33. Secure position as front runner in marketplace 34. Provide marketing / selling 35. Easily establish purchasing / supply relationships 36. Set up instant distribution networks 36. Capitalize on hidden assets 37. Earn higher ROIs and ROEs on alliances than from your core/main business 38. Difficult for your competitors to imitate or emulate 39. Remain focused on your core opportunity 40. Outsourcing non core competencies 41. Lets you maximize / stretch your management and technical / operational resources 42. Reduce overhead through shared costs and outsourcing 43. Manufacture / fulfill cost effectively
10

Corporate Successful Alliances

Allstate / Sears Amex / Mailer inserts University Clothes / Macys Boutique Equity new business Old Bernard / Buruch / Rothschild / Rockefeller Story Liquid Audio 20 Alliances

11
Types of Alliances
Joint Ventures Co-Branding Host - Beneficiary Equity Partnerships Endorsements Flipped Business Opportunities Acquired Assets Acquired Distribution Networks Acquired Leads License or Acquired Licensee Core Competency Consulting Reclamation Sales Force New Products/Markets eBusiness
12

Joint Ventures / Co-branding

Joint venturing allows the best of all possibilities. You can easily repackage or create new businesses together with each company providing part of the package.
Mini Marts with McDonalds, Pizza Huts, Subways, etc. Banks in groceries
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Co-branding
Co-branding allows two companies come together to use both brands to put behind products.
Coke and Proctor & Gamble create spin off to market non-carbonated drinks and Pringles products. P&G gets access to Cokes 16,000 markets. They both share in the profits.
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Host - Beneficiary
Host Jeff Bezos (Taco Bell) Scenarios Key elements Beneficiary Leverage assets are not yours Accounting practice broker IRS program Nevada Company Corporation Gas utility pipeline, TV with Helicopter service Custom computer maker creates joint venture with custom software Speakers selling products / services at tradeshows
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Equity Partnerships
Equity in deal Equity in client Equity in brand Equity in distribution channel Equity in buyers and prospects Equity in marketing material Equity in process and intellectual property
16
Endorsements
Seminar company getting attendee endorsements Association uses local paper for distribution of charity fund and get multiple write-ups and endorsements My seminar business - Tony Robbins, Success, newsletters, trainers William Simmons Home A.R.P - Colonial Penn John Ritter - Where there is a will there is an A Tom Bosley - Agora Fran Tarkenton - Tony Robbins Magazine subscriptions / Schools
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Reinventing Business Opportunities

Brand / actual products / services / proprietary products / lists / research / sales force / too much capacity / facilities/ processes Mastermind/Brain Trust Profiteering Financing 1. Promotions 2. Sales force 3. Ads 4. Markets 5. Product Lines Distressed Properties Jobs Lists Space Production Talent Distribution Delivery Capacity Facilities Technology (Doug McMillian) Procedures Intellectual Capital
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Acquiring
Acquire Distribution Networks Sales Force Retail Stores Kiosks Signage Leases Licenses Display Window Inserts Polywrap Bind in Blow in Assets Lease Purchase Option Acquire Leads Unconverted Prospects Inactive Clients

19
License or Acquired Licensee

Acquire or Render Expertise
1) Marketing 2) Sales 3) Management 4) Cash Flow 5) Organization 6) Performance Enhancement 7) Information Technology 8) Advisory Board
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License or Acquired Licensee

Two Way
1) Brand Name 2) Technology /Methodology 3) Promotion / Marketing Expert Systems 4) Products / Services - Private Label 5) Processes 6) Image / Design / Facsimile 7) Territory / Market / Industry

21
Core Competency Consulting

Attracting or rendering world class expertise on a performance compensation basis.
Core Critical Dual Many different ways to structure

22
Reclamation
Recapture sunk costs, time, effort, expert system, learning curve, i.e., ads, processes, technology, methodology, systems, market intelligence auto ads Dunn & Bradstreet credit reporting business created a database asset

23
New Products/Markets
One of the BEST ways to rapid growth is to open / develop / create new products or markets
Take over, re-purpose, package together other companys product and / or services Acquire Sales Distribution Re-purpose your produces to new markets Identify players in new markets you can joint venture / partner with
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Sales Force

25
eBusiness
Who has the internet / e-mail expertise, affiliate software, infrastructure, e-mail lists, IT staff, equipment, data software, etc., you need or want access to?
26
What Are Your Strategic Objectives?
Start with the big picture. What are the key components necessary to drive it? Where are they going to come from, why is it necessary, and what are your alternatives and options? Vastly expand markets, products/services, distribution, sales representation, costeffective impact. Gain valuable or strategic assets, access, resources or talent. Acquire or access the good will, trust, credibility of older, larger more respected entity, organization, publication, selling force or individual. Gain more upside leverage. More optimally deploy someone elses assets. Find opportunity in someone elses adversity. Leverage off something valuable someone else invested, tens, hundreds of thousands, millions or even tens of millions to create, acquire or develop.
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How Powerful Is Ones Brand?

