alliance success

Three Key Activities for Successful Alliances (465 words)

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Ed Rigsbee, top speaker on alliance successWhat are the key activities for a successful alliance? In an issue of Industry Week, there was an article titled, Collaborating To Grow. Mentioned in the article, was a recent survey of U.S. executives taken by KPMG LLP. It appears that sixty-four percent of the responding executives plan to increase the use of strategic alliances during the next two years. What was not covered was how they were going to make these intended alliances successful.

Through my work with alliances, I have discovered that there are basically three key activities necessary for achieving successful alliances:
1. Finding others with whom you can create mutually beneficial value.
2. Delivering that value to one another.
3. Communicating to your partner the value you delivered.

While I realize you might be think the above is too simplistic, understand that a number of people spend their entire careers working on the fine details.

Finding others with whom you can create mutually beneficial value
Too many organizations never get past this first activity. In searching for another organization with which to develop a strategic alliance there must be complementary core competencies. This means that their circles of interest must overlap, as should their core capabilities. Inherent in the search for a compatible partner is the fear of having to give up a modicum of control. Giving up control is a huge hurdle for many executives.

Delivering that value to one another
This would seem straightforward but the challenge is in understanding what your partner considers valuable. Too frequently, one partner delivers value to another that the second partner did not consider to be of value. Guess what? The perception from the second partner’s point of view is that no value has been delivered in this situation.

Communicating to your partner the value you delivered
Through my work in the area of alliances, I have discovered that about fifty percent of the alliances created are not successful. The primary reason for the lack of success in most cases was ineffective communication. There are a number of possibilities from basic to complex. Many of the successful communication methods are electronic-centric.

Additionally, many follow up and feedback methods use the 360-team evaluation style of response mechanism. This allows perceptions of alliance performance in both the macro and micro to be known by all. Once challenges are discovered, repair strategies and tactics can be put into place.

I wish you the best in your definitive actions of developing alliances to grow your business. To offer you a bit of help in the first area–selecting a partner, I will provide you with the first chapter of my book titled, Developing Strategic Alliances. This chapter will give you an idea of the possible types of successful alliances and the reasons for creating them.

Grapefruit-Valuable to Whom?

Value to Whom? (781 words)

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Value Can be as Elusive as the Mythical Gene-in-the-Lantern

Ed Rigsbee, top speaker on valueRecently, following a visit to my home and the subsequent harvesting of my grapefruit tree, my friend found herself needing gasoline for her car late that evening. Upon arriving at a gas station, a person seemingly to be homeless offered to pump her gas for a tip. She declined his offer; not wanting to contribute to what she believed would be his next bottle of booze.

Still, wanting to make a difference for this “homeless” person—and highly appreciating the grapefruit from my tree—placed a few of her yellow prizes in “his” shopping cart. He tells her that he can’t eat the grapefruits without a knife. She explains to him that they are so sweet and delicious that she just peals them and enjoys them like she would a tangerine or orange.

His retort was that he would need a grapefruit spoon to eat them and he hands the grapefruit back to her. She was utterly amazed that he, apparently homeless, would turn down such a wonderful gift.

Have you ever found yourself in a similar situation, less the grapefruit, with a business or supply chain partner?

At first take, it would seem that this homeless person was quite ungrateful toward my friend’s generous offer. However, upon closer examination, one might arrive at a different conclusion? Exploring the situation further, this homeless person desired to get paid in return for a rudimentary service. The value for which he sought was negotiable tender—hard cash, for purchasing whatever he liked. What he was offered was something to eat—not what he wanted. No question, the food offered was wholesome, nutritious, and tasty—but, not the cash he wanted.

Applicable to Any Organization

This value lesson is applicable in personal and organizational situations alike. In a casual interaction as described in the above example, do you find yourself becoming aggravated when another person declines your offer? The key idea upon which to focus is this—just because you find something valuable, it doesn’t mean the other person considers your offer to be of value to them. In one’s personal life this can have an enormous affect on the quality of one’s relationships.

In the business environment, not delivering the value for which your strategic alliance partner, supplier, customer, or employee wanted can also devastate the relationship. This is a frequent reason for alliances failing, customers moving on, and so forth.

How Do I Know What They Want?

