Christian Fea - Collaboration Marketing Strategist

When you start thinking strategic partnerships, think about what you don’t have that you need to move your business to the next level. For instance, if you’ve developed a unique product, but lack a mass distribution system, what companies would have a distribution system that could be utilized to get your product into the hands of the masses? You may need to give up a bit of your revenue per sale, but when you weigh that against the time and money it would take to build your own distribution system, you will most likely decide that it is a small price to pay.

Protect yourself and your ideas

Before you approach a larger company about a strategic partnership, make sure you’ve thought ahead and protected yourself and your product with the necessary patents, trademarks, and non-disclosure agreements. This is an important and necessary step for you to take. There is more than one tale of woe of an unsuspecting entrepreneur sharing an idea or product prototype only to see it on the market a few months later. Your attorney can help you draw up the necessary paperwork.

Research pays off

Make sure you research your potential strategic partner ahead of time. Find out all you can about the company. Study their offerings and determine if your product is a good addition or improvement to their current offerings. Ask people in the industry what they know about the company. A company with a reputation for treating strategic partners poorly in more than one instance is most likely a company to be avoided. On the flip side, a company with a track record for treating their partners fairly can be a great find. You want to partner with a company that has a great reputation, because you’re tying your reputation to theirs.

Plan for contingencies

Once you’ve decided to work together, think ahead to the “what ifs” of your agreement. What if things don’t work out as you planned? When you draw up your agreement, make sure that you have an “out” clause, just in case. Perhaps you’ll want to run a trial period to see how many units of your product your new partner can actually move, or how well they are able to fulfill orders. By putting a time-line or quantifying number in your contract, you’ll be better able to gauge whether the partnership is working how you had hoped or not. If not, you can move on in your search for a new strategic partner.

Long-term relations

When looking at a potential strategic partner, you should take into consideration your future product offerings. Look ahead to what you want to accomplish as a company. Before you form your strategic alliance, know where you want to go with your company. Think ahead to the possibilities. Will your potential partner be able to help distribute other products into the marketplace? While you don’t need to lay all your cards on the table when you’re forming a strategic alliance, look for the strongest possible strategic partner so that you can work towards to developing a long-term working relationship once you’ve made it through an initial project or two.

Before you enter into a strategic alliance, it is a good idea to decide what it is you hope to see happen as a result of the relationship.  Most strategic alliances have one main mission: to increase sales in such a way that both companies benefit.  You’ve no doubt heard the phrase, “There’s more than one way to skin a cat.”  Well, there’s more than one way to approach a strategic alliance, but there are a few things to consider before you rush headlong into the relationship.

First, outline a business plan specifically for the strategic alliance.  It doesn’t have to be extremely detailed, but it should create a clear picture that outlines the functions of the participants, the expected contributions from each party, and the anticipated benefits.  Do some research to determine if the alliance you dream of is actually feasible in dollars and cents.

Next, learn all you can about the company you plan to approach.  It doesn’t hurt to have a list of candidate companies for your proposed alliance.  Think of it as interviewing to fill an executive position in your company.  You don’t just want anyone in a high level position.  You want someone who can get the job done.  You may need to interview a couple “candidates” before you find the right fit.

Once you’ve found the right company, you need to find the decision maker within the company to whom you can present your concept.  Sometimes finding a contact within the sales or marketing department to help steer you in the right direction can save you some time and energy.  Or you can simply pick up the phone and try working your way through the corporate jungle by asking, “Who would the decision maker be regarding ____.” (Then, name whatever your project is.)

After you’ve located your contact person, submit a concise proposal.  Explain exactly how the alliance will benefit both parties and if you can, include a financial projection in a spreadsheet format.  Companies are always interested in the bottom line.  Show them the potential profit.

When you’ve secured interest, create a simple contract that lines out who does what, how the money flows, and what the disbursement terms will be.  You want to make sure that everyone understands the role that they play so that there are no surprises.  Follow your gut.  You may think a company would make a great strategic partner, but if your outlook or culture is not the same, you wish you’d never joined forces.