The more powerful your brand the more profitable the strategic alliance. What else can you do with your brand? Who elses brand can you deploy or ethically exploit? How many different ways can you do it? This goes both ways. Disney / McDonalds.
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Implementing Alliances and Acquisitions (Inventory and Opportunity Audit) What do you possess?
Products / services Distribution channels Sales personnel Sales methodology Technology (software/hardware systems) Other productive processes/methodology Facilities & equipment Underutilization Intellectual property / Technical abilities Brand 1. Good will / Trust with specific groups / markets / media 2. Core competencies 3. Affinity
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Expanding Your Growth Possibilities

Who are the people / businesses I want to reach? What other products, services and options do people typically purchase prior to buying or using your type product / service?
Who provides those product / services?
What products / services, etc., do people typically need and / or acquire along with or in order to optimally use your product or service?
What events, activities or changes typically occur to cause someone to want or need your various products / services? What other products / services does the key decision maker I am targeting also buy?
What assets do I need that I do not have?

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What periodicals /advisory materials are used by the market I want to reach?
What problem or opportunity does your product / service solve for your prospect / client? What other type of business, organization, profession etc., has more to gain than even you do by seeing you either acquire a client, or sell a specific product, service or combination? And why? What other market or industry could use / benefit from my product, selling system or methodologies? What is the MNW of my client / prospect worth to someone else? What are your highest margin products or services? What are your highest repeat purchase products or services?
31

What logical products can be created by you, acquired by you, can be adapted / adopted? What markets could your products or services also apply or translate to? What related fields could you penetrate? What parallel universes are most similar to yours? What other business markets, products or services have you been thinking about? Look for additional alliances, markets: Take on their products or services Provide services, functions Share personnel facilities Sell equity or buy equity Develop referral/alliance feeder program
32
Finding The Correct Partner

Who else (generic type entities & individuals) has direct access to the markets, influences, individuals, companies, media, distribution channels, prospects, research & data, technology or methodology you want or need?
Generic Type of Business - Point of Access / Influence - Decision-Maker They Reach
Strengths and weaknesses of target organizations, prime assets, attitude, key important point of impact / interest (i.e., money), purpose, reclamation The best partner will have what you dont have strong where you are week, etc. Match your companies capabilities with people who share your objectives Look for companies to partner with who are one step ahead of their competitors. Large companies can make good partners.
33
Finding The Correct Partner

Who has a sales force I can tap into? Who sells to the same demographic profile I want to reach? Who has the trust, respect, and good will with my prospective market? Who has authored a book thats respected in my field? Who is not a direct competitor?
Why, when and how should an alliance with suppliers be considered?

34
Competitor Partnerships
Fully 50% of alliances today are between competitors Coke and Pringles distribution in specific markets Ford and Nissan mini van design and manufacturing Phillips and Sony optical discs HP and Cannon laser printer markets What could competitors offer to your market that you cant? Who are the industry gurus my market follows? Who are weaker but quality competitors? List your possible risks / partial fears Explicit Implicit How you actually verbally, transactionally relieve / mitigate them?
35
OPTIMIZATION
How many other ways can you help other people optimize their sales, reclamation, utilization, service, value, etc.?

36
3 Ways to Exponentially Grow Your Business
THE POWER PARTHENON STRATEGY of Geometric Business Growth

37
Revenue
Direct Sales
Most businesses continuously rely on one marketing approach to grow and sustain their business (The Diving Board Philosophy)
38
Revenue
Direct Sales
What happens when that one approach becomes less effective? Your business stream diminishes and you begin to lose market share.
39
Revenue
Joint Ventures
Direct Sales
All it takes is
ONE BIG IDEA

Which one will you pick for this?!
What would happen to the stability of your business as you begin the process of formalizing your marketing profit centers?
40
Revenue
Referral Systems
Telemarketing
Joint Ventures
Advertising
Direct Sales
Direct Mail
Host-Beneficiary Relationships
Endorsements
What would happen to your revenue level and profitability if you combined a wide array of marketing approaches? (The Parthenon Philosophy)
Developing a Back End
41
Revenue
List the marketing pillars that your business is currently utilizing.

42
There are three ways to grow a businessany business. ONLY THREE WAYS
1. Increase the number of customers (clients) 2. Increase the average transaction value 3. Increase the frequency of repurchase Get more residual value out of each customer
43
OPTIMIZATION
Increase the # of Customers 1000 Increase the Average Dollars per Sale Increase the Repurchase Frequency Total = $200,000
100
To appreciate for yourself, first-hand, exactly how and why I can grow so many different businesses and practices, so fast, so big and profitablewith so little effort, time or expense, study these three pages.

