Strategic Business Alliances, are they worth it?

Strategic business alliances, Are they worth it?

When you’re looking to grow your business, one of the fastest and most effective ways of doing this is by focusing on building strategic business alliances. A strategic business alliance can improve both your profit and your reach within the market.

What do good strategic business alliances look like and how can you establish them? Some of the most lucrative strategic alliances may be made by leveraging off other businesses that offer services you don’t offer but complement the services you do offer.

An example of this might be: If you are a mechanic offering mechanical repair services, you could build a strategic business alliance with a panel beater or car detailing service.

In an alliance such as this, you would refer work between you, and your alliances’, services and by doing so be able to offer your customers a complete buying experience.

Another effective yet underutilized strategy by most businesses is to build strategic alliances with your direct competition.

I know what you’re thinking “Why would I want to help my competition?” to answer this question, you need to think abundance over scarcity.

What I mean by abundance over scarcity is that there are two main ways of thinking when it comes to market share.

Abundance is the idea that there is an abundance of customers and enough out there for every business to get their fair share.

Conversely, a mindset based on scarcity is one based on the notion there is only a select number of customers available and not enough for every business to get a slice of the proverbial pie.

The issue with having a mindset of scarcity is that these business owners tend to be on the defensive and focused on preservation as opposed to being proactive and focused on opportunity.

If you buy into the mindset of abundance, you allow yourself to explore strategic business alliances which your more cautious competitors won’t.

Let’s examine the mechanic scenario as an example.

Is it common for customers to walk into a mechanical workshop looking for a particular part or service? Yes, of course, it is.

However, with all the different car makes and models out on our roads today it would be impossible to have every part or provide all services, so when a paying customer walks into a mechanical workshop and requests a part for their car that this mechanic does not stock, the business owner must turn them away.

Let’s assume this mechanic is a BMW specialist and a customer was looking for a part for an Audi.

If the Audi mechanic across town had built a strategic business relationship with the BMW mechanic, the BMW mechanic could have sent the customer over to them as opposed to sending them back out into the free market where they could be picked up by any mechanic.

A situation such as this is an example of how building a strategic business alliance with a company who compliments your product or service would have been valuable.

What about a situation where a paying customer walks into the BMW mechanic looking for a part that they usually stock, but they have just sold out?

If another BMW mechanic in the next suburb over had built a strategic business alliance with this BMW mechanic then they could have sent their customer directly to them, as opposed to allowing them to go to search for any other BMW mechanic.

The simple fact is that your business will never be able to be all things for all customers and there will be times when you are out of a product or temporarily unable to offer your service.

Conversely, there will also be times when you will meet customers looking for a product or service you simply don’t offer.

If this is happening in your business, then it is also going on in the other businesses in your area.

By building strategic business alliances, it enables you to capture more customers and create an environment of good faith where new business and customers are being sent back to you.

So to answer the question of “are strategic business alliances worth it?”…The answer is a resounding YES!

About The Author

Marcus Jovanovich

Marcus Jovanovich is an expert when it comes to online conversion and lead generation. Having run several successful traditional ‘bricks & mortar’ and e-Commerce businesses over the past decade, Marcus is now a sought after business and marketing coach and mentor for those wanting to optimise and grow their businesses online by focus targeting all aspects of digital marketing. Today he and his team of business, marketing & design professionals help business from all over Australia grow their profits via effective marketing strategies.