12 Steps for Successful Business Alliances

It takes teamwork

Business Alliance: An agreement between two firms to align resources and combine offerings to improve customer satisfaction and extend market reach.


Business alliances extend the value you can bring to customers. Choosing the right partner and effectively nurturing the alliance through the early days will pay back in happy customers, market share and profit

All businesses need alliances to grow and prosper. From self-employed financial planners to global manufacturers, alliances help extend reach and improve customer value. Alliances have also been criticized as underperforming investments that sap resources without delivering results.

That need not happen to you. Applying these twelve best practices will give you tremendous advantages while reducing the risk of engaging in an unsuccessful alliance.

1. Tie the alliance to your core business

You know your core business best. It stands to reason that building an alliance should begin from this base. Yet many companies have attempted to use alliances to enter new markets where they have little experience.

Use your hard-won experience to maximum advantage. When looking at focus areas where an alliance could help you grow, start with your existing business plan and customer base.

2. Test your assumptions with your customers

A business alliance consolidates goods or services to improve customer effectiveness. However, each of us only has a narrow view of customer needs. What seems obvious from the outside is rarely the same on the inside.

Engage your customers with open-ended questions to test your ideas.

  • What would really make your work simpler?
  • What holds you back from being even more successful?
  • What really irritates you?

Then look at your alliance options and business plan to see if there are ways you can help them. Be careful to avoid making promises at this stage.

3. Develop clear expectations

Be specific about what you want out of an alliance partner. Make sure you know their expectations as well. Is it knowledge and experience, target market access, or sales and service resources? Write down what you are looking for before you start. Turn those requirements into a set of qualifying questions.

You are bound to discover other great ideas. However, you can only work one at a time. Don’t confuse potential partners with too many options.

4. Start with your value proposition

Each alliance complements or extends what you already bring to the customer. Be able to state your own value clearly and simply. Without it, others may not understand why they should spend time and effort to work with you more closely.

5. Do your homework before you recruit

All partners are not created equal. Gather specifics on several before you create your short list. Evaluate them against your criteria before you engage them directly. Use references and feedback from customers you trust.

6. Create a win-win-win opportunity

Make sure everyone has a win: you, your partner, and the customer. If it isn’t simple and compelling, no one will pay attention. Triangles are very strong structures. Make sure everyone understands how they benefit, and how everyone must work together to achieve the benefits the alliance can bring.

7. Set a vision and reach it with concrete steps

Alliances are based on people working together. This often means changing work habits to reach a higher goal. It’s not easy for anyone, so set near term milestones as well as long-term goals. That way you can generate short-term success for everyone to share.

8. Keep contracts simple

Nothing generates success like success. Complex contracts take time to create and large amounts of effort to track and administer. That time could be better spent improving alliance execution and satisfying customers.

The early days of any alliance are a learning experience. Accept mistakes and move on. If the vision of the alliance is worthy, there will be sufficient returns for everyone.

9. Engage with your partner at every level

In an alliance, one company almost always leads. If that’s you, expect to do a lot of selling inside of your partner’s organization.

Never expect others to care until you have met with them, discussed the mutual objective, and gotten a firm, positive agreement. A contract will not make this happen. Neither will one-way communication such as posters and email. You must put in the time.

10. Measure and report near term results

Alliances often set metrics such as “new projects closed” or “new accounts”. These can take a long time and can have setbacks along the way. Longer-term successes are really dependent on repeating many partnering tasks frequently — working closely together. So measure and report on all the new tasks people need to do: cross-training, discussing opportunities, giving each other feedback after sales calls.

11. Make money together

Keep a close eye on the money. As your firm prospers, make sure your partner is reaping benefits too. Also, point out to both sides how the added business directly resulted from the time and effort both sides spent to work together. When you can, give customers the opportunity to give combined feedback to reinforce the value of partnering.

12. Celebrate success!

People like immediate, specific, positive reinforcement — “strokes”. Whether the alliance requires planning meetings or joint sales calls, let people know you appreciate the first steps. Small, frequent, celebrations keep attention on the alliance behaviors you want to create. Celebrations also provide an opportunity for education, best practices sharing and feedback. To top it off, celebrations are less expensive than commissions or incentives!