44
OPTIMIZATION
Increase the # of Customers 1000 Increase the Average Dollars per Sale Increase the Repurchase Frequency Total = $200,000
100
10% Increase 1100
10% Increase
10% Increase
33% Increase = $266,200
110
A 10% increase in each of the three areas equals a 33% increase in revenue.
2.2
45
OPTIMIZATION
Increase the # of Customers 1,000 10% Increase 1,100 33% Increase 1,333 Increase the Average Dollars per Sale Increase the Repurchase Frequency Total 100 10% Increase 2 10% Increase
* * *
* * *
$200,000 33% Increase
110
2.2
= =
$266,200
125
$499,875
Look what happens now. The results are exponential.

This illustration dramatizes the power of true geometry being harnessed for your business. Isnt this smarter than the strategy youre presently following?
46
To Grow Your Customer Base Focus On:

Increasing your lead generation through:
Referral systems Acquiring customers at breakeven up front and make a profit on the back end Increasing the perceived value of your product/service through better customer education Running special events or information nights Guaranteeing purchases through risk reversal Develop a Unique Selling Proposition Host-beneficiary relationships This and the next 4 pages show you 30 totally Advertising proven, frequently unrecognized, and almost totally underutilized ways to grow your business. Using direct mail Using telemarketing Acquiring qualified lists Using public relations Do you see how many exciting and powerful options and opportunities you have available to youright under your nose?!
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To Grow Your Customer Base Focus On:
Increasing your customer retention rate by:

Delivering higher-than-expected levels of service Communicating frequently with your customers to nurture them
Increasing your conversion from inquiry to sale by:

Increasing sales skills levels of your staff Acquiring customers at breakeven up front and make a profit on the back end Guaranteeing purchases through risk reversal Host-beneficiary relationships Advertising
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To Increase the Average Transaction Value Focus On:

Improving your teams selling techniques to up-sell and cross-sell Using point-of-sale promotions Packaging complementary products and services together Increasing your pricing and hence your margins Changing the profile of your products or services to be more up market Offering greater / larger units of purchase
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To Increase Transaction Frequency Focus On:
Developing a back end of products that you can go back to your customers with Communicating personally with your customers (by telephone, letter) to maintain a positive relationship Endorsing other peoples products to your list
Running special events such as closed door sales, limited pre-release and so on Programming customers Price inducements for frequency

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OPTIMIZATION
Increase the Average Dollars per Sale Increase the Repurchase Frequency
# of Customers 1000
Total = $200,000
100
Fill in the current numbers for your own business:

51
OPTIMIZATION
# of Customers 1,000 Average Dollars per Sale 100 Repurchase Frequency 2 Total
$200,000
Fill in the current numbers for your own business:
Fill in the numbers that you project for your business after applying Jays methods:

* *
=
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Profit / Leverage Consolidation Worksheet

Actions to Increase Actions to Increase Actions to Increase
No. of Customers
Strategy
Frequency of Sales
Amount of Sales
NET NET NET
Percent / Dollars
Total Percent / Dollars
NET TOTAL Percent / Dollars
x
=
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Making The Successful Deal
An alliance is rarely a perfect match made in heaven Thoroughly analyze your options Where / what the real leverage is in every deal What do you expect to gain from the alliance deal Dont try to structure a deal instead architect a successful business All deals must be structured fairly

54
Converting From Theory To Application

1. Taking your generic lists and making them specific and personalized List of all viable companies / individuals in the field who could become strategic partners Contact info List of key decision-makers List of product services they offer Printout from their web site Create Database (Outlook)

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2. Contact
How to present your proposition. Host Beneficiary Using preemptive presentation Phone contact-rules to follow. Pre-contacting by letter. What you need to do. Identifying in advance probable objections, resistance points youll encounter. Preparing in advance your response to possible objections. How do I know its not going to take away my clients? I want control. I dont like you having control of my clients. How do I know Ill get paid? Its not the business we are in.
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3. Traps To Avoid
Host Keep Flexible (non exclusive agreements) Optimize and leverage the split Make sure you profit from the beneficiary - ROI Failing to take the time to select the right partner(s) Failing to plan for flexibility and change Failing to agree on objectives and goals Failing to plan properly for integrated growth requirements
Beneficiary Conservative Honest Automatic renewal and exclusive agreements Provisional agreements
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Converting From Theory To Application Closing The Deal

Being Strategic Understanding the psychology from both sides
How do and should you look at Joint Ventures, Alliances, Endorsements? How should you look at people committed to you to do the deal? Incremental gains Margin net worth factor Strategic advantage Preemptive opportunities Perception advantage
Taking away the risk for both sides

