Strategic Alliance Marketing Ideas For Joint Ventures for USA - Canada Market Dominance

How secure is your business? You've probably read the commonly quoted statistic that 96 percent of new businesses fail in the first five years, haven't you. Do you believe that? Have you ever done any research on the acccuracy of that rumor?

Do you truly believe that you only have a 4 percent chance of succeeding in business beyond five year? Man, that's a depressing number; but is it true? If it is, why do so many people even bother, with the odds stacked against them so heavily?

According to the US Small Business Administration, the truth is that about 54 percent of new businesses will not exist five years after they start. But that doesn't necessarily mean that they have failed. Many of them will have merged with other companies or will have been purchased, or undergone a name change.

Many others will have outlived their purpose. A company may be opened to serve a specific event or marketplace that is temporary.

That's right -- business people fail, not businesses. It's the people running those businesses who fail. The burning question then is, "How do you make sure that you will be among the 46 percent who are successful five years from now?".

First, let's take inventory. You've got great products that deliver an excellent service at an attractive price, right? Great! And you've identified a niche in the market and created a unique selling position which will allow you to dominate your niche, yes? Of course, your company has assembled some of the best people ever brought together in any organization, hasn't it? That goes without saying. So that gives you four major components of success. With all of those factors in place, how can you possibly ever fail?

The fifth element of becoming a company (and in fact, a business person) that outperforms and outlives the competition, is the one where most people fall short. It is the simple concept of trying to do too much yourself. Hey, why do you think it's called a "company". It suggests that you have companions. Yet they don't have to be co-owners. Instead, it may be better if they are strategic alliance partners.

People, price, position, product and promotion.

Famous last words: "We don't need strategic alliance partners or promotion. Everyone knows us already."

People, price, position, product and promotion. That's what Woolco thought. Who? Exactly! That's what thousands of business operators still think -- that everyone who knows them will become their customer. Now you're probably thinking that you would never be that dumb to believe that people are going to deal with you just because they know you. But guess what? Just because lots of people have heard of you, that's not enough to get them to think of you, or to consider you, when the time comes for them to invest in the products or services you supply? So what do most business operators do to create what Madison Avenue advertising mavens call Top Of Mind Awareness? That's right, they advertise. And does advertising work? Be honest now? The typical North American adult is assaulted by an average of 173 advertisements per day. Guess how many of those ads that same person can recall at the end of the day? Four. Does advertising pay? You bet it does? Just ask any advertising sales executive.

Smart companies are waking up to the reality that there's simply too much advertising for ther ads to do an effective job of bringing in a steady stream of prospects and customers. Instead, some of the brightest leaders are creating strategic alliances in order to increase market share or the perceived marketing strength of their products and services.

It makes economic sense to build relationships by partnering with organizations that share your view of your marketplace and that target the same customers as you do. Strategic alliances, or joint ventures, may also enable both parties to access previously untapped market segments by giving the customer a one-stop-shop solution for their needs.

The problem with some strategic alliance agreements is that they leave one or both parties disappointed in the results. This is often because the strategic alliance itself is not established properly. Properly set up, a good strategic alliance can help leverage business and build stronger relationships with customers. This article is aimed at helping you develop, measure, and nurture your building of strategic alliance partnerships to increase your success.

What exactly is a strategic alliance?

For small business operators, we define a strategic alliance as an agreement to utilize the strengths of two or more companies (the strategy) to build a bridge for customers to benefit (the end) through mutual partnership (the perceived alliance).

Strategic malliance marketing plans can build your business portfolio fast. A winning strategic alliance creates a win for Company A, a win for Company B, and a win for the customers of both companies in the alliance.

A strategic alliance may be a consortium that is composed of several enterprises, but for our purposes we will examine a strategic alliance between just two organizations.

As you approach other business operators about creating a strategic alliance, maintain a positive attitude and try to give the impression that you are truly comitted to the pursuit of your craft.

Perception is powerful, so make sure you know what you expect of your new ally before you start talking. This initial phase will set the tone of the entire relationship.

Successful alliances are usually comprised of the following features:

1. Clear benefits to both strategic alliance partners.

2. Both strategic alliance partners increase the sale of (defined) products and services.

3. Customers can clearly see who handles what (to eliminate confusion).

4. Both strategic alliance partners increase their visibility and strengthen the name of their company by forming the alliance.

5. The strategic alliance represents a revenue flow to both companies that would not otherwise occur.

6. The strategic alliance reduces the ratio of Marketing Cost to Revenue for both participants.

No Hocus Pocus. Just Focus.