You can create a clause in your contract that states you are going to start small or for a certain amount to time to test the concept.  That way, if personalities or cultures don’t mesh, each of the parties is free to go with no harm done.  However, if things work well, you have a contract in place that will allow you to move full speed ahead when the time is right.

With the fallout of the mortgage industry and smattering of the housing market, consumers are indeed shutting their wallets closed – and retailers are feeling the pinch.

As the indicators of an economic recession loom on the 2008 horizon, many people have asked me how they can continue to grow their sales.  With the economic hot streak of the last five years, consumers spent in over-exuberance, and the question now remains: how can you grow your business amidst a potential recession?

The answer is, my friend, through drumming up strategic alliances.  With marketing budgets limited by the potential flat line of growth in revenues, strategic alliances offer an instant way to increase your market share – without high advertising and PPC costs.  This translates into potentially higher revenues for you, while you enjoy lower operating costs.

Sounds great?  Well, keep in mind that not all strategic alliances live happily ever after.  In fact, it is important to conduct a thorough examination of your potential partner, and there are several characteristics to look for when you are conducting a strategic alliance line-up:

1.     Reputation.  Considered one of the most important factors of a strategic alliance, how is your potential partner’s reputation?  The last thing you want to do is get in bed with a company whose reputation is less than par – as this can damage your long-term public image.

2.    Client relations.  Continuing the thought, with a less than stellar reputation, the company most likely does not have a good rapport with their clients, defeating the fundamental purpose of a strategic alliance.  The only way a strategic alliance is effective is if your partner has a trusting, reliable, and credible relationship with their customers.

3.    Synergistic business models.  Finding a company that is synergistic to your goals is critical to developing a strong strategic alliance.  Would their customer base be interested in your product or service, and vice-versa?  If you are selling wedding dresses, but decide to partner with a dedicated web hosting company, this clearly does not have the same synergies as a partnership with an invitation printing company.

4.     Price point.  An ideal strategic alliance partner shares similar price points with your product or service.  This further confirms the synergies between both your businesses.  If your company sells adware software for $100, then you would want to partner with an anti-virus software company that sells their product in the similar price range – not for $15 or $300.

5.    X factor.  Even if all of the numerical and financial aspects of the strategic alliance are in good order, it is important to ensure that the human factors – or the X factor – are in place.  Indeed, it is the human management relations of the other company that will determine whether or not the alliance will be successful.  If your potential partner is difficult to communicate with, then that element negates all of the other financial factors.   They must have an open mind, be flexible, and communicate effectively to be a candidate for a strategic alliance.

Benefiting from a strategic alliance is easy, but finding the right partner is the difficult part.  Once you have passed a potential partner through the line-up, however, the probability that your strategic alliance will be economically fruitful increases significantly.

Joint ventures are no longer reserved only for the powerful Fortune 500 companies. With the advent of the internet, both small and medium businesses alike can benefit from this powerful business strategy. The types of joint venture marketing partnerships you create are only limited by your imagination, and every industry has different dynamics that should be accounted for when creating the partnership. With that said, I have compiled three very effective joint venture marketing strategies that can take your business to the next level of earnings.

1. Utilize cross-promotion strategies with a synergistic client base.

As a traditional model of joint venture marketing, cross-promotion still reigns powerful as a strategy to increase your market share. Without having to spend any additional monies, you can instantly gain an exponentially larger client base simply by partnering with a business that has customer synergies. In addition, these synergies may not always be in the most obvious places – and some of the most powerful partnerships have come from creative thinking. For example, while a baby products website may not have obvious synergies with an electronics website, this could be a very successful joint venture partnership. Considering that research shows that women do the vast majority of shopping in the household, they are looking for both products for their babies – and their husbands. Thus, although the two products do not seem synergistic, the target audience certainly is.