Once you have accepted the premise that it is important to deliver the value the other wants, which I realize is counter intuitive to the “Golden Rule” of delivering what you would want, only then are you ready to develop what I call “Outrageously Successful Relationships” in business and life.

Now the challenge is to be aware of what the other person or organization considers being valuable. As an example, you might be invited to a new acquaintance’s house for dinner. Not knowing them well, and definitely not wanting to show up empty handed—you grab a bottle of fine wine from your personal supply as you leave for their house. Since you like red wine, that is what you select to take. You get there, offer the wine and it is not opened but rather white wine is served with a red meat.

The reason for white wine is that the host has an allergic reaction to red wine. This example is not too far off the grapefruit story in so much as the offering did not create real value for the intended recipient. What could have been done different in this wine example? Sure, you could have called ahead and asked—it’s just that simple.

How can this be done in a business situation? Similarly, you can simply ask. If for some reason that would not work, other options include:

  • Call your contact’s secretary, assistant, or other operational person. They will generally have a good handle on the preferences of their boss.
  • Talk to their suppliers.
  • Talk to their customers.
  • Send a pre-meeting/activity survey.
  • Conduct an Internet search on the executive or organization for background information.
  • Be creative, be complete, and be certain about what the other considers to be valuable.

Yes, value can be as elusive as that Gene-in-the-Bottle; if you do not take the time to determine the other person’s value equation and parameters. Answering the title question, value to whom—just because you consider something to be of value, there is no guarantee that the other person will see it the way you do. Use this to your advantage and enjoy watching your competitors stumble.

Handshake Alliance

Grow Your Business with Smart Marketing Alliances (520 words)

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An Alliance Jumpstart

Ed Rigsbee, top speaker on Collaboration & AllianceIn most Smart Marketing Alliances you will either be the provider of a product/service or the provider of sales/distribution capabilities. Either of the two necessary components of your marketing alliance, will be the core competency you bring to the relationship. Pulling together competencies from two companies really does deliver more combined opportunity than would be available singularly.
This competency is one of your assets. While assets usually take three basic forms; physical (equipment, cash, or hard product), intellectual (service capability, market knowledge, or product development capability), and brand identity (brick and mortar location, product/service positioning within the consciousness of the marketplace, or reputation) — many fail to have actual dollar values assigned to them. You do want a mutually beneficial alliance, don’t you?

Giving and Receiving Equal Value

In successful alliances, usually each partner brings approximately equal value to the alliance relationship. If there is an imbalance, so should be the commensurate reward. The challenge for you is determining the value you are bringing into the relationship. And also to be certain that you are not giving away value without getting something in return.

Additionally, it is important for you to consider the implications to your company that comes with alliance relationships. Some of the implications that might drive the necessity for organizational change on your side include:

Need for openness and transparency
Need to consider how your actions affect your partner
Need to make adjustments in your organization to allow integration with your partner
This is the reason that it is crucial to the success of your marketing alliance that you select your partner well rather than jump at the first opportunity that presents itself.

An Organization’s Alliance Capability
You must be certain first about your alliance capability; meaning your organization’s ability to implement and maintain an alliance relationship. Some of the key competencies within your organization that you will want to explore are:

Show a solid commitment to your alliance by assigning a champion to oversee the total success of the alliance as opposed to only being concerned with how well your company is represented in negotiations.

Focus and flexibility might at first glance seem diametrically opposed to one another however it is the focus that allows you to monitor when there is a need for flexibility and just how much

Communication is the silent killer—lack of quality communication that is. Most of the alliance failures are detected back to communication problems. There must be systems and capabilities in place for a 360 style communication mechanism where everyone involved in the alliance has the ability to communicate with anyone else, regardless of which partner employs them and hierarchical challenges.

The above are not your exclusive challenges in building your Smart Marketing Alliance yet covering these bases gives you a great start. You deserve to create synergistic bliss for one another in an alliance relationship regardless of your contribution; the product or the market control.

Be smart in your alliance partner selection. Be smart in your alliance development and implementation. Be smart in maintaining a healthy and profitable alliance relationship.

Ed Rigsbee, top speaker on Membership Growth

Strategic Marketing Alliance; Develop Yours as Easy as ABC… (533 words)

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Ed Rigsbee, top speaker on strategic alliance successLearn how to develop strategic marketing alliances. Alliance development and implementation can be as simple as A, B, C—well, actually A to G. I’m sure you can handle the extra letters. Follow this easy guide when building your marketing alliances or any strategic alliances for that matter, and your chances of success will increase ten fold.