58
Crafting an agreement - Look before you leap

Things To Think About
Terms, duration, mutual performance expectations Non-corporate / corporate (depends on whos doing what) Residual stream after deal ends Termination - value; does it dissipate / remain Buy / Sell Who owns what - Assets, Accounts, Prospects, Brand, I.P. ?
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Making the deal work
Be inventive Keep your eye on the prize, dont loose track of the end result 100k - 90k = 10k in profit Tie up right / control manage other JV/SA activities The alliance must be embraced from the top down When you and your alliance partners view the alliance as having strong strategic value the alliance has triple success rate Before the alliance begins, communicate effectively about the respective roles, expectations, capabilities, and performance functions Only 2-4 wisely chosen alliances can yield 50-100% increase!
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Turning the one time deal into an ongoing revenue source

Program the relationship for perpetual ongoing regular offerings through preempting the channel Create ongoing streams of revenue Monitoring and measuring results

61
Anatomy Of Deals I Have Done

62
Questions and Answers
Q&A
Yours Mine Your Prospective Deal Partners
63
WORKSHOPS
Go through scenarios Formulating exercise Make generic lists of target prospects and alliances Bring down to specific names and products / services Connect up with defined strategic objective Reverse engineer Formalized action plan template

64
20 Mind Expanders
1. Rent / Lease / Sell Joint Venture Dirigibles / Blimps. 2. Teach companies how to sell on performance. 3. Generate leads / inquiries for other companies. 4. Fund the mark down bandit. Short-term point of purchase promotions. 5. Funding infomercials for local merchants, professionals or businesses. 6. Buying assets from marginal / struggling / distressed companies.
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20 Mind Expanders
7. Buy phone numbers / customer / prospect lists from bankrupt / going out of business companies. 8. Reactivating / re-purposing inactive customers. 9. Build anybodys business by funding and offering free trials, i.e., custom car wash. 10. Paying for consultants - reselling there services on contingency. 11. Converting one time sales into on going TFN services Coaching, Tree Trimming, Carpet Cleaning.
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20 Mind Expanders
12. Real estate farm building. 13. Finance the cost of underwriting the risk of adding risk reversal to a companys offer. Take a piece of enhancement in exchange. 14. Fund / create table top display cards for restaurants. 15. Create home-buying centers in upscale apartment complexes. 16. Fund direct or telephone sales departments.
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20 Mind Expanders
17. Buying options or regional / local advertising and reselling rights on a market by market, industry by industry basis. 18. Funding trials for network marketers. 19. Selling envelopes with copywriting. 20. Marketing arbitrage of seminar seats.

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PARTNER OR PERISH!

Winning in todays competitive environment

Copyright Abraham Publishing 2001

Surviving Todays Competitive Market

What is a Strategic Alliance

Mergers Vs Strategic Alliances

Strategic Alliances Growth

Why the growth?

9 Major Benefits of Strategic Alliances

43 Additional Success Factors

Copyright Abraham Publishing 2001

43 Additional Success Factors

Copyright Abraham Publishing 2001

Corporate Successful Alliances

Copyright Abraham Publishing 2001

Copyright Abraham Publishing 2001

Joint Ventures / Co-branding

Reinventing Business Opportunities

Copyright Abraham Publishing 2001

Copyright Abraham Publishing 2001

License or Acquired Licensee

License or Acquired Licensee

Copyright Abraham Publishing 2001

Core Competency Consulting

Copyright Abraham Publishing 2001

Copyright Abraham Publishing 2001

Copyright Abraham Publishing 2001

What Are Your Strategic Objectives?

How Powerful Is Ones Brand?

Expanding Your Growth Possibilities

What assets do I need that I do not have?

Expanding Your Growth Possibilities

Expanding Your Growth Possibilities

Finding The Correct Partner

Finding The Correct Partner

Why, when and how should an alliance with suppliers be considered?

Copyright Abraham Publishing 2001

3 Ways to Exponentially Grow Your Business

THE POWER PARTHENON STRATEGY of Geometric Business Growth

Copyright Abraham Publishing 2001

3 Ways to Exponentially Grow Your Business

3 Ways to Exponentially Grow Your Business

3 Ways to Exponentially Grow Your Business

ONE BIG IDEA

3 Ways to Exponentially Grow Your Business

Developing a Back End

3 Ways to Exponentially Grow Your Business

List the marketing pillars that your business is currently utilizing.

3 Ways to Exponentially Grow Your Business

Copyright Abraham Publishing 2001

10% Increase 1100

33% Increase = $266,200

$200,000 33% Increase

Look what happens now. The results are exponential.

To Grow Your Customer Base Focus On:

Copyright Abraham Publishing 2001

To Grow Your Customer Base Focus On:

Increasing your customer retention rate by:

Increasing your conversion from inquiry to sale by: