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Three steps to making partnerships work

Forming strategic alliances with non-competing companies can rival word-of-mouth as a more effective form of marketing, according to Shweta Jhajharia.

These partnerships can add profit to each firm’s bottom lines, multiply the quantity and effectiveness of referrals, the principal coach and founder of The London Coaching Group said, adding that the effectiveness of this strategy can also be measured.

Because such alliances can take time to build up, this approach should be deemed a long-term strategy, Ms Jhajharia said.

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“It is important not to think of this as ‘getting’ something from your alliance partner. Think first about how you can help your alliance partner, then about how that partner can potentially help you back. This way your alliance will flow much more smoothly.”

Business bosses should start by considering who the other suppliers to their ideal clients might be, and other services that their clientele may require, Ms Jhajharia said.

In addition, company chiefs should qualify their list of potential partners by matching them up to a list of three criteria.

The first is audience. Both parties should have similar clientele, according to Ms Jhajharia.

Second, strategic alliances should be non-competitive, as businesses should ensure their services add value to their strategic partner’s clients, Ms Jhajharia continued.

The third involves access to client/prospects.

“Ideally, you want them to have a database of clients and/or prospects that you can easily access. This is important because ultimately their audience will determine how valuable this alliance will eventually be to you.”

In addition, finding a willing partner is key, according to Ms Jhajharia, adding: “If the potential partner is already satisfied with their sales and marketing and they cannot see much value from you, you should probably move on.”

She added: “You need to offer something that they actually want from you.”

Adviser view

Colin Low, managing director at Essex-based Kingsfleet Wealth, said: “Our most important strategic partnerships are with solicitors and accountants.

“We have always found forming a strategic partnership with another advisory firm difficult. We do not offer advice on mortgages ourselves and we have struggled in the past to find a firm that we can trust which offers advice in this area. I think we have now found that firm.

“Forming a strategic partnership goes a bit further than the basic referral process and it is not all about the money either.

“The key thing for us is understanding how both companies would work. We would want a partner that shares our perspective of the world. It is not about forming an alliance with a company to maximise profit but partnering with a firm that shares our ethical standpoint and is interested in providing the best possible service to our clients.

“I’d like to think that we have a level of knowledge and qualification that would attract potential suitors. We know what we are talking about and offer a good service.”