  • Assess yourself and or your organization through the traditional SWOT model; strengths, weaknesses, opportunities and threats to determine your reasons for alliance development. You first have to be quite clear as to what core competencies you have to offer a potential partner. Similarly, you have to know what you need from a partner to seek the correct partner having the correct competencies. Without this clarity, your chance of success is minuscule.
  • Be sure about your partner. This is where so many alliance development novices go wrong. After the assessment of your potential partner’s competencies, now comes the necessary step in also determining their propensity to partnering. Just because another has a core competency that you need, there is no guarantee that they will willingly share it. Be smart, be sure.
  • Conduct a pre-alliance agreement workshop among both companies, including the people that will be acting as the alliance functionaries. Here is where most of the problems need to be hashed out before the agreement goes to the lawyers. The workshop process is designed to reveal gremlins, particularly in the areas of culture, relationship, cooperation, and logistics. This activity will minimize lawyer costs, conflict resolution costs and false-start costs.
  • Determine your alliance structure. This is where you determine how formal your alliance relationship will become. There is a range from a casual handshake relationship through the traditional strategic alliance to a joint venture. While structure can evolve over time, you are far better off to determine the correct structure for your alliance in the beginning.
  • Execute the agreement. This is where, as the saying goes, the rubber hits the pavement. This is where you put up your precious resources. This is where you craft the written agreement and sign on the dotted line. Yes, you must have a written agreement outlining who is responsible for what. Who owns what and how conflict is to be handled. This is where you make a commitment to your partner.
  • Fuel the implementation fire. Getting your alliance from paper to activity requires plenty of fuel from both partners in the form of hard resources, time, and mindshare. Fuel is the currency of alliance structure, implementation and long term success. You must be willing to use some of yours when engaging in alliance relationships of any type. To be very specific, fuel means:
  • Time
  • Effort
  • Mindshare
  • Competency
  • Cash
  • Supplies
  • Equipment
  • Human resources

Great results require measurement and management. Plenty of alliance management tools have been developed over the last decade and they are available to you today. Some of the very important alliance measurement and management tools include:

  • Alliance managers
  • Joint planning
  • Intranet
  • Joint evaluation tools
  • Individual evaluation methods
  • Alliance success metrics
  • Corporate alliance department
  • Employee alliance deployment, generally full-time

Results through Alliance

Want the Alliance or Results…What the Alliance Does for You? (516 words)

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Ed Rigsbee, top speaker on results techniques

Results through Alliance

Alliance or Results…too frequently business people get confused as to the end game. They get derailed into thinking it is the conduit that they want rather than what the conduit delivers. The quintessential story about the ¼ drill; where as one buys the drill for what the drill will get them—a ¼hole in something

Alliances are essentially the same; they just come with more complex instructions. You develop an alliance for what the new entity can do for you and your business. The key here is to remember that an alliance of any kind is not the end game but a conduit for receiving something you need.

Equal is an Unimportant Concept

Alliances done well, will deliver the needed value to all participants. I’m not saying that the value will always be equal—it rarely is. However, if all parties are getting the value they need, than equal is an unimportant concept. What is important for alliance success is that the alliance delivers the unique and special value that generally would not be available through solo effort.

How to Survive Down Times

Article after article, expert after expert suggest lowering costs and hunkering down. Wow, what good will that do? The answer is knocking on doors—literally, or figuratively. How did you start your business? You knocked on doors. How will you emerge from crummy economic times? Positioned as an industry leader or innovator, or as just another player? Just another player is not a great position from which to emerge.

Knocking on Doors

This can be taken literally or as a metaphor for business development. Most large company alliances are generated through the business development silos in their organizations then quickly handed over to the alliance management silo. The point is that you cannot hunker in and cocoon, but rather must venture out into that big bad, mean, business of cold calling and business development. Alliance relationships are a great conduit for business development. And you just might have to knock on doors to get your next alliance partner.

