It is hard work perhaps but creating strategic alliances is one of the smartest business building moves a practice can make. Perhaps it is because it is not an easy or quick thing to do that so many professional services businesses never do it, but those that do reap the rewards for years.
A strategic alliance can take many forms from a simple heads of agreement where 2 firms agree to co-operate with each other through to the more complex arrangements where mutual shareholdings are arranged and business partners take a commercial stake in each others businesses.
For most professional service firms the more simple arrangements work best. An agreement to co-operate and cross-market each other services to the same target market and help generate business opportunities for each other tends to be ideal.
It is a simple structure, relatively low cost and usually generates the quickest results. It is also the easiest structure to move on from quickly if things aren’t going as well as you’d like, or if there is a unexpected shift in alignment.
The keys to making a strategic alliance work revolve mainly around that word “strategic”. One needs to be very clear about who the ideal target market is, and then understanding what other businesses or industries are also trying to target the same potential customers. Be clear about what it is you want from an alliance and be business-like in pursuing the right arrangement. Being business-like doesn’t mean trying to secure the last possible cent out of the deal or trying to come out as the “winner” in negotiations – that is a surefire way to wreck any potential alliance to begin with.
Documenting the expectations and agreements on revenue sharing, marketing commitments, service standards and brand protection issues for both parties is essential to creating a trusted commercial relationship. A handshake just doesn’t cut it.
When the right ally is chosen and the right deal is put together that benefits both businesses and the potential customers, then it will typically generate a considerable number of opportunities. For those that get this balance right it often solves any lead generation requirements for years to come as great alliances effectively become outsourced sales and marketing units for your business. You benefit from other companies successes in their sales and marketing as much as they benefit from yours.
Look for businesses and industry sectors targeting the same customers that you want. Ideally they will be delivering a complementary service or product – although it may not be a “logical” extension of what you do. It will however complement your planning services, or cost-saving focus, or free broking/transaction model, or whatever it is that you are wanting to be known for to the target market.
For example, if you are targeting young couples who are just settling down then it may be that wedding organisers or marriage celebrants are an excellent fit. Their services have nothing to do with the provision of financial services – so it doesn’t appear to be logical perhaps – however their clients are aspirational and into planning their future and trying to make every dollar count…..good prospects for many financial advisers perhaps?
Be strategic in thinking about how to get in front of more of your ideal customers. Plenty of other businesses are already getting those customers attention with their marketing dollars, so all you have to do is figure out how you can help that business do better and you should be able to piggy-back on their marketing success.
That’s smart marketing.