Sean's Notes
Powered by 🌱Roam GardenThe ABC Client Method: Get Paid More With Less Clients
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Creating Opportunities
How do you sell lemonade if you don't have lemons or a lemonade stand? Simple, you broker a deal between a lemon producer & someone with access to street traffic (distributor).
A Producer Defined
A Product Producer is business or person who creates and sells a physical, digital (information or software), or 'Done For You' Service.
While this can include fully customizable services, generally the math works in favor of working with offers that have a known cost per product.
A Distributor Defined
A Distributor is a business or person with access to influential communication with an audience. The audience may be a customer base, lead base, or social media following.
A distributor can also be a product producer, and vice-versa. A producer with access to communicate* with their customer base can act as a distributor, and a distributor with a product is a Product Producer.
A distributor can, however, not be a product producer if they just have access & influence to an audience without their own product.
Service Business Sales Models & A New Approach
The classic approach to providing services model. You agree to provide a service for a person or business in exchange for an agreed upon fee.
The Growth Broker. You provide a service in exchange for a % of sales or profit as it relates to new business you produce with your service.
The traditional affiliate model. You agree to distribute a product or service in exchange for a % of sales.
The traditional JV broker. You broker a deal between a product producer & a distributor for an exchange of % of sales.
Hybrid Approach - The Distrobution Deal
Hybrid Model The ABC Client Method. Combing the Growth Agent services & The JV Broker connections.
[Client A] You are selling an approach to growing their business then closely working with them to help them reach the proposed growth goals in exchange for a profit share. You can even sell a more traditional type service on this side of the business without a profit share; the goal is to build a connect with this client. Ideally they have a product that you understand well.
On top of this you are also creating distribution deals with Distributors for your client, in exchange for a % of profits. You approach the distributors as you would a potential client [Client B] , selling them on the opportunity to profit from promoting your clients [Client A] product.
Side Note: You may find it more effective to sell your Growth Services first to [Client B] before proposing a partnership deal with [Client A].
The distribution deal you broker between your [Client A] and [Client B] becomes its own sort of 'client' within your service business. It is a stand alone project which you lend your Growth Agent skills to, you've negotiated a % of profit share on both sides of the deal.
EG: Client A has a product. Client B has distribution. You broker a promotion by Client B to promote Client A's product. You manage the promotion and make it a success in exchange for a % of sales on both sides of the deals.
This strategy gives you 3 potential sources of income from 2 clients...
1: Income from you services as a Growth Agent from [Client A]
2: Income from you services as a Growth Agent from [Client B]
3: Income from your independently brokered distribution deal between [Client A] and [Client B]... effectively giving you a virtual [Client C].
When Life Gives You Lemons - The ABC Client Method in Action
Revisiting the question above... let's look at a metaphor we can apply to creating profit share projects with an A to B Brokering Deal. One where you connect a product producer & distributor.
You, being the entrepreneurial type, can see the value in turning lemons into lemonade and selling it on a hot summer's day to people in your neighborhood*. The problem is, you don't have lemons or a place to sell them!
You pull up Google maps and type in "lemon farm" and find 3 different lemon groves within 30 miles of your house... there's your supply, you think.
The Product
Now, you could go buy a bunch of lemons for your lemonade stand. But you don't have that kind of capital to work with, and why take on the risk of having a bunch of lemons go bad on you.
You also could offer to sell a traditional marketing service to help them sell their lemons to lemonade stands.
Or you could follow the hybrid approach of providing a growth service along with brokering deals for the Lemon Groves. But let's keep it simple in this example and just look at a brokerage deal...
So, you approach all three Lemon Groves (the Product Producer) with a simple idea. If they'll let you sell their lemons for them, without you having to buy them directly up front, you'll take a small % of the sales and give the rest to them.
You've remove your risk of being stuck with a bunch of lemons, while ensuring you'll always have access to a readily available supply. You've also made it so you don't have to start your own lemon farm and grow them from scratch!
On top of all that, your proposal to the lemon farms comes with little risk to them, they get paid if you move product - and don't lose sales if you don't since they're not relying on you as their only sales method.
You secure the distribution deal with the lemon farms, now you need to figure out where and how to sell your lemonade.
Distribution
Where: You have a few options. If you had your own distribution channel you could simply make the lemons into lemonade and sell them directly. This type of deal is usually referred to as an affiliate deal.
Your second option is to bring in another partner (a distributor) in the A to B Brokering Deal. Someone who has their own distribution channel and access to the target audience you believe would buy.
In our lemonade example, this would be someone who has direct access to the busy street you know your target audience is on. Ideally this isn't someone who lives on a street in siberia in the winter (hot coco would be the better product to consider); part of your job as the broker is to understand who wants to buy lemonade and why. This understanding will help you persuade a distributor to let you set up shop on their yard... to set up shop in front of their "audience".
So that's exactly what you do. You walk up to each home on the busy street you hope to sell your lemonade on and ask them if they'd like to partner with you on a project.
Many of those you talk too are busy or not at home, but with follow up you manage to get one to agree to let you set up your lemonade stand in-front of their home in change for a share in the profits.
Congratulations, you have negotiated a distribution deal between the lemon farm & the homeowner!
You've reduced your risk & costs of holding onto product. In-fact you have no inventory or warehousing costs at all.
You've reduced your risk of costly advertising & building an audience from scratch. You're leveraging the audience at the doorstep of the homeowner you made the distribution deal with.
You're working with a proven product that's been tried & tested over time, you don't have to create the marketing from scratch.
Question: What percentage of profits should each party get?
