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?

Helping Others

Help connect people that need to know each other. The concept is simple, even the act can be simple, what’s tough is taking the time to get to know people and learn what their specific needs are. Things you should know about people you network with the most:

• Where are they from?
• What college did they go to?
• Fraternity / Sorority Membership
• Hobbies, Special Interests
• Most profitable client type
• Least profitable client type
• How they help most clients solve a problem(s)
• How they help their most profitable clients solve a problem(s)

In the current economic climate, helping someone get a job is also a great thing to use your networks for. Times are tough  – many who are not business owners are looking for their next job or worried that will have to soon. When you’re out and about, listen out for any open positions and for companies that are experiencing a growth spurt. Staffing and recruiting companies make great friends in this regard, for both getting friends a job and for helping fill positions for those businesses that you know are hiring. My friend is Larkin Dailey, owner of Snelling Staffing (http://www.snellingatl.com). She has helped me get numerous friends jobs, even in this tough economic climate. Remember, staffing and recruiting firms need opportunities too – companies that are looking to hire – especially in mass, like at a call center. (Staffing companies have more than ample supply of resumes given the current economic climate, so be discerning who you send them for placement. People with rare skills sets are obviously more valuable)

Form Strategic Alliances

Finding prospects while networking is good, finding strategic partners that open up fields of prospects to you is better. However, it does not always have to be business development related. More and more companies are looking to differentiate themselves by creating “mash ups” which might be a reseller or affiliate model relationship, and outsource relationship or something else a little more subdued.

Personal Branding & Social Media

I have become acknowledged as something of a defacto expert on this and I’m not sure why. What I do feels like common sense to me. Show up in all the right places at all the right times with all the right people and seek to help others which will make you more known. Translated into literal terms:  “If you belong to an association, get on the board – for more recognition, try actually doing something of value for the organization – avoid boards where you are a “rubber stamper”. Don’t feel bad about joining a board for exposure if you are providing value… it’s an expected trade off. When you are networking, make sure that events that you are going to have the right kind of people, i.e. people that you need to meet or people connected to other people you need to meet. It blows my mind why businesses continue to go to networking functions that they have long since outgrown and then complain that networking does not work. Know the demographics and psychographics of your customer base and adjust your networking accordingly. If you don’t know what I am talking about, seek the advice of a marketing expert.

How does social media tie in to all of this? Well, I’m no “expert” despite popular opinion, but here’s what I think: Social Media, simply described, is a marketing medium (platform) -  you have radio media, TV media, social media, and countless other platforms upon which to market. Whether or not that is what you use FaceBook for, it is still Social Media (how do you think FaceBook makes it’s money? not from you obviously! from Advertising). That being said, how do you use it? Simple, as an online extension of your physical networking world. When you come back from a networking function, immediately pull out of your business cards and connect to the people on those cards on whatever your mediums of choice are. I like Linkedin & FaceBook. Now, whenever you do status updates, they see you what you’re doing. You stay in front of them as long as you update. So what do you say in your updates?

• What are you doing that is interesting and might generate conversation?
  • Good: Headed to Networking in Atlanta tonight to network with hundreds of other business professionals
  • Bad: Going to a network event (too simple)
  • Bad: Taking kids to soccer practice (no offense, but no one cares about your kids but and whatever family members you connected to on FaceBook)
• Industry related news that people you’re connected to care about and can understand. Here some actual article titles from InformationWeek, a newsletter I an subscribed to:
  • Good: Laptop reliability study: Asus & Toshiba Come Out on Top
  • Bad: Roll Your Own Ubunto Private Cloud