Building Strategic Alliances to Grow Your Business


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A strategic alliance is when your company enters into a loose partnership with another business to help each other make extra profits.

Here are four strategies for building effective strategic alliances:

  1. Define your target market. This is a fundamental when it comes to any form of marketing. Failure to define your target market will result in failed marketing efforts every time. Who are the people most likely to buy your product or service? Think about your average customer in terms of age, sex, income, where they live and what their interests are. Once you understand who your customers are, you’ll have a much better idea of what they need and how you can sell the solution.
  2. Decide whether a strategic alliance makes sense for your business. If your target market is very broad and your offer is very appealing, you may be better off advertising in the newspaper. Strategic alliances tend to work in situations where there is a particular group of people you want to target and there are other non-competitive businesses already dealing with them. For example, your company might offer corporate training services. You could consider partnering with a stationery supplier with a predominantly corporate client base.
  3. Identify businesses that would make good strategic allies. You need to partner with businesses that are not competing with your in terms of products or services. For example, a carpet dealer might partner with a lighting store. Both appeal to customers moving into new homes, but they’re not competitors. Each business could give out discount vouchers for the other, and both would get new clients.

Ensure that companies you partner with are positioned at the same end of the price and quality spectrum – you need to share the same target market. Partner with businesses who treat their customers well and whose customers like them.

  1. Decide what you can offer. Commission is a good basic option. You could give 10% of every sale made based on a referral from your ally. Or, if the referral will result in regular repeat business for you (for example, if you’re a hairdresser as opposed to a car salesperson), you could give the ally more or even all of the profit from the first sale. It will certainly boost the number of clients they send your way. You could even try the approach of just giving the ally business a good reason to refer you. The only thing you’re offering the ally here is the security of knowing they’re sending their customers to the best business possible. This works well for businesses that have to refer clients somewhere. For example, an optometrist has to give people an idea of where to buy glasses.
  2. Find a system that works for you. You can choose a referral system, where you partner with one or two other businesses and refer business to each other. Or you could form a collective. This works well for people in the service industry. For example, if you’re a graphic designer, partner with a copy writer and a web developer to take on website projects together.

Another option is to give gifts to your customers to keep them loyal to you. For example, if you sell cars, you want to stay top of mind, even three years down the line when the customer is eventually looking for a new car. You might approach a day spa and say, “Most of my customers are executives you can afford and would enjoy a massage. If you give me a discount voucher for R50 off a massage, I’ll email it to all my clients and write a personal recommendation for you.” That way, the customer gets a great offer, you get to be the good guy and stay top of mind, and the day spa gets potential new customers.

You can also do the reverse – gift other businesses whose clients you want to target. For example, if you’re a management coach, you might approach a stationery supplier and say, “I’d like to offer you a gift to pass on to your top clients. It will make them love you and offer them genuine benefits. I’m a management consultant and I normally charge R1250 an hour, but for your clients, I’ll do a full one-hour appraisal and performance evaluation free of charge.” The stationery supplier now has something to offer that differentiates it from competitors, and you have a personal recommendation from a supplier that your prospect already trusts. Win-win!

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