As we've discussed you've greatly reduced risk to everyone involved, especially yourself. The percentages each party gets can be highly variable based on a number of factors we'll discuss later, but a deal along the lines of 40% - 20% - 40% is a good place to start. 40% for the product developer, 20% for you, and 40% for the distributor. You can get creative here, but in general it pays to be a minority partner in the deal, for reasons we'll explore more later.
Setting Up The Lemonade Stand
This is where we diverge from a traditional JV broker deal. Instead of just connecting the dots between a product & a distributor we will be 'building the lemonade stand'.
Why build anything? It may be tempting to simply stick with the traditional JV broker method of connecting the dots and walking away, but that's the problem -- walking away is giving up a few important opportunities we'll explore next.
Building gives you much more control over the success of the promotion. It can be that simple really, if you're just connecting people you may find yourself having little impact on the deal they put together.
Building helps you track the numbers. To get paid your percentage you'll need to know the numbers, how do you get access to the sales data? More on this later. Beyond just securing your payments access is important to measuring how well the promotion is going while also giving you a case study for future deals.
Return to the lemonade analogy... neither the home owner nor the lemon farm has a lemonade stand. The stand is the mechanism of distribution, it's the sales & marketing materials that informs the target audience on the street that you have healthy, refreshing, life changing lemonade for sale!
Now, you can build the stand yourself, or sub-contract it's construction. If you already have the skills & systems needed to construct it yourself you further reducing your risk; albeit at the expense of your time.
Building The Lemonade Stand | The Distribution Mechanism
Let's assume you plan on building out everything yourself (as someone who runs an agency would do) as opposed to subcontracting. You would create the lemonade stand just as if you were a construction company who only designs & builds lemonade stands.
Plan - Much of your plan is already spelled out in your proposal, this will serve as your guide as you execute the strategy.
Organize - Any business should have basic Standard Operating Procedures they can turn to when it comes to organizing & executing projects. These can be created on the fly, but should be captured in some way. Organization also entails Project Management, the straightforward process of tracking progress of the project.
Create - Since you're working with the right kind of clients they already have many of the assets you'll need for your campaign to be successful. You can leverage these and save yourself time. You'll also very likely be able to leverage the team members of your new partners to help create needed assets.
Launch - At an agreed upon point you have to 'open the doors' and go live. In marketing terms this is when you start distributing your marketing materials to your target audience.
Maintain & Grow - Post launch there will need to be monitoring of progress, improving of the processes, and a strategy in place to continually improve.
(Each of the above will be broken down in detail in future sections.)
If all goes according to plan you'll find yourself a proud partner in a lemonade stand empire. You manage (for a fee) the operation, bridging the gap between the lemons & the street. Your residual payments on the profits are the return on your investment of time & energy, along with the risks you took, to create this endeavor.
Now we need to look deeper into the "C" in the ABC client method.
The "C" in The ABC Client Method
The distribution deal you created and executed with [Client A] (product producer) and [Client B] (distributor) has many other opportunities you can explore & offer.
[Provide Services] As we've discussed in the hybrid approach to selling services you may provide services independently to [Client A] and [Client B]... separate from your distribution deal; these can pay a % of profits or be the classic approach to providing services with fix fees or retainers.
[Increase Distribution] You can also create other partnerships to further improve the performance of your Distribution Mechanism, your lemonade stand. You could, for instance, convince client A or B to pay for more advertising and split the profits, or get the distributor to promote another product of the product producer.
[Flip The Promotion] - If the distributor also has a product they sell and the product producer has an audience, then you can flip the promotion by having [Client A] promote [Client B]'s product with the same deal you negotiated when [Client B] promoted [Client A]'s product! This gives you the real possibility of adding another residual income stream to your business.
But there's even more opportunity if we consider adding another client into the equation... Client C.
The Multiplication Effect - Turing 3 Clients into 6 Revenue Streams
Let's step away from our lemonade stand analogy for now since most of you probably aren't planning to specialise in fruit juice stands. Let's now switch to a more 'real world' situation...
Let's say you have a [Client A] that has a software that helps businesses email market. You made a deal with a [Client B] who is an influencer in the business space and has information products teaching businesses how to do marketing.
They both have products & distribution, and you've already created two deals...
Deal 1: [Client A Software] is promoted to [Client B's Audience].
Deal 2: [Client B's Information Training] is promoted to [Client A's Software Users].
Good job! You have two residuals coming in from two clients, and maybe more if you are also providing consulting services to each client as well.
What's Next? Finding Client C.
[Client C] is a third client that you can approach with a distribution deal. Let's say they have a software product that helps businesses manage their taxes; something all businesses need to think about.
Their target audience is the same audience as both your [client a] and [client b]... so you propose that you will negotiate a deal with one or both of them to promote the tax managing software.
Now you have a third distribution deal in the works... but wait there's more!
Not only do you have a potential third deal, you have a possible 6 deals at your disposal! This is the multiplication effect in action.
How it Works...
A promotes B, B promotes A | A promotes C, C promotes A | C promotes B, B promotes C.
Each promotion is it's own potential distribution deal for you to facilitate!
While some deals may work better than others, and it's not always a given that certain clients will agree to promote each other, the potential is clear: Turning 3 clients into 6 revenue streams (or more if you are also providing them consulting services).
While this may seem overwhelming at first, consider the following...
1: You don't have to pursue all these deals at once, you can prioritize based on which ones you think will do best.
2: Closing a deal with a company you already have connections with is much easier than getting new clients.
3: Closing 3 clients in a year may not sound like many, but if they're the right kind of clients they may be all you need. The 6 promotions that can stem from the right clients may produce more than enough revenue for your business.
- Focusing on 3 clients is much easier than 6 or more you'd need with a traditional service based business, obviously. Focus is its own kind of currency, anyone who knows what it's like to try and juggle many different clients that aren't paying will can attest to this.