Alliances Create Market Impact
Posted: 8/11/2014 by Norma Watenpaugh
Market Impact embraces those strategies that are aimed at growing the businesses of the allied partners. It includes strategies such as entering new markets, gaining a market share position, and generally expanding the capability to gain new customers. The top five selections of our best practices survey respondents in this category are depicted in the chart below:
New Customer Wins tops the list for creating market impact. This of course is tightly coupled to generating incremental revenue; new revenue that would otherwise not be easily accessible without the collaboration of the partner. Incremental revenue is often the result of marketing to your partner’s customer base with the endorsement of your partner, leveraging the credibility of their brand, their existing customer relationships and the value of a joint solution.
Market Share increase is perhaps a better measure of growth than new customer wins though it was selected by a lesser number of respondents. In fast growing markets, such as those occurring during a time of technology disruption, new customer acquisition rate can be misleading in terms of real market impact. If you are not growing the customer base faster than your competitors, then you are falling behind.
Access to New Markets is a strategy where alliance managers can most clearly demonstrate the value of their partnership. If you are entering a new market, then the starting point or baseline is often near zero. All new customers and new revenue can be attributed to the alliance. This is one of the conundrums of go-to-market alliances when they are directed toward established markets. They may be generating new business but it is often difficult to unwind their impact from that of business as usual.
Creates Credibility by Brand Association is a key and effective strategy that small companies or startups leverage when they partner with a market leader. Microsoft is an example of a strong brand partner that attracts many smaller players. If a small company can earn certifications in the Microsoft partner program, it can attract attention and gain credibility in its customer base by that association.
Vertical Market Penetration is similar to market share but targets specific industry verticals such as Healthcare, Finance, or Transporation. This is an important partnering strategy when an industry requires deep understanding of industry dynanics, business practices, regulatory issues and possibly industry specific solutions which are more easiliy addressed by partners who already have a strong presence in the targeted industry.