One of the most effective ways to build your business is to build strategic alliances with other non-competitor businesses that target the same market. For example, a luxury car dealership might partner with a wealth management company. Both are targeting high net worth individuals, but one won’t be taking business away from the other. Instead, they’ll both be bringing each other referral business.
Here’s how to build strategic alliances that work for your business:
Understand your potential partner’s business
Once you’ve identified a possible strategic partner, spend time understanding the business and looking for ways where you can help each other. Often, we go into these conversations saying, “I sell XX. Will you sell my product too?” This may not be the best way to complement each other.
For example, in the case of the car dealer and the wealth manager, instead of asking the wealth manager to market cars to its clients, the dealer might offer an invitation to the exclusive launch of a new vehicle. This allows the wealth manager to offer clients added value, and introduces them as potential clients to the dealer.
Identify the value you expect and can offer
Before making a proposal to a potential alliance partner, you need to pin this down. Effective strategic alliances are mutually beneficial. They don’t work if only one partner gets value.
Set up a meeting
Use the meeting to show that you’re looking to build the partner’s business as well as your own. Kick off by sharing what you know about the potential partner business and what they want to achieve. Then get further insights from them in terms of their key strategic direction and what their key objectives are, all the time looking for opportunities for their business.
Establish joint objectives
The most important aspect of the meeting is establishing objectives that are mutually beneficial to both parties. Once you have these on the table, it’s a lot easier to identify joint strategies/approaches for going to the market. For example, you might decide that you each want to see a 10% increase in sales.
Decide how you will communicate the value you deliver to the market
Make sure that your offerings are well packaged and you can clearly articulate your ideal client and what exactly you are looking for.
Get down to the specifics of what the partnership will entail
Based on the above, identify potential ways in which you can work together. It might be as simple as being aware of each other’s offerings and getting a referral commission, or maybe there is a bigger opportunity in terms of a joint ‘go-to-market’ strategy, such as co-hosting events or creating a shared product (for example, a design company partnering with a printing company to offer an annual report package). If you go the latter route, it will need a lot of teasing out to ensure that there is a clear roadmap forward.
Get things down in writing
Document everything that comes out of the meeting and take the initiative to set up follow-up meetings to drive the partnership forward.