2. Create an affiliate program.

Would you like an instant, powerful sales force – without any of the salary costs? By instituting an affiliate program, you do not risk any upfront costs, but instead gain a powerful sales force that can bring in customers outside of your typical marketing reach. However, it is important to keep in mind that if you do create an affiliate program that you provide your affiliates with the proper support. If they have questions or need samples of copy, make sure you can support your network of affiliates – and they will return your efforts twofold with increased revenues and market exposure to your business.

3. Create lead generating incentives.

Human psychology is triggered through incentives – which is why the big box retailers push Black Friday’s great sales as an incentive to get consumers in the holiday shopping spirit. Joint venture marketing strategies also need to employ the same psychological strategy. Provide incentives for your affiliates and partners to use, which will generate leads. For example, whenever an individual signs up for your newsletter, they get a bonus eBook filled with valuable information. Or, if they order through your affiliate within the next 24 hours, they enjoy free shipping. These incentives will turn leads into closed sales, and everyone benefits.

Joint ventures are one of the most powerful marketing strategies – yet it costs nothing for you to implement. You do not have to pay for hefty ad space, PPC dollars, or expensive sales staff salary. Instead, simply by harnessing the power of joint ventures, you can significantly boost the effectiveness of your marketing exposure.

In a momentous industry first, five university presses have joined together in a strategic alliance in order to address the changing dynamics in the scholastic publication industry. Demonstrating the power of strategic alliances, even in overcoming industry challenges, the collaboration brings together the resources of these five publication houses.

Strategic alliance controls costs

The academic publishing industry has demonstrated increased interest in collaborative models. Considering that some academic books and monographs have a very small, niche target audience, along with the lack of growth in library budgets, the business models behind university presses have been threatened. Subsequently, less academic books are reaching publication, especially when it comes to new academic scholars.

By joining together their efforts, the university presses’ strategic alliance will be able to alter the daunting costs traditionally associated with publication. By controlling the costs through their collaboration, this strategic alliance may pave the way for strategic alliances in other publication efforts.

Collaboration leads to greater academic strides

Funded by the Andrew W. Mellon Foundation, this strategic alliance utilizes collaboration models to ensure that university publication becomes more economically fruitful. Collaborating together on the editing, layout design, and typesetting, the five university presses will be able to publish five more books each annually. Therefore, within five years, 125 additional books will be published – giving the public 125 more books that otherwise would never have made it through publication. Considering that most university presses consider publishing one or two new books a year, having the ability to publish five is a tremendous increase.

According to Stephen Maikowski, the director of NYU Press, the strategic alliance will overcome the economic hurdles in certain topics. For publications that are intellectually important, but that do not present economic viability, this collaboration ensures that critical academic topics still achieve noteworthy exposure.

The power of strategic alliances can be applied to all industries, ranging from academic publications to software ventures. By utilizing creative collaboration processes, companies can expand the economic pie, as well as overcome any traditional economic scaling obstacles.

Undoubtedly, the power of a successful strategic alliance is exponential for both parties involved.  The key word here is successful.  Utilized properly, a strategic alliance takes revenues to the next level, but if the underlying fundamentals of a strategic alliance are not in line – then neither party will benefit.

There are several underlying fundamentals that determine the success of a strategic alliance:

•    Generating value:  To make a strategic alliance prosperous, it is important that what you “bring to the table” is valuable.  Your partnership offer should be valuable to both yourself and your potential partner.  In addition, the second underlying value factor of the offer for the partner’s clients.  This will generate sales from the partner’s customer base, which translates to profits to both your partner and yourself.
•    Appropriate attitude: Remember, you deliver significant value to the strategic alliance.  Without having to increase their production or staffing, your potential partner potentially stands to gain significant increase in revenues – all from your partnership.  Thus, instead of approaching the proposal with trepidation, arrive with confidence and power.
•    Cohesive partnership:  Even if the two companies have potential synergies, the commitment behind the strategic alliance must be present to reap the full rewards.  It is important to ensure that the personal and management dynamics can create a cohesive partnership, where both businesses fully support the joint venture efforts.  If there are conflicts in the beginning, or you sense a reluctance, then this may not be a strategic alliance worth pursuing.
•    Targeted clients:  It is ideal for your partnership to have client synergies, but not all of their customers will be perfectly in line with your target audience.  Therefore, it is important to develop lists that are specifically targeted to your clientele, whether it is the discount shopping mom or high-tech bachelor.  Specify the demographic details of your client base and work with your partner to target those specifics.
•    Strategic management:  Like any business relationship, a strategic alliance must be managed and maintained properly.  Left alone, the partnership will not reach its highest profitability potential.  You should maintain regular communication with your partner, continuously re-evaluating the power of your offer.  The more effort you place into partnership management, the more rewards you will receive from the strategic alliance.

