Are you leveraging your resources?

If you could find a reliable way to access a target market of potential customers so you don’t waste your valuable resources on unfocused high volume marketing, would you do it?  This idea is not new – but it’s one of the least exploited opportunities for many businesses.

The idea is simple – you build relationships with people who have a similar target market, do not compete with you and who can see value in reciprocal joint marketing activity.


This is the Strategic Alliance.  It works like this…

Firstly, there are two questions you have to ask yourself:

  • What do people really want to buy from me?
  • What related products are they already buying?

Once you figure this out you will know who is more predisposed to purchase your products or services.  Then, you find other businesses with the same customer base that you can “customer share” with.  Then you can jointly come up with some form of incentive and an arrangement to encourage both of your customer bases to buy from both your businesses.

The basic concept is this:

You want to find existing businesses that have the customer profile that you are looking for – but don’t directly compete with you – to market your products or services to.

Then build a relationship with those business owners to work out an approach and incentive for customers to purchase from both businesses.  You will need to make that incentive something tangible for your prospective alliance partner.  That could be a direct financial incentive or it could be something that gives them greater returns from their customer base.

The great thing about this approach is that the customers of your Strategic Alliance partner are already comfortable with their services or products and so are more likely to give time to something that they support.

The real clincher for this strategy is that you are actually offering your alliance partner the opportunity to be seen to offer added value to their customer base, thus increasing the chance of them remaining their customers in the long term.

In our business – Business Coaching – working with anyone lending money on risk (banks, funding bodies, etc.) can offer a great opportunity to mitigate that risk if the recipient’s business gets stronger through working with their coach.  So for the alliance partner, there is a real benefit and for the Coach too… a real win-win!

That’s in our sector – in yours you are likely to want to offer some real tangible return to your alliance partner.  You also want to achieve a long term relationship with your customers.  How much is that worth to you?  What is the Lifetime Value of your customer?  Have you ever calculated this for your customers?  Well here’s how to do it.

There is a great formula from Jay Abraham that gives real insight into the dynamics of customer retention and which you can follow with great success:

LV = (P x F) x N – MC

Here’s what it all means:

LV is the life time value of a customer

P is the average profit margin from each sale

F is the number of times a customer buys each year

N is the number of years customers stay with you

MC is the marketing cost per customer (total costs/number of customers)

Once you understand how much you need to spend to attract a new customer, you will know how much of an incentive you can offer to an alliance partner to help attract those new customers.

So, here’s your step-by-step process:

1.  Find companies who already have the customer base you are looking for.

2.  Negotiate an incentive for them to share that customer base with you.

3.  Focus your marketing resources to this group of predisposed customers.

So what are you waiting for – the leverage advantage starts here!