Strategic Alliances: How to Form & Maintain Powerful Ones

17 Jan

Strategic Alliances: How to Form & Maintain Powerful Ones

Posted by: Chad Massaker / Category: Best Practices, People Networks, Social Media, leadership

Strategic Alliances, often little more than a business buzz phrase, can have a very real impact on your bottom line if executed correctly. Some of the benefits of Strategic Alliances include:

The ability to compete against stronger competitors through the creation of synergistic partnerships
Development and exploitation niche markets faster
Increased activity throughout the entire sales pipeline – all the way from lead generation to closed business.

So what is a Strategic Alliance and how do you form one that works and lasts? I’m about to tell you:

First, let’s look at some definitions for “strategic”:

Pertaining to, characterized by, or of the nature of strategy
Important in or essential to strategy
Of an action, as a military operation or move in a game, forming an integral part of the stratagem

Next, let’s look at some definitions for “alliance”:

the state of being allied or confederated
a connection based on kinship or marriage or common interest; “the shifting alliances within a large family”; “their friendship constitutes a powerful bond between them”
an organization of people (or countries) involved in a pact or treaty
a formal agreement establishing an association or alliance between nations or other groups to achieve a particular aim
confederation: the act of forming an alliance or confederation

Finally, the definition for a Strategic Alliances, (as defined by Wikipedia)

A Strategic Alliance is a formal relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need.

I like this definition due to its emphasis on formality and “agreed upon goals”. One thing that I think is missing from this definition is that the relationship should also be mutually beneficial – as this is key to making the Strategic Alliance last.

Some Strategic Alliances Basics

The are many kinds of strategic alliances. Most center on revenue creation. Examples include:

Reseller / Affiliate Model: You become a reseller of a certain product or service in exchange for sales and marketing support of said product or service.
Outsource Relationship: Over time you come to realize that certain parts of your business are better handled by another entity outside your business because it is more profitable, efficient, etc.
Business Development: Referral Partnership, Co-Marketing, etc.

It is the last type of Strategic Alliance, business development, that I would like to spend some time on. This can be one of the easiest to form and at the same time the most powerful. Who should you strategicly partner with? The obvious answer is professions that you naturally get referrals from already. For example, I own an IT company, so I receive a great deal of referrals from an ISP broker and telecom hardware vendor that I have allied with. Another great example of a good strategic alliance would be composed of a CPA, financial planner & estate planning attorney.

It is important to formalize this relationship as much as possible to get the maximum results. Formalization should create a culture of accountability in the alliance which is critical to the success of it. Here are some ideas.

Meet at least once a month and share sales pipe line reports
- What deals are you working on now?
- What deals have you recently closed?
- Discuss referrals that have been passed around the alliance. (status, quality, etc.)
- Create a list of specific prospects that you would like to get into and go over the list with your alliance. Use Linkedin and other business social media sites to make connections.
- Are you have trouble closing any deals? If so, how can the alliance help?
  - Powerful Example: If the prospect does not have the budget for your project or service, is their anyone in the alliance that can create the savings through their product or services that essentially creates the funds for your project? I use my telecom broker in this regard. He can come in and save them hundreds to thousands a month, the savings from which cover most or all of the cost of my proposal.
- Side Note: If, when I say “sales pipe line report”, your eyes glaze over, then you probably need a customer relationship management (CRM) system, such as ACT!, or Microsoft CRM. I recommend Alanna Galiano or Emerging Technologies to get your up to speed.A good CRM is essential to making this strategy work.
Develop a joint Needs Assessment
- If you already have a Needs Assessment, this is easy, just ask each member of your alliance for the top 3 questions that you should ask when conducting a Needs Assessment on your prospect that might generate a referral for them. For example: I always ask a few questions about their phone system to see if there is a possible referral opportunity to the telecom hardware company in my alliance.
Joint Marketing
- Create a “Partners” page on your web site and add logos with link backs to each of your partner’s web sites. Make sure they do the same.
- Co-sponsor an event together, such as a conference or tradeshow. Obviously the event should contain target prospects that you are all are going after.
- Find other ways to cross market:
  - Drop a brochure or coupon from an alliance member into your invoice mailings.

More Advanced Strategic Alliances

Want to take this concept to the next level?

Form an alliance around a business process or event. One idea that came from my friend, Bob Hill of Hill Corporate Partners, centers around office moves. Think about it. When someone want’s to move their office, they need the following:

A commercial tenant rep, like Bob Hill, to find the new space
An office furniture company to furnish the new office
A moving company to move the stuff in the old office to the new one
An IT company, like Carceron, to restore the computer network
A telecom broker, like Elite Telecom Services, to get the telephone lines and Internet service going
A telecom hardware company to setup the phone system for the new location
A printer to handle change out of all collateral such as business, cards, brochures, letterhead, etc.
And probably a CPA

You could market the alliance with an informational web site that is search engine optimized (maybe everyone chips in for some pay per click advertisement as well). Make sure that there is good quality content on the site. In the case of the office move, perhaps some check lists, Dos & Don’ts, etc.

Getting Started

If you don’t know all of the people that you need to form your alliances, I suggest joining a BNI or Corporate Connections referral marketing program. Corporate Connections chapters, like Synergy, are developing a strong, structured program for strategic alliance creation and development. Another venue might be Vistage. I am a director for Corporate Connections in the Atlanta market, so please feel free to contact me directly with any questions about that program.

What are some other ideas for an Advanced Strategic Alliance?