Remember, your strategic alliance is a relationship, and thus, you should expect negotiation, compromise, and maintenance.  However, once the underlying characteristics are in place, reaping the benefits of a strategic alliance is certainly worth the effort.

Fortune 500 companies, along with sole proprietorships alike, have demonstrated the inherent value and power of strategic alliance.  Strategic alliances allow you to instantly expand the value of the customer base.  However, the question still remains – how much is a strategic alliance really worth?

Before embarking on a strategic alliance endeavor, it is critical to calculate the costs and benefits of the partnership.  There are several factors to evaluate in determining the true value of the strategic alliance:

Customer value:  The most powerful part of a strategic alliance is gaining an instant, new customer base, which you may not have been able to tap into previously.  What value does your potential partner’s customer base have for your company’s services and products?  Could you reach these customers through other marketing avenues?  Are there specific synergies that would allow you to fully capitalize upon your partner’s loyal customers?  How many of those customers would be a converted sale for your company, and are the purchases sustainable over both the short and long term?

Calculating the costs:  What are the tangible costs associated with implementing the strategic alliance?  This would include building new web pages, links, advertising campaigns, administrative tasks – as well as the cost of your time in developing and managing the relationship.

Defining your profit margins:  Although an increase in sales will certainly be a benefit, how much of your profit margin remains after the costs or commissions of the strategic alliance?  It is importance to calculate what your true profit margin is and compare it to your anticipated increase in overall corporate revenues.

For every business transaction, there is a cost that is inherently built into the value of the end-product.  Strategic alliances are no different.  The value that you will gain with a strategic alliance comes at a cost – and it is critical that you calculate the true benefit to your bottom line before engaging into a fruitful partnership.

The power of collaboration marketing continues to certainly gain steam.  Recently, Microsoft and CAE announced their marketing collaboration strategy, specifically targeted towards the audience of defense, homeland security, and public safety.

This is a powerful synergistic relationship that will let both brands capitalize on the resources and reputation of its partner.  Microsoft, as we all know, is the ultimate powerhouse in both business and consumer operating systems – but what is its track record for software related to defense?  This is where CAE enters the picture.  CAE is the international forerunner in developing simulation and training software for the defense industries.

By combining the software giant of the world with the civil defense simulation leader, this marketing collaboration relationship allows both companies to take their businesses one step higher – especially in revenues.  Sharing services, products, and specialist knowledge, CAE and Microsoft will utilize each others resources and reputation to create solutions – and marketing strategies – for the defense industries.  This gives both companies a broader and more profitable reach into the niche industry.

For both CAE and Microsoft, they can penetrate into new markets through new software solutions and distribution channels.  Without each other, the upward growth of the two companies would have been limited in the sector, but capitalizing upon their strengths, they can both achieve significantly more than individual efforts.

The marketing collaboration relationship between Microsoft and CAE is an excellent example of how significantly partnerships can contribute to a company’s growth.  Collaboration marketing increases the revenues pie for both parties involved, allowing each company to have a great slice of profits.

One is the loneliest number in the world – and the statement holds true especially when it comes to business. Considering the vast nooks and crannies where your target audience hides, it is difficult for one company, one marketing strategy, one budget, and one outreach effort to capitalize upon the full spectrum of your potential clients.