In managing a strategic alliance relationship, you will need to focus on companies which can deliver a clear benefit to your company. They should provide strengths where you may be weak, and your company should provide strengths where they may be vulnerable. For example, a mortgage provider can help homeowners uncover large amounts of cash from within their home equity, while simultaneously lowering the homeowner's monthly mortgage payment and eliminating their debts.

No hocus pocus, just focus on strategic alliance partnetships. This ability can create a major advantage for any company that deals in big ticket items such as home renovations, automobiles, RV's, vacation packages, or cottages. In effect, it offers the company that provides such investments with a big advantage over its competitors; that is, the ability to offer their customers a way to buy what they sell with no out-of-pocket expense.

The result will be that these people will become customers for life of the company that introduced them to the home equity loan program, and will tell all their friends and neighbours of how their home equity enabled them to buy new windows or a roof, or a new car, or a dream vacation.

Be careful in setting up your strategic alliance agreements (remember Rule #3 - the customer must be able to clearly see who handles what. It is important to have clearly defined processes for implementation, as well as account management (from both parties) to create successful strategic alliances.

Another challenge in strategic alliances is to define how much revenue will result and how soon it will occur. This is the primary problem with strategic alliances that fall apart. The breakdown often occurs because Company A over-promises their own customers on the benefits that the customer will derive from Company B. Other times, one Company fails to comply with the agreed-upon rules of their strategic alliance. This causes mistrust between the strategic alliance partners. A few mishandled leads or referrals by Company A can leave Company B disillusioned with Company A's ability to support their customers. This results in a decline in future referrals. Soon, the strategic alliance is dead.

A good way to resolve this challenge is to establish defined measurement of success, and to monitor the results that both parties are achieving as a result of their strategic alliance. You must also recognize potential trouble spots and then take corrective action. It is also highly important to establish the financial aspect of the strategic alliance, based on a scale of realistically achievable levels of volume. By writing all the terms down and agreeing on a fair exchange of compensation based on a scale, both sides will be protected.

For example, if a mortgage consultant agrees to compensate a strategic alliance partner by paying a particular amount for each lead, that amount must be agreed to and adhered to in order for the strategic alliance to prosper. Any bonuses must also be spelled out and understood by both parties, then tracked and the results discussed on a regular basis.

There is a method to create accountability within each respective company. The presence of the employee from Company A on the team of Company B builds synergy and removes the potential for mis-communication. It is also important to have regularly scheduled meetings, and maintain clear lines of communication so that surprises are minimized.

It has been said "an optimist and pessimist make the best partnership because one sees the profits while the other sees the risks".

So, the last key to building a successful strategic alliance is to make sure that both parties have a good understanding of what the other company actually does and how their business functions. That way, when a referral is made, it is with the knowledge and understanding of how the other company can help the client. Each party should sit through a presentation done by the person who they will be referring, so they can see and hear what their referred customers will see and hear. If there are any apprehensions, it's crucial that they are dealt with at the beginning. Otherwise, they can possibly undermine the entire strategic alliance at a later date.

Strategic alliances can be beneficial to your corporate image, if you team up with allies that have a solid reputation among their customers. So select your strategic alliance partners wisely.

To recap, in order to improve your strategic alliance success, make sure to have good answers for these seven questions:

Puzzle pieces building strategic alliance partnerships. 1. Is there clear benefit to both companies (financial, service/product, relationship)?

2. Is the relationship clearly defined for customers to understand?

3. Do your companies serve customers with similar profiles (for example: homeowners with at least 25% equity and good credit)?

4. Are you clear in assessing how much business you promise to deliver to one another?

5. Have you developed a plan for the success of the strategic alliance, and agreed on a method of measuring it?

6. Do you have clear and honest communication between partners? Are both parties committed to the management of implementation and continuous success of the relationship?

7. Is the image and success of the program being promoted by both partners?

Building a successful strategic alliance isn't easy, but it can add to the success and value of both companies. Use these seven steps to improve your future strategic alliance partnerships.

We can help you tap the niche markets you're seeking by helping you set up or improve your strategic alliance marketing approach or joint venture plans. Let's talk - the first hour is on us!

Call the Strategic Alliance Marketing Group now at 250-886-4411 (9 a.m.-9 p.m. PST) or email us at:

Building Strategic Alliance Agreements: How to structure your new strategic alliance agreement.

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