Alliance experts

Marketing alliances
for extra turnover

Explaining how you can find

partners and set up a deal structure

ALFRED GRIFFIOEN

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Marketing alliances are an effective strategy to
boost turnover and to win large projects
In the last decade, one development has been dominant in how
consumers and companies do business. It is the ever-growing
availability of information, facilitated by the Internet. Consumers and
company purchasers and government institutions all have increasingly
better knowledge of the market and can easily compare products from
several companies.

To compete effectively in this market, companies either need to offer

unique products (so there is hardly any competition) or to become the
most relevant supplier for their clients by offering a complete range of
products and services as one solution. Forming an alliance with a
complementary partner is a fast and low-risk way to achieve this.

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Examples of marketing alliances can be found
both in business and consumer markets

Business-to-business markets Business-to-consumer markets

Printing products
Mobile phones
and services

Business Consumer
applications electronics

Seamless air
Mobile platform
transportation

LNG terminal Search engine

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Key to a marketing alliance is to increase your
relevancy for your customers
Why would a customer choose you if you only offer part of his solution?
If you can offer a complete solution, several products to choose from or
if you can service a returning customer with another need as well, you
will have an advantage over your competitors. Partnering can help you
offer a complete range of solutions.

Every person has a number of generic needs: security, friendship,

relaxation, efficiency and success. Depending on the context or situation
you are in, these generic needs convert into actual needs.

Portfolio Generic
management needs
Actual
Fulfillment of Market
customer
your brand promise relevancy needs
Distribution and Context /
communications Situation

Market relevancy is achieved by combining the right products and

services so that you can best service both the actual needs and the
underlying generic needs. By combining more „matching‟ products and
services in your offer, your turnover and profit will grow.
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Your success is determined by three chances: of
finding a partner, of winning the deal, and of
making the deal profitable
When you see a project in the market and it makes sense to bid with a
partner, depend on three aspects.

x x
It takes two to tango, and if you have found the perfect partner for a
project in the market, it may turn out that the love is one-sided. Your
partner may even be cheating on you and leave you with nothing.

Some partners offer a better chance of winning the deal than others.
Differences can exist in the relationship with the client, in technology,
and even in experience with selling a combined offer.

Last but not least: the potential to make a profit can differ per partner.
What are their project management capabilities? Do they have
experience with working with a partner? And how tough will you have
to negotiate for your share of the profit?

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The chance of getting a specific partner does
not only depend on you…
Obviously there are multiple players in
the market. Just as you will evaluate your
potential partners, they will evaluate you partner
against the others.

The two things that you can influence in

this process are: partner You
• your own attractiveness, for example
by investing in innovative solutions
• your contacts in the market, to
enhance your visibility for others and
to get more information.
partner
As soon as you have identified your
„perfect‟ partner you must aim for
exclusivity. But often everyone waits to partner
(out of sight
play his cards up to the last possible for you)

moment.

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Once you‟ve found a partner, the type of
agreement can best be based on each party‟s
own contribution and liabilities
There are multiple ways to formally arrange your partnership, ranging
from almost a normal contract to almost a complete merger. The main
distinction is between contractual arrangements and share transactions.
The optimal type of contract will depend on what each partner brings to
the alliance and on the liabilities that the partners are willing to bear.

Traditional • Superficial customer/

contract supplier relations

Contractual Unilateral • Licensing, franchising

agreements agreement • Long-term outsourcing

Bilateral • Joint R&D, marketing,

agreement distribution
Partnerships
Minority • One-sided
share • Exchange of shares

Share Joint • 50% - 50%

transactions Venture • Other proportions

Dissolve • Merger
a company • Takeover
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Chances of winning the project depends on
having a breakthrough value proposition