Delivering/Receiving Value

The end game for any alliance is to deliver value to its participants. This is done through a seven step process:

  1. Monitor
  2. Educate
  3. Select Alliance Type
  4. Organize
  5. Agreement
  6. Implementation
  7. Maintenance

Compare a healthy alliance to healthy arteries. If these above steps are carefully followed the alliance built, will he a healthy conduit for value delivery—opposite that of arteries clogged up with cholesterol provided deposits that inhibit healthy blood flow. As mentioned earlier, the value each alliance participant receives does not necessarily have to be equal, but should be commensurate with the assets/resources contributed to the alliance.

When you decide to knock on doors and develop alliances that you believe will deliver value to your organization; keep in mind that what you really want is not the alliance but the value it delivers to your organization. Develop a strong conduit that will not collapse on itself and slippery enough (flexibility) to keep harmful deposits from building up, thereby inhibiting the value delivery that all participants must receive.

mergers & Acquisitions

Acquisitions vs Alliances: the Basics (535 words)

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Ed Rigsbee, top speaker on Mergers, Acquisitions, and AlliancesIn your effort to decide between acquisitions vs alliances there are several important considerations. While the benefits to your organization might greatly differ between the two, so goes for the cost of failure. To help you succeed, first defining the terms might prove extremely helpful to you in your decision process.

Acquisitions

Acquisitions and mergers are effectively the same thing. Most mergers are really one company acquiring the other. In this acquisition process, the acquiring company receives the good and bad, the positive and the negative resources, liabilities, and reputation. The acquiring organization receives all assets and liabilities of the acquired organization.

Alliances

Alliances, generally strategic to an organization’s short or long-term plans, are contractual relationships wherein both organizations remain independent while collaborating to develop a mutually-beneficial result within a specific scope outlined in the contractual agreement. A very simple example would be the cross promotion efforts that are regularly employed by Hollywood ’s movie producers and various companies that sell their products or services directly to consumers.

Value in Acquisition

Value can come to an acquiring company through: intellectual capital, real estate, equipment, resources, market share and an extensive list of other considerations. However, the reverse is also possible (think Daimler-Benz & Chrysler). One of the insidious pitfalls of acquisitions is when the company being acquired successfully, and deceptively, hides liabilities from their suitor. Generally the strategy of acquiring organizations is to somewhat dismantle an acquired organization, keeping the targeted valuable components and assimilating them into the acquiring organization while disposing of the unwanted, under performing, or potentially damaging elements. If the acquiring company has a bad reputation (think Cingular) as an example, and the company they acquired has a good one (think AT&T), then value is delivered.

Value in Alliances

Value can come from alliances in a myriad of ways: immediate market penetration, immediate distribution of a product or service, cost sharing, new product development and the list continues. The down side might be: loss of complete control, divulging of proprietary information, ownership conflict of mutually developed products or services, time and resource distraction, and under performing partners—just to mention a few possible negative elements.

Alliance Benefit

The important alliance benefit in the area of determining acquisitions vs alliances is the ability that alliance first provides in looking before leaping. While there are countless stories of failed alliances, there are more of failed mergers and acquisitions. The price of a failed acquisition is almost always multiplied many times as compared to the price of a failed alliance. An alliance first, gives you the opportunity to “closely study your prey before the actual hunt is under way.”

My Advice

From my two decades of helping companies to develop mutually beneficial collaborative relationships, I would advise any organization or groups of organizations that are considering acquisition or merger to first develop a strategic alliance, or a few alliances, with one another to better understand the core strengths, weakness, capabilities, and cultures of all organizations involved. This process will assist in developing a working knowledge of the other, the process will help in identifying under which rocks company secrets are buried, and will expand the vision of possibilities. Remember, you deserve the partner you select; synergistic or antagonistic.

Joint Venture

Should I Start a Strategic Alliance or Joint Venture? (593 words)

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Ed Rigsbee, top speaker on Joint Venture and strategic allianceStrategic Alliance or Joint Venture…you are looking to gain that competitive edge over your competition. Many smart business leaders look to collaboration for expedient advantages. Might a mutually-beneficial relationship with another organization be in your future? If you answered in the affirmative, your next question will be, “Should I start a strategic alliance or a joint venture? This is a question that I’m frequently asked and the answer could be complicated?

More than Just Words

Actually, there is a huge difference between a strategic alliances and joint ventures; culturally, operationally, strategically, and legally. A little bit of strategy and pre-planning can, and will, make a dramatic difference for your organization as your new collaboration is developed and implemented. Let’s get it right from the beginning.

