Over the years I have seen (and designed) a few successful new business models. A few years ago I came up with one that is fast becoming my favorite: the idea that companies can generate revenues with a 100% margin by simply rejecting work that they cannot do.
Imagine that your firm produces and sells data on the oil industry. A potential customer finds you and asks for data on the natural gas industry. Instead of saying, “Sorry we don’t have that,” you say “We don’t have that, but our partner does” and you steer this highly qualified prospect to another firm and earn a commission on the sale. It’s affiliate marketing, of a sort, but it has a social dimension in that you are making an overt recommendation and essentially vouching for the other firm.
To make this work you first need to identify the types of qualified prospects ready to spend money that are likely to come your way: folks in the same industry segment but wanting a type of data/service you don’t offer; folks in other industries wanting the type of data/services you offer; etc. Actually, all you need to do is ask you sales and marketing folks who they are turning away and you will immediately have this info at your fingertips.
Once you’ve identified the opportunity you simply have to reach out to the firms you’d like to partner with. Some will think you are nuts, some will raise competitive concerns, and most won’t get it at all. But, if you’re lucky, you’ll pick the right potential partner, they’ll will give it a shot, and everybody will win.
This approach is a variation on the bizdev strategies of some of the smartest folks in the content business who see opportunities where others see competitors (guys like my old boss Patrick Spain). It also shines a spotlight on new product development opportunities. If potential customers are coming your direction, why aren’t you selling them what they want? Are there line extension opportunities right under your nose?
It’s not that hard to do if you buy into the premise… Is your firm ready to do nothing and profit from it?