The business case for starting a marketing alliance is primarily based on

the synergy between the partners and their product or services
portfolio. When competing for a project or a large order, the combined
offer must score better than that of the competitors – measured against
the evaluation criteria of the client.
Scope that the partner
The right partner in most cases Scope that can be
can reach with some effort

has a scope that does not reached with some effort

Scope
overlap your own scope to Scope right
avoid competitive behaviour Eigen partner
own
bedrijf
within the alliance. On the company
other hand it might be difficult
Scope
to work with a partner from a partner
completely different branch: too close
Scope that the partner
partners may have no can reach with some effort
experience with the interface Scope
between each other‟s products. partner
too far
The right partner understands away
your business but does not
compete with it.
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Arrive at the best possible bid with teamwork
and a tight timeframe
Making a good offer is a complex A tight timeframe with some slack is
process, especially if you want to important, as it wouldn‟t be the first
combine skills from two distinct time that one of the parties backs out
companies. Knowledge exchange just before submitting the offer.
works best through face-to-face To agree on exclusivity is one, but you
contact, so try to make sure that can‟t force the other party to sign the
the people involved meet offer. So make sure you have time for
a backup plan.
frequently or work in the same
office building.
Find
It is also important at partner
management level to meet
regularly during the process of Exclusivity? No Find
composing the bid. How is the other
Prepare partner
progress, does the original scope offer
foreseen for both parties still fit,
what margins are acceptable? Go? No Backup
plan
Submit
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Chances of profiting from your collaboration
also depends on „soft‟ factors
After successfully submitting your joint offer or having won a project, the
next challenge arises: running your collaboration in such a way that profit
is maximised. This requires teamwork between employees from both
sides, and teamwork primarily depends on trust, not on procedures.
Therefore it is important to spend time on introducing all
staff involved to each other and to discuss the expected behaviour.

4 cores of credibility Types of trust

Basic attitude towards trust

High
Integrity Are you reputable?
Blind trust Smart trust
Intent What's your agenda?

Capabilities Are you relevant?

No trust Distrust
Results What's your track record?
Low
Low High
Level of proof and analysis
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Setting up a partnership also requires informing
your organisation
An alliance only works if the majority of those involved see it as a
benefit for both the company and themselves. This requires explaining
that the collaboration aims to enlarge the workload and not to transfer
work to another company.
When working with a company that
has competing activities as well, First consult

Does the information

other managers Do not share

help a competitor?
communication with the partner must Yes before sharing the information
be structured carefully. By information

collaborating with their American

competitors, Japanese car makers
were able to gain a large market Freely share
Share the
information
share in the US. No information
if it helps the
collaboration

The diagram shows in a simple way

how to treat information on basis of Yes No
the value for the competitor and Is information publicly available?
whether the information is publicly
available.

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Working in partnerships is a process of
continuous learning

As practically any partnership is unique, you will encounter new

problems and have new experiences. Partnerships are by no means
„standard business‟. Once you recognise that and see your partnerships
as a learning process, you will gain more from it.

Formation, operation and evaluation are three stages with different

learning points. A good controller will define measures to monitor the
results of this learning process. This will eventually lead to better results
and less risks.

Formation Operation Evaluation

Learning about the Learning from the Learning about

partner partner partnerships

Measuring the process Measuring on the Evaluating results

to establish the alliance achievement of
results
Estimating risks Improving the risk
Mitigating risks evaluation

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Evaluation, advice and training are the best
means of enhancing your chances on success

Research by Draulans, De Man and

Volbeda into 49 companies shows Success
that success as measured in profits, ratio
achieving targets and the quality of
the relationship increases with
experience

The learning effect tends to level off

from the 6th alliance

More success can be achieved

through:
- Structured evaluation + 38 % 6
Number of alliances
- Hiring a specialist + 45 %
- Training in the subject + 76 %

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Alliance experts offers support in getting
started and getting better with alliances

Alfred Griffioen (1972) has a background as strategic marketing

manager and business development manager. After a period as
manager at a strategy consultancy he is now partner of Alliance
experts, advising on strategic partnerships and matching companies
that are looking for an alliance partner. He is the author of the book
“Het Senseo-effect”, which is a practical guide to alliances. In 2009 he
wrote “De Strategieversnelling”, which links the formation of alliances
to competitive strategy.

Alfred Griffioen is available for lectures and workshops. He can be

contacted on +31 6 24 77 68 65 or through
alfred.griffioen@allianceexperts.com.

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