What if there was a way that you could give your customers something of value, something for free without it costing you a thing? Now that is an opportunity that most business people would jump at. Think of it. Your customers would certainly be happy because they would be getting something for free. They would feel valued and be more inclined to continue purchasing from you in the future. So you would be increasing the lifetime value of your customers - the biggest asset in your business, and that without it costing you anything. If implemented correctly, strategic alliances are one of the most effective ways to increase customer loyalty and grow your business.
Why Consider Strategic Alliances?
No business operates in isolation and no target market is unique to a specific business. So when you are looking to give your customers something of value sometimes it makes sense to look at complementary businesses. Take for example a clothing boutique. Customers that shop there will generally take care of their appearance. Having fashionable clothing, trendy jewellery and accessories, a stylish haircut, or manicured hands will be important to the boutique's target customers. You can establish with a fair amount of certainty that your target market does not only have an interest in clothing; they have an interest in all aspects of fashion and grooming. There is a strong likelihood that there will be similar businesses in the vicinity of your clothing boutique. Use this to your advantage by forming strategic alliances with complementary businesses. In this way you can add value to your customers and attract more new business.
How To Go About Setting Up Strategic Alliances
- Consider what other businesses in your area may have a similar target market. Do some research on them to find out their business reputation and if they value their customers.
- Think of what complementary products or services your customers may consider as something of value. Look at what possible interests they might have and then find out if there are any complementary businesses in your area with which you could possibly align.
- Approach the business with the idea that they would be giving their customers something of value. It is not just about asking them to promote your business; it is more about the fact that their customers will appreciate benefitting from your offer and it will provide their customers with something of real value, so that it is worth their while. Ideally it should be something free, like a gift or a voucher for £50 or £100 that they can use towards a purchase.
- Take time to explain the win-win to the alliance partner. They win because they are giving their customers something of value; you win because you are getting new customers through the door, and the customer wins because they are getting something for free.
Many businesses are wary about strategic alliances, and rightly so. When you align yourself with another business your reputation is on the line. That is why it is important to first research potential alliance partners to make sure that they are suitable. It takes having an open minded business approach and showing a level of trust with the other business for alliances to work. But if you work together in a way that it benefits everyone you will soon all see the value of the relationship.
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