If you’re a business owner or manager, I probably don’t need to tell you just how important a strategic business alliance, or partnership, can be to your overall success. Over the years, I’ve seen many businesses enjoy great success through smart alliances, and in my own business, alliances have been key. However, every now and then I encounter a business that isn’t sure if partnering would be helpful, or just can’t see what type of alliance could benefit their particular business.
If this sounds familiar, consider the following illustrations of some smart alliances in action. Take a look at the reflection questions with your team and allow these examples to inspire some creative partnership ideas in your own business.
The Volkswagen Fender Alliance
Earlier this year, Volkswagen put together a concept car, partnering with renowned guitar company, Fender, to create the Fender edition Beetle. This concept had an iPod dock set into amp-like mesh, a tube amp, sunburst-patterned wood trim and a trunk-mounted sub you could plug your guitar into. Yes, it was an over-the-top concept but it was also a HUGE hit with both the general public and the media. The production version of this car will be coming soon, demonstrating that sometimes, merging together two great brands has the potential for even greater brand awareness and sales.
Question to ask yourself: What complementary companies or brands could you partner with to strengthen brand awareness, credibility and potential sales for both businesses? This could mean a campaign, product launch or even an event of some type.
The ‘Freemium’ and Sponsorship Alliance
It’s important to look at alliances as an opportunity for and investment in, increased brand presence. A great example of this is Coca Cola’s relationship with Disney. Coke gives free product to Disney parks to ensure that it’s the only choice for Disney visitors. In the US, many beer companies sell beer to baseball parks at cost, giving up their profit margins in exchange for valuable access to the affiliated marketing and brand opportunities.
Sponsorship is another route. Many brands sponsor events or activities that give them opportunities to connect with their target audience in more meaningful ways. For example, Mountain Equipment Coop is known to sponsor many outdoor sporting events that in turn allow them to build brand presence and increase their market size.
When it comes to either a ‘freemium’ or sponsorship-based alliance, there may be an initial investment, not unlike advertising, but these have great potential for success.
Question to ask yourself: What events or activities could you potentially sponsor in order to connect with and grow your target audience? Are there events you could provide free products or services to, with the same objective? With any sponsorship, you’ll need to be wise about crafting an agreement that gives your business and brand maximum exposure.
The Intel Alliance
Of course, stronger branding isn’t the only benefit of a strategic alliance. Alliances can also provide two companies with exclusive rights and inside Intel. Consider Netflix, obviously not a small company, yet it decided to rent its servers from Amazon, rather than building and maintaining its own servers.
This alliance provides both companies with large teams that exclusively work with each other. Key benefits to Netflix include bargaining power when negotiating rates and the ability to direct Amazon on improvements it wants done. Amazon uses the improvements made for Netflix (as well as all server and software testing Netflix does for itself) to improve the Amazon business and provide new services to its customers. It’s a massive win win.
Question to ask yourself: What businesses could you partner with to both provide and gain access to valuable Intel?
Here at Wardell, our approach has been to create strong alliances with partner firms that can help us reach a broader network of customers. For example, this past year we’ve partnered with the International Business Brokers Association (IBBA) to provide consulting services to its members’ clients across North America helping us reach more clients and them to make the clients they do have more successful. We’ve partnered with similar business networks in other countries with the same objective.
Ready to consider new alliances for your business? Start by asking yourself the questions above via a team brainstorm and then take a look at what some of your famous counterparts are doing. Chances are, a breakthrough business alliance for your company is only a great idea away.