Strategic Alliance

Your reason for developing a strategic alliance relationship with one or more other companies is to take strategic advantage of their core strengths; proprietary processes, intellectual capital, research, market penetration, manufacturing and/or distribution capabilities, and a number of other reasons. You will share your core strengths with them too. You will have an open door relationship with another entity. You will mostly retain control. The length of agreement could have a sunset date or could be open-ended with regular performance reviews. However, you simply want to work with the other organizations on a contractual basis, and not as a legal partnership.

Joint Venture

Your reason for creating a joint venture is to take advantage of a fitting or convenient connection or overlap. A joint venture is a legal partnership between two or more entities. With a joint venture you will have something more than simple governance; you’ll have a completely new entity with a board, officers, and an executive team. Effectively a joint venture is a completely new organization, but owned by the founding participants. The board of directors generally is constructed with representatives of the founding organizations. This new company will “do business” with the founding entities—usually as suppliers.

Important Differences

  1. Your strategic alliance is a contractual or handshake agreement while the joint venture is a legal partnership, LLC, or corporation.
  2. Your strategic alliance summons the core strengths and differences of another organization to deliver value to your organization while the joint venture becomes a blending of cultures and creates a new organizational culture and path.
  3. Your strategic alliance requires continued relationship maintenance while the joint venture has its own leadership team.
  4. Your strategic alliance allows you to remain in control of your own company but the joint venture chooses its own direction; with the guidance of its board.
  5. You can retain control of your proprietary creations while involved in a strategic alliance but in a joint venture, these creations are the property of the joint venture. If the joint venture fails, dividing the spoils can be a challenge.

Which Is Right for You?

There are numerous reasons, benefits, and pitfalls available to you whichever path you select. The key is to have an understanding of both your and your partner’s long-term desires. You can jump into and out of a strategic alliance quickly but the joint venture takes much more time to start and could be difficult to end. The joint venture takes less necessary attention form stakeholders once launched because of its own leadership team. If you are not willing to devote your time and resources to the health and maintenance of your strategic alliance, perhaps the joint venture is the better path for you? If control is important to you, the strategic alliance would be the better course of action.

profitable partnering

Alliance Governance: Embrace the Diversity (525 words)

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Ed Rigsbee, top speaker on Alliance Governance

I like to call alliance success, “Partnering for Profits.” Unfortunately, a frequent alliance success pitfall is attempting to make your partner in your image—do things the way you do, think the way you think, and follow the same methodology. While it may appear in the short-term, to ease the rocky road of alliance governance, what it really does is minimize the value your partner delivers in the alliance relationship. What it was that attracted you to your alliance partner in the first place were their core competencies and the belief that together, value added synergies would be created and deliver benefit to both; and now you want them to change? How much sense does that make?

First the Process of Working Together

When you set up your alliance expectations in your alliance agreement, the first success should be successful organizational alliance integration—a strategy to collaborate in developing a cooperative process with which both organizations can successfully implement and integrate into their current processes and methodology. First you have to successfully cooperate and collaborate before you can implement the actual stated alliance function.

Cultural, Strategic, and Operational Fit

For any alliance to be successful there is the need for a reasonable cultural, strategic, and operational fit. However, there is not a need for exact cultural, strategic, and operational duplication. The cultural fit is about how compatible the management teams and corporate cultures overlap. The important question is can they successfully work together? The strategic fit is determining how well aligned are the objectives of the participating partners. Opposing corporate strategies can greatly handicap, even a well implemented alliance. Operational fit is the tricky one. How complementary are the business models, processes, and methodology? Notice I stated aligned, and not, the same? With alignment there can be differences, yet cooperation and collaboration.

Partner Due Diligence

I truly believe that due diligence is the “Achilles heal” for most organizations in the alliance development process. During this very important alliance development step, you really do need to be honest with yourself and your potential partner(s) as to your partnering expectations, your own capabilities, and the partner capabilities you seek. For years I have been saying, “People do not change after marriage.” What I mean by this in the partnering arena is the, all too frequent, misguided belief that one’s partner will get better after the alliance is implemented. How wrong can a person, committee, or organization be? Pick the correct alliance partner from the beginning. Trying to change them after is a fool’s errand.

