The decision to create business alliances with other companies in your industry can present a complex situation for business owners and executives. You may be wondering: How can I know which companies will be a good fit? How can alliances be used to strengthen sales? How does the alliance change my position in the market and the position of my new ally? My goal is to answer these questions and explain how a synergistic alliance can help you win more business and work to differentiate your company from the competition.
The web has given offshore companies an equal footing with US companies when marketing for US companies. Several years ago the quality of the offshore contractor’s work was questioned, but more recently they have stepped up their act and perform much better than in the past. However, it is still the offshore producers who position themselves as low-cost providers rather than differentiate themselves by superior quality. This provides the domestic producer with a unique opportunity to differentiate based on quality of staff and service rather than cost alone.
American companies must be careful not to fall into the trap of the least-cost producer. Leveraging strategic alliances and working to improve quality among their staff, they must remain focused on producing a higher quality service than doing it cheaper than everyone else. In the long run, this should be a better strategy. American companies can meet this challenge by saying, ‘we understand American business in a way that a foreign company may or may not, that’s a proven risk. Using a national company with a proven track record greatly reduces that risk.’
A common co-branded alliance being made between service providers and software companies is the use of licensing agreements, which allow companies or individual consultants to become certified in particular skill sets known to their applications, such as MCSE, MCNE, Sun Micro Java Application Certifications, etc. …or company-wide certifications as a “Microsoft Gold Partner” (Onshore Technology Services, 2007). This provides a springboard for consultants into specialized software application situations and is a popular marketing tool for consulting firms to advertise their expertise, because the license defines a particular set of skills.
A second technical alliance is the development of synergistic alliances between companies with different but complementary skill sets. For example, a company that specializes in search engine optimization would form an alliance with a company that specializes in Java applications, or networking, or some other related specialized skill set that doesn’t directly compete with their specialty. The key to making the relationship work would be finding the right skill set to improve the overall marketability of the two companies by increasing the variety of skills available to clients and improving overall customer service. These two methods can be combined to develop an alliance strategy.
Strategic Plan of Action:
1. Look to update individual and company certifications to reflect a higher level of service in the industry. These enhancements may apply to its customer service features as well as its technical capabilities. Enhanced certifications can be used as a point of differentiation from the competition, so make these changes known to the market, your advertising and public relations should make these changes known. Additional public relations can help you perform better in the next step, finding a strategic partner.
2. Find a strategic partner. Seek to develop a strategic alliance with companies that offer complementary services to yours. Both will need to create concrete plans on how best to implement the exchange of clients, potential clients and plan the mutual training of the sales force.
3. Your website, marketing materials, and sales force (don’t forget that by forging an alliance you have expanded your sales force with your partner’s sales force!) should be used to advertise your consultants’ superior credentials and the service improvements. They must emphasize the relationship between their pricing structure and the superior quality of their services.
4. You need to cross-train your new ally’s sales and marketing departments (this goes both ways) to familiarize them with what you do and what you can offer their customers. A clear plan should be created for how best to share customers and service opportunities (which is why you formed the alliance in the first place, so this plan requires careful attention).
5. Another option is to develop a secondary relationship with a low-cost service provider. Your new alliance will give you greater leverage and purchasing power. You may be able to outsource routine research or preliminary scheduling work as a measure to offer greater flexibility when negotiating prices at the contract desk. But, the objective is to differentiate in quality, not only in price. It is important to discuss the relationship between quality of service and price in your negotiations.
These recommendations for action are designed to work synergistically; you can use them one at a time or all at once. They represent an integrated business strategy to improve your company’s market share, market position and bottom line by creating synergies with other companies that have complementary skill sets that you can both leverage to mutual benefit. Set yourself apart by providing superior customer and technical service (in that order), your customers are sure to sit up and take notice.
