This excerpt was taken from an article written by Olga Mizrahi on fastcompany.com
Instead of competing, try collaborating with another company. Here’s how to get started.
Strategic alliances are probably the most overlooked form of offline marketing and, yet, they’re one of the most meaningful. Two heads are better than one and, in many cases, two companies are better than one–especially when they combine resources or share expertise in order to build new business.
Many of us tend to be so individualistic that sometimes it’s hard to consider relying on someone else. Don’t think of alliances as handing over part of your business, though. Rather, alliances are just like networking. They’re almost an extension of the adage: “It’s not what you know, it’s who you know.”
This isn’t rocket science. It’s simply a way of thinking about your current relationships in a different way and looking to the outside to form new relationships. Open your eyes to all different kinds of possible alliances, including: key customers, industry leaders, any part of the supply chain, nonprofit organizations, trade associations, Chambers of Commerce, former employers, competitors, etc.
According to studies in the U.S. by Booz, Allen & Hamilton, in the past 25 years, the number of alliances has grown by 25% each year. There’s good reason for that kind of growth. There are a host of benefits to these types of relationships, including:
- Saving money on shared expenses.
- Expanding your customer base.
- Utilizing on a partner’s expertise in a given area.
- Having a trusted advisor.
- Capitalizing on another company’s size or prestige.
Finding a Common Interest
Some of the most popular alliances are demographic or geographic relationships. The key here is to ask, “Is there a company with a product or service that overlaps with my target audience and that I can partner with for a win/win scenario?”
Companies in the wedding business are particularly adept at demographic alliances. Jay’s, a wedding catering service in Southern California, holds a tasting event once every eight weeks. Not only do they have engaged couples try out all of their dishes, they also have on hand local florists, photographers, wedding location coordinators, and wedding planners. In this scenario, by acting as a one-stop shop for couples, every vendor wins.
Another good example of a geographic alliance is the local coffee shop that displays an impressive arrangement of fresh flowers on its front counter, provided by a florist located just a few doors down. The coffee shop receives a beautiful addition to their décor, while the florist gets to reach out to potential customers in the area that may not have otherwise been aware of its services.
Some alliances are both demographic and geographic, but go beyond those factors, as well.
Relationships with vendors or suppliers are also key places to cultivate alliances. For instance, Long Beach personal trainer Clint Bigham of We Fit Gym inadvertently formed an alliance with one of his vendors, TurboSonic machines. Because Clint couldn’t afford to purchase TurboSonic’s entire line of exercise equipment, he asked the manufacturer if he could act as a trial facility for their products. Now, when a Southern California customer calls TurboSonic wanting to try out the equipment, the company sends them to Clint’s gym. Clint gets to meet with potential new clients, while TurboSonic gets to show off its products without having to open a showroom. Furthermore, because of their continued use in the gym, some of Clint’s current clients have bought a TurboSonic machines for their own personal use.
Making Alliances Work
It may seem intimidating at first, but it’s not all that difficult to form alliances. (Think of it as networking with a purpose.) First, look for a common customer or audience. Once you’ve identified a company that fits the bill, open the lines of communication. Then, answer the following questions for your potential partner:
- What can we package together to save money?
- How can we work together to expand our reach?
- What resources can we offer one another?
- How is this a win-win for both parties?
That last question is the most important. There must be a win-win situation in order for an alliance to work. There’s always “consideration”–a value bargained for by both parties. Nobody gets something for nothing.
Whether through a formal contract or a gentleman’s handshake, alliances can take many different forms. The best alliances are completely voluntary, open-ended relationships that either party can leave at any time. These may come in the form of real-world partnerships or may exist only online. Consider the following methods of collaboration, with varied strategic benefits:
- Advertising together.
- Hosting events together
- Sharing marketing efforts.
- Sharing trade show booth space.
- Co-authoring presentations.
- Co-branding promotional products.
- Offering referrals (with or without commissions).
- Redirecting business to each other’s Websites.
- Becoming “certified” by another company.
- Forming “preferred supplier” relationships.
- Integrating with noncompeting parts of the supply chain.
- Sharing information and advice, as a “brain trust.”