New Alliance Tools for Smaller Organizations

When I first started writing about alliance development, many of the tools were financially only available to the larger corporations. However, with the preponderance of today’s social networking capabilities, many savvy smaller companies are using Facebook and LinkedIn for alliance success, especially in the areas of governance and implementation capabilities. As the social networking sites are now allowing greater control over privacy, they become even better alliance tools for smaller business alliance success. You will find that with a small amount of creativity, social networking sites can truly be a boon to alliance governance, implementation, and success.

Ed Rigsbee, top speaker on cross promotion collaboration

Effective Community Based Cross-Promotions (830 Words)

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Local cross promotion activities generally serve small, independent, and franchise businesses. This strategy is low cost yet high return, if implemented correctly.

Cross Promotion Strategies–Kinds of Cross Promotions

  • Geographic & In-House
  • Industry Specific
  • Buying Group
  • General Category
  • Companion Products
  • Related Tie-Ins
  • Similar Customer

Cross-promotion strategies can range from highly sophisticated with formalized contracts like with the major airlines and certain telephone long distance carriers, to promotions as casual as stuffing your bags with flyers or coupons from another merchant in your community and having them do the same for you. Or, perhaps putting promotional messages on one another’s register receipts?

An insurance agent in my community cross-promoted with a local restaurateur. The owner of the restaurant paid for the printing of the insurance agent’s business cards. The cards doubled as a 20% discount coupon for the restaurant and also had a map to the restaurant on the reverse. The insurance agent gave out several of his cards at every business upon which he cold called. The cards ended up sitting around in many of the businesses for a long time. This was because the cards were seen as a valuable discount coupon rather than another salesman’s business card.

They call themselves the Sonoma County Fine Furniture Association (SCFFA). This is an example of both a Geographic and an Industry Specific Cross Promotion. Eight Northern California fine furniture retailers, all competitors, banded together to survive through cross-promotion and buying strength. They developed combined events where customers would visit several of the stores to be eligible to win prizes. They promoted each other to their customers within the store, especially if the specific retailer did not have exactly what the customer was seeking. They even printed a combined brochure, including the address and map locations of each member. The front of the brochure said, “People you can trust.” They bought advertising together on the local radio and in the local newspaper. They even dictated to the local newspaper on which pages their advertising would be located. They received impact and results.

One Step at a Time

Taking the cross promotion idea one-step at a time, consider using the below listed basic publicity tactics by collaborating with another merchant in your community to cross-promote through publicity.

  • Distribute free booklets or reports.
  • Author a book.
  • Publish a newsletter.
  • Submit news releases.
  • Write a regular newspaper or magazine column.
  • Do your own radio show.
  • Get on popular radio & TV talk shows.
  • Become an expert resource for reporters.
  • Welcome new people to your town.
  • Congratulate people in writing when you read about their accomplishments.
  • Give public speeches.
  • Sponsor public seminars.
  • Host power breakfasts.
  • Sponsor local charity or service club events.

To achieve successful cross promotions, you’ll need to develop your process or road map. I suggest these steps:

  • Be clear on what you want to create for yourself.
  • Discover the “What’s In It For Me” for your promotion partner(s).
  • Develop a plan for who does what, especially in the areas of costs and contributions.
  • Explain to your promotion partner(s) the value they will receive. Help them to also have emotional ownership (commitment) in the promotion.
  • Develop a method to measure results.
  • Execute the cross-promotion.
  • Debrief on the value all the participants received.
  • Plan your next promotion.

Cross Promotion Check List

I suggest you also use this simple cross-promotion checklist:

  • Who does what?
  • Develop a theme.
  • Explore print advertising.
  • Explore radio advertising.
  • Explore cable TV advertising.
  • Explore direct mail advertising.
  • Explore E-mail advertising
  • Divide the work equitably.
  • Is everybody going to receive similar value?

The owner of several local Dominos pizzerias suggested this to me. “When you cross-promote with non-profit groups, keep the following in mind:

  • They always tell you what they want.
  • They generally have their hand out without offering much in return.
  • Be sure you tell them what you need.
  • Ask them to do more for you than simply take your money.
  • Always use coupons to assist in measuring results.”

