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When considering strategic alliances, it’s easy to come up with a bunch of retail partnerships that paid off in a big way. And that’s the point of the alliance: when people see or hear of one brand that stirs thoughts of the other. These strategic alliances work to both drive revenue and break into new markets.
But when software as a service (SaaS) is concerned, can a strategic alliance be as successful as a retail counterpart? In short, yes, and maybe even more so. Using strategic partnerships, you can reach a larger base of customers, achieve incremental growth, and gain an advantage over the competition as the partnership matures.
Reach New Customers
This one is easy enough to wrap your head around. Your product and marketing campaign has reached a defined subset of the population. You can adjust your marketing scope, but that will shift focus, and inevitably you’ll be missing out on prospects. When you form a strategic alliance, you’re not shifting marketing direction—you’re expanding it.
If you have former prospects who walked away from a deal due to a gap in your product, then a strategic alliance can help bridge that gap. Finding a partner that fills the gap can help create a well-rounded product group, and future prospects will feel satisfied that all of their needs are covered.
Breaking into new markets can cause a growth spurt, but when you want to maintain a steady level of growth, what’s the answer? Forming strategic alliances can also come in handy here.
A co-marketing arrangement in a strategic alliance can help increase revenue efficiency; that is, you’re earning more for every dollar spent. Finding a partner that can sustain your marketing efforts and provide leverage in its own customer base will help carry growth at a rate that will last indefinitely.
Of course, you can often attain rapid growth from entering a strategic alliance as well. It all depends on what your goals are for the alliance and what steps you take to head in either direction.
Outsmart the Competition
Your strategic alliances serve as an offensive position. At times, you might find the biggest advantage comes from being ahead of the competition. They cannot outmaneuver you in their target markets if you have beaten them to the punch.
If you can block a competitor from a certain market, that’s a considerable disadvantage for that competitor. It also becomes your advantage, as you create a relationship and build rapport with this new partner and their customers while your competition’s growth stagnates.
In this way, you might find that strategic alliances with other SaaS companies in your niche can help you gain that advantage. For example, if your company and your partner’s company have a similar offering, but your company buyer personas and price points differ, then you can effectively block any competitive threat from a third-party company that has to now compete against both of you.
Not every channel partner is a viable option for a strategic alliance. You need to find relationships where you have a specific goal that’s mutually beneficial and can see a pathway to achieving it. Maybe that goal is to break into a new market or to build a co-branding agreement with the channel partner. Consider your overarching goals for the alliance, then build out steps and smaller goals that will move you towards success.