Strategic
Alliances - Partnering for Success
The concept of a strategic alliance, or joint venture is
certainly not new.
Formerly the domain of large multinationals, airlines, hotel
chains, oil companies and car manufacturers, just to site a few
examples, the option to partner with other people and
organisations to provide a better outcome or experience for the
sake of your customer, is now becoming increasingly popular
amoungst smaller to medium enterprises.
Both online and offline business can benefit.
Example of Strategic Alliance at Work
The principals at play are very simple, even though the
permetations of how alliances or joint ventures can be
structured and made up can indeed be complex and the
combinations available to us are almost
infinite.
As a simple example, say you have an existing customer
database. Perhaps you run a plumbing business and have over the
past ten years accumulated several thousand customers in your
accounting system / contact database. Most of those contacts
are never ever made use of - unless they have a problem
and need your services.
However, they may actually love you. They might think your
plumbing business is the best in town. None the less, they only
call when they need a plumber. Which may be once a year, if
your lucky.
This list is a huge asset - that is untouched and is based
on based experience, your past performance and trust.
Sure, maybe you are a good operator and send out a monthly
newsletter, give them incentives like discount voucers once or
twice a year to allow them to spend more frequently with
you.
But, imagine if you had a friend, that you trusted that ran
say a carpet cleaning business as an example. He's a great
operator and does good work - (and it could be any number of
other complimentary but non competitive businesses), he has a
customer list to, but not as large as yours. So here's one way
a strategic alliance could work.
1. Collectively you work out a marketing offer that
historically has worked well for his cleaning business and he
knows is profitable for him - lets say it's a $500 discount on
a total house carpet cleaning package. The value of the
discounted service is now $2000 for instance and for
simplicities sake.
2. Lets say for each job as above he makes $1000 net
profit.
3. You both agree for access to your customer list, that you
share the profit for each sale 50/50
(Remember he's getting work from a customer list that trusts
you and he would not normally have ever been exposed to - and
he has not had to advertise)
4. You craft a marketing piece, usually just an email,
whereby you endorse his services and attach a voucher for
the $500 discount. Your customers know you, appreciate the
fact that you are saving them money on a service they may well
of used anyway and as such, depending on the offer, these
offers can convert at anywhere between 10 - 30% and higher
numbers have been known.
5. Lastly, and this is important, there is one more follow
up email to reinforce the value of the offer and to place a
time limit on its ability to be redeemed. That email should
normally be sent say 3 days after the first.
Lets Look at The Math
Let's say the plumbing business has 3000 contacts within its
database.
Let's be really conservative and say only 5% of people that
recieve both of those offer emails redeem their vouchers.
That would mean 3000 x 5% = 150 people spend $2000, so you
generate $300,000 worth of revenue for your carpet cleaner
friend and you both share 50% of $150,000 in profit - in short
you both pocket $75,000 for what is probably less than an
afternoons work in constructing the offer and creating the
emails.
It is a very simple model that is proving very popular
in the US at the moment and given the tightness in the economy
is one of the smartest ways and fastest ways to generate more
revenue and profitability into any
business.
Sound like foey? Peter
Drucker - regarded as many as the greatest business
management thinker of the last century said this of
Strategic Alliances;
"Businesses once grew by one of two ways; grass roots up, or
by acquisition... Today businesses grow through
alliances..... Joint ventures and customer partnerings
which, by the way, very few people understand."
Peter F. Drucker
He's also more famously known for the following quote;
“Marketing and innovation produce results; all the rest are
costs. Marketing is the distinguishing, unique function of the
business."
Peter Drucker
For the past 23 years I have been on the forefront of
innovation in information technology and business management,
today I'm excited about being able to share proven, cost
effective, performance based marketing stategies to help
businesses grow and succeed.
If your interested in learning more about Strategic
Alliances and how to double your business profitability in the
next 90 Days, fill in the form below.
To contact us directly about how to establish Strategic
Alliances to help your online or offline business email me
directly on
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