There are great ways to jump-start a new business or grow an existing one – by creating a strategic alliance or partnership. Many organizations are looking for ways to drive market share and sales with a small investment – or “doing more with less”. This article will help you design partnerships/alliances with other companies.
A strategic alliance is a partnership created by 2 or more businesses that have complementary products and are usually in different sectors. The main objective in having a strategic alliance is to grow your product/service market share. To create a strategic alliance and maintain success over the long run, follow these easy steps.
- Fully understand your product or service. Make sure you know your customers and know what is working and what isn’t. Ask yourself these questions:
Why do customers like my product? Why don’t they?
What are the demographics of my customers
What marketing programs have worked and why? What hasn’t worked?
- Make sure you have specific goals for your product or service. Have goals outlined for sales growth and other metrics that are important to your business. You should also have softer goals such as, brand awareness plus others. When you have specific metrics and goals, it will help you identify the right partnerships and help you build guiding principles to ensure long-term success with those partnerships.
- Analyze companies and products that compliment your product or service. Ask yourself if you need another company’s resources to help your business grow. At this step, have a set of guiding principles such as needing a customer that focuses on high-end customers, some one that is in a specific geography and/or in a specific industry. Also, think about what companies are easier to enter. For example, you may think company X is a great match but maybe they are not making it a priority which will cause you delays. Don’t be afraid to switch gears and focus on another company that may be smaller and quicker to make things happen, PLUS have the right products or services to help your business grow.
- Have an in-depth knowledge of the partner that you are approaching – DO YOUR HOMEWORK. If you understand the organization, this will better prepare you to gear your pitch to them and show them how your company can help them grow. Don’t present “how great you are”, focus on them and their product. At the end of the day, you want them to feel that they fully understand the benefits of what you can offer.
- Create a win-win partnership, this is key, as you want to ensure that you both are gaining something that will help your business grow. Do not be afraid to walk away, know your limits and stick to your plan – but be flexible. The tactics of your partnership can be to exchange marketing channels – this is a great way to get access to engaged customers through your partner’s channels with little or no funding. Just make sure that you are both getting and receiving something that is beneficial to them.
If you follow these steps and put in the time to fully understand what you want to get out of a strategic alliance, and are open to offering up ideas, you will have a long-term strong partnership.
By John Hester