Alan Gayle is a sales and marketing consultant specialising in the construction industry. In this column he offers advice on how to make an impact in the market. This time he looks at strategic alliances.
Following the previous series of articles on ‘up-selling’ and ‘diversification’ for business growth, the final piece in this puzzle is ‘strategic alliances’.
So what is a strategic alliance? The definition, according to the website 1000ventures.com, which has a treasure trove of useful information for business growth, is: “When two or more businesses join together for a set period of time. The businesses, usually, are not in direct competition, but have similar products or services that are directed toward the same target audience.”
Strategic alliances are a hot topic in construction marketing forums and at construction networking events.
As we all know, the construction industry has a well-established tradition of subcontracting, so joining forces with companies that can increase the range of products or services you offer with minimum investment and, if you choose your partners carefully, minimum risk, can be more straightforward than in most other industries.
Of course, the arrangement has to be profitable for both parties and it makes sense to formalise the arrangement before you work together.
But, unlike a consortium, a strategic alliance doesn’t have to be based on an official contract. It could be as simple as agreeing to introduce one another’s products or services to your existing client base.
One of my clients is a fit-out contractor. He has developed a mutually profitable alliance with an office furniture supplier. When the fit-out contractor gets a suitable enquiry, he offers to supply furniture from his partner’s range. When the furniture supplier gets a suitable enquiry he offers the services of the fit-out contractor.
It makes sense because fit-out work and new office furniture often go hand in hand on the same project and they both have existing clients that are happy to let them price for additional work.
In my own business I have informal strategic alliances with a web designer, a graphic designer, a printer, a photographer and a market researcher. I’ve brought work to all of them and at some stage they’ve all brought work to me.
In fact, the fit-out company that I mentioned was originally a client of the web designer I work with. When they needed architectural photography, copy-writing and case studies for their new website, the web designer set up a meeting for me to meet his client and I got the work. Simple.
The web designer did his bit, I did my bit and we both made money from the project. The client was happy because he didn’t have to find, brief and co-ordinate a photographer and copy writer to provide the content for his website.
Could a strategic alliance help to grow your business? You could find, like many others, that your best clients would be happy to buy additional products and services from you. Sometimes all you have to do is ask.
To find out more, use the following web link to read the article ‘Strategic Alliances – Why and How To Build Them’.
www.1000ventures.com/business_guide/strategic_alliances_main.html