We are very aware of the benefits of travelling as it gives you insights into different cultures and can help give you a different perspective on life.
This is equally true for doing business internationally. Since launching WE LOVE NUMBERS in NYC we have learnt a number of business practices that we can bring back to our Australian businesses to improve them. The biggest takeaway we have had is the importance of partnerships.
When asking people’s advice on how we could grow our membership base in NYC they straight away pointed out that the approach that we were using in Australia is too slow.
The key is to find other businesses, communities or influences who have access to your target market and incentivise them to send leads our way. This seemed pretty obvious to us but the facts were that we hadn’t done this in any of our businesses and it made us wonder why.
We realised that we had been the victim of forming an opinion early in our entrepreneurial journey that unfortunately inhibited us from leveraging this huge growth opportunity.
Our first business was a private wealth management firm that focused on helping high net worths transition into retirement and manage their wealth.
We started this in the depths of the GFC and we had seen a lot of people get burnt due to advisers having dodgy relationships with product providers that benefited them but not the client. However, we took the view that we needed to have very high ethics and avoid all partnerships that involved an exchange in money.
We did try establishing some referral relationships with providers that our clients needed, like accountants and lawyers, but unfortunately had negative experiences with either no clients being referred back or even worse them trying to turn the clients against us.
Looking back now it is clear that these experiences and subsequent perspectives have hurt us. The majority of us are in business because we are passionate about what we do and believe that we can add value to others through the delivery of our delivery of our service or product. The most important thing you need to focus on is how you are going to get sales. Without sales you may have a great product but you won’t have a business.
With every sale there is a cost of acquisition. This is how much you need to spend in order to get someone to give you money for what you are selling. This could be through the cost of a salesperson’s time, through paid advertising like Facebook ads or PR.
The key to a successful business is to get that cost of acquisition as low as possible compared to the lifetime value of the customer. If you determine for your business model that your lifetime value of a customer is $10,000 than your goal for cost of acquisition is to be less than 5% of this, it means that you can spend up to $500.
There are no rules on how this money needs to be spent. If another business can provide you with 100 customers you could offer them $50,000 to incentivise them to do this.
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We used to think this was unethical, however after seeing how successful companies are doing it in America we have changed our views. As long as you run an ethical business and your customers get value from what you are offering, who cares how you got them?
In this situation everyone wins. Your referral partner has just found another revenue source which will help fund their growth and make their company better, they have also found a way to add extra value to their customers. You have found a way to speed up your growth plans in a viable way which means that you can improve your business and most importantly the customer has been directed to a company that offers something of value that they need.
In Australia it is very well known that we have an aversion to sales. If you want to be an entrepreneur and grow a company you need to get over this as sales is the lifeblood of your company. However, by focusing on forming partnerships you can mitigate the amount you will need to sell as you may only need to sell one person (the partner) to end up getting 100 sales as you have empowered them to make the sale for you.
This is now where we are focusing all our effort in our companies. If anyone would be interested in forming a partnership with WE LOVE NUMBERS, Wealth Enhancers or Grow My Team please reach out to us.