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