Uncover New Business with Strategic Alliances
In the constant search to uncover new business in financial sales or professional services, we often overlook the most obvious: strategic alliances. In 30 years of business, I’ve benefited from and been hurt by strategic alliances; however, there’s always a valuable lesson tucked into the experience.
Let’s focus first on the positives. When you’re a small to mid-size firm in a niche market, strategic alliances can bring credibility to your firm, and place you in front of ideal clients under favorable conditions. If you’re a large organization, but lack resources in a key area of expertise, bonding with a niche player offers you a way to enter a new market and tap new business.
In the ideal alliance, each partner brings value to the relationship: talent and expertise, market knowledge, or client relationships where trust already exists. In these ways, both strategic partners gain expanded ability to leverage off the other.
Wall Street Hook Up
Years ago I developed a relationship with a major, very successful Wall Street firm, which brought its national brand, client relationships and quality reputation to our alliance. Because the firm already had relationships with clients who we thought ideal, but did not wish to invest in entering our market, forming an alliance with our firm made sound business sense.
We brought our niche knowledge and strategic marketing to the Wall Street leader, as well as the services needed to support its clients. Together, we co-branded our approach and, as a result, we acquired national recognition as its go-to-firm, which further raised our market image and credibility.
Law firms, accounting firms, financial advisors, retirement specialists all share common linkage to a valuable alliance. Common themes tax planning, wealth accumulation, and retirement planning.
The best alliances come from joining forces with firms whose specialties are similar to your own. And if they call on the same decision makers, you’ll make an even stronger marriage.
Here’s a perfect example of a strong alliance accomplishing a win-win: A retirement advisor who sells 401(k) qualified plans works with a wealth management group who brings financial counseling to senior executives and owners. The clients served are likely to purchase similar investment products for their personal benefit, and the process selling is 100 percent complementary.
What Doesn’t Work
First, where the product or services do not line up, an alliance falters. Imagine the outcome if the retirement advisor develops an alliance with a firm specializing in health and welfare plans. It may feel like a good fit because they’re both selling to the same companies, and dealing with the same decision makers. But these products and services do not complement each other. It’s not a natural fit. What’s more, there should always be reason for the strategic alliance from the client perspective, other than lead generation.
The second area of concern arises when a potential partner also sells your products and services directly to the end client. If the partner provides servicing and technical resources to support your client, where does your value come from? The prospect can simply go direct.
Be careful here because you could inadvertently develop your biggest competitor if the partner decides to take his relationships direct. Finally, if your partner isn’t willing to co-brand your offering, and communicate to the world your relationship, it’s a warning sign. Stop and turn around.
Another reason why alliances do not work, if your potential partner already maintains a number of relationships with firms like yours, and you’re simply one of many. You need a win-win relationship, and if the potential partner uses his capabilities to help many, his firm is not a strategic partner.
A Last Word
Be sure to clearly and thoroughly document all your strategic alliances. Begin with the end in mind. What happens to shared clients, business intelligence, or marketing and sales strategies, if and when you unwind the alliance?
Perhaps the worst lesson I learned from my forays into strategic alliances. Breaking up is not only hard to do, it costs an unutterable fortune.
See you on the upside,