One is the loneliest number in the world â€“ and the statement holds true especially when it comes to business. Considering the vast nooks and crannies where your target audience hides, it is difficult for one company, one marketing strategy, one budget, and one outreach effort to capitalize upon the full spectrum of your potential clients.
Bottom-line benefits with strategic alliances
With the power of strong strategic alliances, your business can significantly increase its revenues, while simultaneously declining your costs. Strategic alliancesâ€™ effectiveness stems from the value of collective resources; for example, two companies share the cost of a research study â€“ both obtain the same benefit, but at half the original cost.
The greatest advantage to a strategic alliance, however, is the exponentially increased number of clients you can reach â€“ take your business to the second power, and now imagine how much revenue your business can generate with the third power, fourth power, and beyond.
With a properly created strategic alliance, you can expect to gain:
â€¢ Instant exposure to a greater target audience and client base
â€¢ Double your sales force for your products virtually overnight
â€¢ Reduce your marketing expense, with an increase in client reach
â€¢ Increase your virtual inventory and product offerings
â€¢ Boost the levels of your sales volume, revenues, and profit
â€¢ Augment the levels of knowledge and expertise with information exchange
Successfully managing a strategic alliance
The benefits to developing a strategic alliance run deep, but like any aspect of business, it requires planning and management. An improperly executed strategic partnership will be doomed to fail from the beginning. Like any relationship, a strategic partnerships needs management, communication, and trust.
There are several aspects to keep in mind when you are forging a strategic alliance partnership with another organization:
â€¢ Your strategic alliance should be formed with a complimentary company â€“ not a competitor, but a business with positive synergies. For example, if you sell pet products, a great strategic alliance would be with a provider of pet health insurance.
â€¢ The alliance must be managed effectively from the beginning, meaning expectations, boundaries, and definitions are outlined clearly. If there are any gray areas in the strategic alliance, both parties will walk away unhappy. In a strategic alliance, it is impossible to be too clear about expectations.
â€¢ Communication lines must be constantly open and clear. A strategic alliance is more than an additional marketing force â€“ instead, it is a conglomeration of resources and knowledge; when used effectively, a strategic alliance raises the bar for both businesses. In addition, open communication ensures that the strategic alliance is operating in its healthiest capacity.
â€¢ A strong level of trust must be fostered with both formal and informal contracts. A strategic alliance is like any other relationship â€“ to succeed, trust must be developed. The easiest way to build trust in a nascent business relationship is to create definitive contracts and terms.
Strategic alliances can be an important tool in your companyâ€™s marketing toolbox. Without having to exert additional marketing budgets, you can essentially double your companyâ€™s exposure, resulting in higher revenues and profits. With proper management, a strategic alliance can often become a companyâ€™s catalyst for reaching the next level of business success.