Joint Ventures, Affinity Marketing, Strategic Alliances, and Fusion Marketing – Is it Right For You?

Wow, those are a lot of words to consider all at once. They really have a lot in common, so let’s break this down and take a look at what it can mean to you, the small business owner.

Online marketers are very familiar with the term joint venture. Offline marketers are more familiar with the term “strategic alliance,” or “affinity marketing.” Fusion marketing may be a new term for both arenas.

In online marketing, a joint venture is when two people who usually have skills or products of equal value, create a product together and sell using both mailing lists. This sort of thing requires some real planning and special considerations such as who will handle the money, etc. I wouldn’t recommend doing it without some instruction from someone much more skilled than I am.

As far as offline marketing, consider this scenario: You move to a new city. As soon as you’re unpacked, you get a notice in the mail from a major retailer, welcoming you to the neighborhood and giving you a discount coupon. You scratch your head – how did this major retailer get this information? Did you accidentally send them a change of address? But wait – what’s this in today’s mail? It’s a change of address confirmation from the United States Post Office. Is this coincidental? No, of course not. The government and this major retailer have what we call a “fusion marketing” relationship. It’s really just a fancy name for a strategic alliance. Webster’s Dictionary says this about a strategic alliance: “…a merging of diverse, distinct and separate elements into a unified whole.” If you do this with a business relationship, it’s more aptly called fusion marketing.

Fusion marketing works best when the target markets are similar. Let’s look at some examples of fusion marketing for “bricks and mortar” businesses.

  • If you own a printing company, a graphic designer would be a great team.
  • An architect could work with a construction firm.
  • Here’s a classic – realtors and mortgage brokers.
  • How about a travel agency and a local resort? (or even a large hotel chain)
  • A local telephone hardware vendor with a Music & Messages On Hold studio.
  • An interior designer and a custom cabinet or furniture designer.

Are you beginning to see the picture? The only limit to the fusion markting possibilities is your imagination. It could be something as simple as your local eatery offering coupons at the cash register for the florist two doors down. I believe every business will find that strategic alliances, affinity marketing or fusion marketing is right for them. Of course, all this starts with networking in your community. I have prepared a special gift for you if you would care to learn more on this subject. Just click on Make Referrals Work and receive some high-quality training videos at no cost to you.

The Lone Ranger Forms Alliances to Do Business Today

“The Lone Ranger is dead.” Jan walked out of the room and I paused to consider that she’d labeled me as an uncooperative maverick. Her impassioned plea for me to consider doing business differently focused on the fact that tighter and closer relationships can ensure continued growth.

Like many Boomers, I enrolled in The School of Hard Knocks. Throughout my career, as an employer, employee, owner or partner, I integrated lessons and focused on improving my game without giving much thought to alliances.

“A strong alliance is greater than the sum of its individual parts,” Jan said. Alliances offer a way for sole proprietors to grow quickly, I reflected. For example, networks can frequently be building blocks for future alliances because they expose you to market or product opportunities you wouldn’t ordinarily encounter.

A networking alliance such as Business Networking International (BNI), encourages formalized referrals within its membership. Other networks such as Costco, offer member discounts on operational costs such as insurance, shipping or office supplies. Other networking alliances easily encountered include involvement in neighborhood associations, trade associations, local community/state meetings or forums and continual contact with a set of core, industry professionals.

The alliance you form could be simple; get your landlord to display information about your business to augment your marketing plan. Or, you might offer a coupon/membership discount for the purpose of encouraging referrals. Think about a professional network to which you belong or would like to belong. Consider the real benefits that you might garner from the relationship.

Is there information you need regarding political or legal issues? Does your business need exposure to market or product opportunities? One small manufacturing operation had the opportunity to be part of a national trade show at a fraction of the cost as a result of state alliance that they formed. Those leads developed into additional sales and new profits.

Alliance structures can range from the informal to the structured and complex. Fed Ex/Kinkos, for example, took product delivery teamwork to a new level with the most aggressive of alliances, a merger and acquisition.

A coop alliance lets two or more firms share in the distribution/marketing costs of each others products or the purchases of commonly used resources. Val Pak coupons are a form of co-op direct mailing.

In the last decade, supplier alliances have become increasingly critical to sustainable business growth. Depending on the firm, a supplier alliance can take the form of a strategic long term contract, a joint venture or a partnership. In either structure, interdependence between firms is created and both the firm and the supplier seek methods to maintain or enlarge market share, improve product offering and respond to market changes.

I returned to reality with a start. It was suddenly clear to me that no matter what type of alliance formed, a successful alliance requires hard work, continuing analysis of goals and marketplace conditions, ongoing and timely communication, resource allocation and a sincere commitment to a win/win outcome.

I smiled to myself as I assigned the Long Ranger the job of staying informed on the alliances that could best serve me going forward.

Growing Your Small Business Through Alliances and Joint Ventures

— Beyond Cold Calling, “Warm” Calling and Sending E-mails —

Many Solo Entrepreneurs work from a home office. Our only connections to the outside world are the internet / e-mail and the telephone. Cold calling, “warm” calling and sending e-mails may seem like the most obvious way to let people know about us and to generate sales. But, there’s another way that works even better.

An alliance is usually an agreement between two businesses whose services or products compliment each other. Each agrees to recommend the other’s services to their respective clients and to pay a percentage to the other if the referral results in paying work. Let’s say you’re a marketing expert, but you don’t do public relations. However, sometimes your clients require public relations as part of their marketing strategy. You meet with several public relations experts who specialize in different fields, but who don’t offer your type of marketing services, and you form 3 alliances. A 10% commission is what you agree on for mutual referrals that result in work. Now, both you and your alliance partners are more “full service” providers. You can offer PR services to your clients and your partners can offer marketing services to theirs through you. In addition you could add them as “partners” on your website, giving your company the advantage and versatility of an expert team. It’s a win – win situation.

A joint venture is formed when you not only have an alliance but you come up with a strategy to find customers together. Suppose you make custom window treatments. You decide to speak to a local fabric shop that specializes in upholstery and window fabric. If you could be their exclusive referral for customers that need someone to make their fabric into beautiful draperies, and you are willing to pay them a commission for each referral, what happens? They can say they now offer a new value-added service to their customers, which may mean a customer chooses their store above another. You have a steady source of customers. You may even get them to display some of your draperies made with their fabric in your store. They agree to allow you to advertise in their store, perhaps even offer a workshop, and you’ll recommend them exclusively to your clients. You may even advertise together. The possibilities are limitless.

There are numerous ways to put together alliances and joint ventures. Thinking outside the box and being clear about what benefits both parties would receive are essential. As always, getting the agreement in writing is a good idea, as is being sure the person you’re dealing with is honorable and reliable. And try to discover ALL the alliance possibilities that exist for your business. Our custom window treatment business owner above could also contact interior designers, furniture stores, residential real estate agents, home builders sales offices and even paint stores. So, what are you waiting for? Start today by:

— Making a list of at least 5 prospective alliance partners.

— Making a list of 5 ways the alliance would benefit them and you.

— Making a list of 5 ways you could implement the alliance.
start making contact!

One Final Note – some people have asked whether or not to disclose the partnership to the client. Sometimes it’s obvious that you are referring a client to your alliance partner, as in the case of the drapery maker and the fabric store. If it’s not so apparent, you may want to simply inform your client that you will be working with your alliance partner who is an expert in their field. For the sake of consistency, how much to explain to a client is something that you and your partner should agree upon up front.

Copyright 2003, Janis Pettit