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Partners
Here are some of the strategies that I find to be most effective for building good alliances:
Defining the market
This is fundamentally important when it comes to any form of marketing. Failure to define the target market will result in failed marketing efforts. Who are the people most likely to buy a product or service? Thinking about an average customer in terms of age, sex, income, where they live and what their interests are gives partnering companies a much better idea of what they need and how those needs can be met.
Non-competitive partners
Strategic alliances tend to work in situations where there is a particular group of people a company wants to target and there are other non-competitive businesses already engaging with those customers. Working with non-competitive partners can give companies access to new markets without hampering their sales opportunities.
Partner companies should also be positioned at the same end of the price and quality spectrum – they need to share the same target market.
What’s on offer?
Partnering companies each have to bring something of value to the table for the partnership to be mutually beneficial and satisfying. Commission is a good basic option, where the company with access to the target market gets 10% of every sale made based on a referral from them. Or, if the referral will result in regular repeat business, the allied company could get more or even all of the profit from the first sale. This gives them incentive to refer clients.
Find a suitable system
There are many types of strategic partnerships that can be used and companies need to identify what works best for them. One option is the referral system mentioned above, where one or two businesses refer clients to each other. Or, companies could form a collective. This works well for people in a services industry where, for example, a graphic designer partners with a copywriter and a web developer to take on website projects together.
Another option is giving customers loyalty gifts sponsored or discounted by a partner company. That way, customers get a great offer, the company giving the gifts gains continued loyalty and the sponsor company gets new potential customers through their doors.
Partnerships are an excellent way for companies to build their customer base by leveraging shared value with similar but non-competitive companies.
* Harry Welby-Cooke is a leading business and executive coach and South Africa’s master licensee for global franchise company ActionCOACH.