Customer list based cross-promotions are usually quite successful and inexpensive. Generally each merchant expands the reach of their targeted customers two-fold, at a cost of approximately 40% to 60% less than is usually spent on a similar promotion conducted solo. Additionally, each enjoys the credibility of the other. Common direct mail strategies include flyers, postcards, coupons and calendars. Flyers can be printed on both sides for a two-party promotion or several flyers can be mailed in the same envelope.

Cross-promotion is simply common denominator marketing. You find another merchant or business that has similar or overlapping markets and customers. Then you discover a way to work together to do what you already do more efficiently and effectively or cooperatively do something promotionally that neither of you could not pull off solo.

Ed Rigsbee, top speaker on cross promotion collaboration

Less Work & More Results with Collaborative Marketing Relationships (1408 words)

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Strategic Alliances for Cross-Promotion

A popular reason for companies to come together is to reciprocally promote one another. Ideas are as simple as a local pharmacy and dry cleaner promoting each other with specials or coupons, to regional promotions, to national promotions. Cross-promotions can be developed with competitors or between organizations from different industries. The key is simply this—do you have similar customers? Almost everywhere you look, you can see one organization cross promoting with another. Recently, a cross-promotion advertisement in a San Francisco newspaper for Pacific Bell also involved Round Table Pizza, Hollywood Video, Nokia and the Special Olympics.

In your effort to make cross-promotion alliances work, develop your process by keeping the below listed steps in mind:

  • Be clear on what you want to create for yourself or your company.
  • Discover the; What’s in it for me (WIIFM) for your partner(s).
  • Develop a list of who does what for physical and financial contributions.
  • Plan for the unexpected.
  • Explain to your partner(s) the value they will receive.
  • Help your partner(s) to have an emotional ownership in the alliance.
  • Do the above step for yourself also.
  • Execute the promotion.
  • Debrief with partner(s) the value received from the investment.
  • Plan the next promotion.

“Got Milk?” The California Milk Processors Board, as reported in The Wall Street Journal, January 24, 1997, has been running that national promotion since 1993. They also put “Got Milk” on Girl Scout Cookies. They have even gotten their milk advertisements on cereal, cookies and chocolate mix packaging. Jeff Manning, executive director of the California Milk Processors Board, says, “We need those people to promote for us.” “In return, we affectionately call them co-dependent foods.”

Manning doesn’t stop there.  He convinced Dole Food Co. in Westlake Village, California to add another sticker on to their clusters of bananas for the retail market. You got it, “Got Milk” stickers. In 1997 Dole put “Got Milk” stickers on a million bunches of bananas. Milk is getting more interruptions in the minds of consumers. The more Partnering milk can do with products in other parts of the grocery stores, the more sales potential they enjoy. Dole even got an “ah ha” from the cross-promotion, they have been Partnering with Hollywood to promote new release movies such as Anastasia and Babe in the City.

Researching for a presentation for the National Home Furnishings Association, I discovered an interesting alliance in Northern California. They call themselves the Sonoma County Fine Furniture Association (SCFFA). What did they do? Eight fine furniture retailers, competitors, banded together to survive the recession of the early 1990s through cross-promotion and buying strength.

They bought advertising together on the local radio and in the local newspaper. They even dictated to the newspaper on which pages their advertising would be located. They developed combined events where customers would visit several of the stores to be eligible to win prizes. They promoted each other to their customers within the store, especially if the specific retailer did not have exactly what the customer was seeking. They even printed a combined brochure, including the address and map locations of each member. The front of the brochure said, People you can trust.  Wow, what impact!

On a United Airlines flight from Washington, D.C. to Atlanta, the cabin attendant handed me my usual bag of peanuts. But, what was unusual was the size of the bag and its weight. After closer examination, I noticed that an America Online (AOL) diskette was included with the peanuts. It made sense, a business route shuttle—what a great way to get the AOL software into the hands of business people.

Forest City, Iowa, recreational vehicle (RV) manufacturer, Winnebago Industries, Inc. (www.winnebagoind.com) with sales of $665 million in 1999 and Nebraska-based sportsman’s outfitter, Cabela’s have found synergies through reciprocal promotion activities. Cabala’s has provided an ideal venue in which Winnebago dealers have displayed their RVs in more than 30 outdoor events in 1999. Most, run by Cabela’s promotional arm, Sportsman’s Quest. Winnebago products were also displayed in Cabela’s catalogs. Winnebago, in turn displayed Cabela’s products at their events.