Bottom-line benefits with strategic alliances

With the power of strong strategic alliances, your business can significantly increase its revenues, while simultaneously declining your costs. Strategic alliances’ effectiveness stems from the value of collective resources; for example, two companies share the cost of a research study – both obtain the same benefit, but at half the original cost.

The greatest advantage to a strategic alliance, however, is the exponentially increased number of clients you can reach – take your business to the second power, and now imagine how much revenue your business can generate with the third power, fourth power, and beyond.

With a properly created strategic alliance, you can expect to gain:

• Instant exposure to a greater target audience and client base
• Double your sales force for your products virtually overnight
• Reduce your marketing expense, with an increase in client reach
• Increase your virtual inventory and product offerings
• Boost the levels of your sales volume, revenues, and profit
• Augment the levels of knowledge and expertise with information exchange

Successfully managing a strategic alliance

The benefits to developing a strategic alliance run deep, but like any aspect of business, it requires planning and management. An improperly executed strategic partnership will be doomed to fail from the beginning. Like any relationship, a strategic partnerships needs management, communication, and trust.

There are several aspects to keep in mind when you are forging a strategic alliance partnership with another organization:

• Your strategic alliance should be formed with a complimentary company – not a competitor, but a business with positive synergies. For example, if you sell pet products, a great strategic alliance would be with a provider of pet health insurance.

• The alliance must be managed effectively from the beginning, meaning expectations, boundaries, and definitions are outlined clearly. If there are any gray areas in the strategic alliance, both parties will walk away unhappy. In a strategic alliance, it is impossible to be too clear about expectations.

• Communication lines must be constantly open and clear. A strategic alliance is more than an additional marketing force – instead, it is a conglomeration of resources and knowledge; when used effectively, a strategic alliance raises the bar for both businesses. In addition, open communication ensures that the strategic alliance is operating in its healthiest capacity.

• A strong level of trust must be fostered with both formal and informal contracts. A strategic alliance is like any other relationship – to succeed, trust must be developed. The easiest way to build trust in a nascent business relationship is to create definitive contracts and terms.

Strategic alliances can be an important tool in your company’s marketing toolbox. Without having to exert additional marketing budgets, you can essentially double your company’s exposure, resulting in higher revenues and profits. With proper management, a strategic alliance can often become a company’s catalyst for reaching the next level of business success.

How much “work” do you do yourself? How much time, money, and market share are you loosing by figuring everything out for yourself instead of using other recourses that can move you towards profitability in a fraction of the time? If you write down everything you do by yourself during your work days for the next 7 days, I guarantee you’ll be shocked at all the time you waste on “figuring it out” instead of “getting it done”. Please don’t confuse the illusion of productivity simply because your busy.

By using a Collaboration Marketing Strategy, you can operate in Parallel Streams of Productivity. This means you can, in all practicality, double, triple, or quadruple your profit enhancing activities by exercising a fraction of the time, effort, and money that your most likely exerting today.

Here’s an idea that could multiply your sales by a factor of 2x in less then 30 days. Write down the top 3 things you think you need to do to get your idea, project, or goal to the next level. For example, if your objective is to get more prospects to call you for your services. Think about who else has an existing relationship with the highest probability purchaser that would also be interested in your laterally related product or service. If you offer a Blog setup service for $149, you could collaborate with a Graphic Designer (there are tens of thousands of them out there) and offer a $49 referral fee to the designer as an up-sale that they do for you (Parallel Stream #1) to all their clients that they create logos, web sites, headers, and web based videos for. The key here is practical application of the Parallel Stream Concept. Once you get this Parallel system in place with one other Collaboration Actor you can repeat this process over and over. Now your productivity can increase dramatically while you apply another Parallel Stream to another Collaboration Actor. In this case a Graphic Designer, but how about an Illustrator, a Video Editor, or a PC/MAC repair service. Your choices really are only limited by your inactions.