In the world of marketing, Word of Mouth has great, well … word of mouth.
According to WOMMA (the Word of Mouth Marketing Association), word of mouth marketing is considered to be more effective than traditional marketing by 64% of marketers.
You may be thinking they would say that, wouldn’t they, but their survey is backed up by research from Nielsen that revealed 84% of us trust recommendations from people we know; and research from Market Share that found marketing impact can be increased by up to 54% by social voice (i.e. online & offline word of mouth).
The catch is, Word of Mouth isn’t easy to track and measure. And that makes Word of Mouth unreliable: you have no control over it, and it’s not always possible to know when Word of Mouth is being incredibly powerful and when it is not.
Clearly, relying solely on Word of Mouth would be a poor policy. Creating multiple marketing strategies makes much more sense, and a much more solid strategy than Word of Mouth, but one that uses the same principles, is referrals that come via your existing clients and your wider network.
And to make this strategy work, you need Strategic Alliances.
What is a Strategic Alliance?
Strategic Alliances are loose partnerships between non-competing businesses – legal documents are seldom involved – and by working together, they can add profit to each other’s bottom lines.
One of the most important things to remember about Strategic Alliances is that they involve patience. They’re not a quick fix. A Strategic Alliance is a long game; building an effective relationship takes time. It also involves regular contact and assessments to develop and refine the agreement.
Or put another way: each Strategic Alliance is a long-term strategy requiring regular short-term activity.
Also vital to making this long-term strategy work, is an appropriate approach; you want the mind-set of a giver. Don’t focus on what you’ll get from the relationship, think about what you can offer your alliance partner. Give first, before thinking about the way(s) your partner may be able to help you. This makes for an alliance where benefits will flow much more easily.
What makes a good Strategic Alliance partner?
Start by considering your customers and your clients: what other services do they need? Imagine your business is supplying marquees for weddings and other functions.
If you’re a business-to-business company (e.g. your clients are hotels or large corporates), your clients may be looking for caterers, live music and/or a DJ, coach hire etc.
If you’re a business-to-customer company (e.g. your clients are parents of brides-to-be) your clients may be looking for limousine hire, late-night taxis, hotel accommodation, hairdressers.
5 Features to look for in potential alliance partners
Having identified your potential partners, filter them using these criteria:
- Similar audience
- Access to new customers
- Will want to work with you
- Wants something you can offer
1. Similar audience
You should be looking for partners with a similar clientele. If your clients tend to be wealthy, look for partners who deal with wealthy individuals: eg financial advisors. But if you provide a low budget product then a bargain retailer may be a better fit.
The key is to add value, not compete. Two companies that hire out marquees are not going to promote each other’s business. However a marquee company and a mobile catering company would be a nice fit.
Your Strategic Alliance partners should be in the same Venn diagram, but your overlap should be minimal; ideally you serve the same audience with distinct services.
3. Access to customers/prospects
Look for potential partners who already have a database of clients/prospects, or a partner whose footfall is currently untapped. This audience, and the level of access you have to it will determine the value of the Strategic Alliance.
If your potential partner hasn’t created a database, you could offer to create this for them and to set up systems for them to communicate effectively with a number of prospects. In this way, your partnership will be of immediate value to them; and you.
4. Wants to work with you
This is an important point.
A potential partner who is more than satisfied with the results of their existing sales and marketing efforts may not see the value in teaming up with you. If this is the case, move on. Dangle your hook in front of some of those other fish.
5. Wants something you can offer
While it’s important to filter for potential partners who can bring benefit to you, it’s also crucial to clearly identify what you have to offer.
For example, imagine you’re not the marquee company, but your potential partner is, and they’re based in Newcastle. Meanwhile your Edinburgh-based company sells and hires kilts. You can help them reach new customers in a new area.
An exercise for identifying your target Strategic Alliance partners
On a piece of paper, draw a simple six-box grid.
Assign each box a broad category of type of supplier, for example; Accountants, Banks, Marketing Agencies, Plumbers or Financial Advisors.
Within each box, write the names of at least three players.
These may be companies/people who you already know and have had contact with, or they might be those you know of and would want to target.
If you cannot fill it out with people you already know or know of, you should be able to use your categories to find further players. A simple search on LinkedIn can often help, or searching through networks you are a member of (such as BNI or other networking groups). Another good way is to ask the players you already know within that category who their competitors are.
If you have more than six players in any single category, stop and move on to a different category. You want to disperse this across categories so that you can get a wide breadth of audience.
With this exercise complete you now have a list of potential strategic alliance partners with potential access to a very wide audience. You can now figure out what to offer them, how to approach them and then, hopefully, build relationships with them to start dramatically increasing your warm, high quality leads.
About the author
This guide has been written for ByteStart by Shweta Jhajharia, Principal Coach and founder of The London Coaching Group. Despite a competitive economy, her clients across sectors consistently achieve measurable double digit growth (over 41%) and are the most awarded client base in UK. Shweta is one of ByteStart’s regular contributors, and some of her other articles include;
- How to turn your customers into your best sales force
- The 4 Rs of getting more business from your existing customer base
- The 3 issues you’ll need to overcome if you want your start-up to reach £1m turnover
- How winning an award can get your business noticed, PLUS 5 ways to reap your prize’s full potential
- 4 Steps to building your business by hiring ‘ugly ducklings’
More help on getting more customers and promoting your business
You can find lots more help and ideas on cost-effectively promoting your business in these other ByteStart guides;
- Making your business a success online – A Digital marketing guide for small business owners
- How to create business cards that make a big impression
- 21 killer ideas to get free publicity for your small business
- How to plan and implement a successful email marketing campaign
- A Practical guide to Content Marketing for small business owners and start-ups
And these will help you to succeed with your online and social media efforts;
- 10 Top tips for small businesses starting out with social media
- How to get started with Twitter
- Tweets that get you followed and your business noticed – How to build a loyal following, 140 characters at a time
- How to use Facebook to grow your small business
- Marketing your small business through YouTube – The 4 essential steps to success