Strategic Alliances for Co-Branding

Bringing together more than one trusted and established brand name develop a marketing synergism that cannot be beat. The advertisement headline read, Bring The Magic of Mattel Home for the Holidays. Just under the headline were several foods producing toys offered. The hook was that it showed Golden Arches type food. Mattel had a relationship with McDonald’s. And, what quality parent would deny their child the opportunity to make their own McDonald’s hamburgers, fries, shakes and cookies at home?

Nestlé/Road Gold Flipz (chocolate covered pretzels), the synergy that can be developed by co-branding is awesome. Co-branded products have, at a minimum; twice the marketing impact and customer pull as traditional branding. Consumers believe that with two trusted names, the product must be exceptional. There was one problem with the Flip though. When they were first introduced, the consumers’ acceptance was so great that the distributors had trouble keeping their stores in stock.  What a problem to have . . .

In recent years the automotive industry has found value in Partnering with highly recognizable prestigious brands of clothing and accessories. Ford Motor Company partners with the successful catalog retailer, Eddie Bauer to offer luxurious editions of their popular sport utility vehicle models, Explorer and Expedition. As customers’ perception of quality and value can be influenced through these offerings, they are also willing to pay more for the perceived value.

Ford Motor Company states, in a June 29, 1999 Ford news release, its pleasure with its Eddie Bauer relationship in a news release. “Two of America’s most enduring brands reached a milestone today in their 17-year collaboration as Ford and Eddie Bauer celebrated production of the one millionth Eddie Bauer edition Ford vehicle at the St. Louis Assembly Plant, home of the Ford Explorer sport utility.”

“It’s almost uncanny how well-matched Ford and Eddie Bauer are,” says Ford Division Marketing Communications Manager Jan Klug. “Both companies have reputations built on an uncompromising commitment to quality, durability and customer satisfaction. For our customers, this means the irresistible combination of Ford’s ‘go anywhere’ capability and Eddie Bauer’s rugged style. For both companies, it means enhancing each other’s brand.”

“It’s no secret why Ford is setting industry records for SUV sales in a U.S. market that currently has 41 SUV nameplates,” says Explorer Brand Manager Doug Scott. “We are creating products that really excite the customer. And in partnering with Eddie Bauer, we are expanding the opportunities for the Explorer and Expedition to be a meaningful part of our customer’s active lifestyles.”

Because of Ford’s success in co-brand Partnering with Eddie Bauer, they are trying to duplicate their success with Harley-Davidson Motor Company, Milwaukee, Wisconsin in their limited edition Harley-Davidson F-150 pickup truck. The customized version is restyled, all-black, with distinctive Harley-Davidson orange pinstriping and chrome accessories.

“A strategic alliance between the Ford Motor Company and Harley-Davidson makes mutual historical and business sense,” noted Gurminder Bedi, vice president, Ford Truck Vehicle Center in a January 6, 2000 Ford news release. “Our common heritage as American motor vehicle manufacturers and our common centennials of 2003 were just too good to pass up as a natural business opportunity. “The partnership makes good business sense,” Bedi added. “The world recognizes both companies as original American innovators known for exciting, quality products.”

“This alliance brings together two of the most well-known and admired companies in the world,” said Jeff Bleustein in the same release, Harley-Davidson chairman and chief executive officer. “Ford and Harley-Davidson customers alike want a distinctive vehicle that makes a statement about themselves as individuals.”

Even in the recreational vehicle (RV) industry, a manufacturer sees marketing value in co-branding. Fleetwood Enterprises, Inc. in Riverside, California with $3.5 billion in sales in 1999, is in alliance with Bass Pro Shops Outdoor World. Fleetwood has enjoyed good sales volume in its private-label RV partnership with Missouri-based Tracker Marine LP and its Bass Pro Shops Outdoor World stores. Fleetwood built and branded with the Tracker and Trailstar name are sold in six Bass Pro Shops Outdoor World stores and 56 Tracker marine dealerships. RVs promoted at the Outdoor World stores sell for a single, non-negotiable price (unique to the RV industry) and can be purchased over the Internet. Models range from a Trailstar 8 folding trailer to the 29-foot Class C Trailstar RV.