Have you ever gone into bookstore Barnes & Noble, browsed around, picked a handful of interesting titles, then wandered over to the in-store Starbucks to enjoy your favorite coffee drink while perusing your new finds?
If you have, you’ve just demonstrated the power of a strategic alliance. Barnes & Noble doesn’t sell coffee. Starbucks doesn’t sell books. But by partnering strategically, these businesses have created a successful user experience by which both companies gain more customers and increase their revenues. It’s an excellent example of a symbiotic relationship.
As a business owner, you aim to provide the best possible product or service for your customer—but if you tried to meet all your customer’s related needs, you’d go crazy, broke, or both. You could be the best home remodeling contractor in town, for example, but what happens when a prospect needs architectural plans or an interior designer before they can work with you? You can’t afford to expand your business into architecture and design. STILL, if you partner with a local architectural firm in a strategic alliance, you can offer that additional service as a way of closing the deal—and both companies will get more business as a result! (The architect, in turn, can make your contracting services available to her clients, increasing your revenue even more.)
Types of Strategic Alliances
Strategic alliances between companies generally take one of three forms, based on how they choose to work together:
· In a non-equity alliance, the two businesses agree to work together as separate entities, offering shared services and leads without any exchange of equity. This alliance is the most common among companies and requires the least amount of commitment.
· In an equity alliance, one or both companies buy equity in the other. The two companies remain distinct, but one now has a partial ownership stake in the other. (Think of it as a partial merger.)
· In a joint venture partnership, the two parent companies pool their resources to form a third “child company,” creating a “one-stop-shop” for the services they provide and sharing the profits accordingly.
Tips for Developing Strategic Alliances
Strategic alliances and partnerships with other businesses can significantly increase both your customer base and your profits—but how do you choose the right partner company or companies? Some tips to point you in the right direction:
· Make a list of additional services or products your customers might need related to your business, but which you have neither the time nor resources to provide.
· Make a list of associated companies in your area who share your target market without competing with you directly. (Example: a school supply store and a yoga studio might both target moms in their 20s and 30s.)
· Research and network to determine which companies are serving the same markets are in alignment with your vision or your customer’s needs.
· Make an attractive offer. (Remember—the alliance needs to benefit the other company at least as much as yours!)
Partnering with similar companies can exponentially increase the value you provide your customers while providing additional cross-platform marketing opportunities. Wicked Bionic can strategize with you to find the best alliance partners as well as the best ways to market those relationships to your mutual advantage.