"Creating a strategic alliance can significantly leverage your practice by opening doors, building trust and creating new business opportunities."

Building a Profitable Strategic Alliance, Step by Step

By John Bowen

Creating a strategic alliance with other professionals can leverage your practice significantly by effectively opening doors, building trust and creating new business opportunities for you. To build a strategic alliance that is synergistic and mutually beneficial, you must focus on being perceived as a partner, helping the other professional, such as CPA, attorney or insurance professional, to be hugely successful as they bring substantial value to you.

We have identified five steps to developing a successful strategic alliance:

Step 1. Formulate and prepare. Prepare a list of professionals that market to your target market and have complimentary offerings. Start with the firms you are currently working with, or who are targeting you in their marketing campaigns. These might be excellent partners. Identify the most senior executives that will value your relationship, understand your market and be in a position to create a strategic alliance between firms.

Step 2. Make the call. Contact the potential strategic partner and set up an appointment to discuss joint opportunities. Explore how strategic alliances might be mutually beneficial. Our experience has been that almost every time we've called a targeted firm, they've wanted to get together. Why? They need help with business development. When they hear you are in the process of exploring strategic alliances and you're interviewing three or four firms to identify potential partners, they will want to meet with you.

Step 3. Arrange a meeting. Take a few moments to introduce yourself. Immediately shift the conversation to their concerns and how an alliance might address them. Even if you see opportunities, don't move on them immediately. Go slow and create a larger opportunity. Take notes. Share with them what marketing research suggests are their challenges.

Ask how the firm currently addresses each of the following challenges:

• The liability of working with any financial advisor strategic partner
• Developing new client relationships
• Creating new revenue from existing clients
• Retaining existing clients
• Maximizing client benefits

Tell the senior executive that you'd like to set up a second meeting to brainstorm ideas about how you might work together. If working with this firm seems like an exciting opportunity, explain the next two steps to them. If it doesn't, thank them for their time, ask for their business cards for potential future contact and move on.

Step 4. Explore the market. Discover shared opportunities, goals and expectations for the future. You should allocate at least an hour each month to explore your mutual expectations from the strategic alliance for the next twelve months. Compare your respective visions for how you might accomplish your mutual expectations. You'll want to have stimulating and open-ended questions prepared—and you should listen carefully. You will be judged by the quality of the questions you ask. Take detailed notes of all the points discussed in the meeting. If the meeting is successful and you want to pursue this partnership, set up a third meeting where you will present a plan to maximize the opportunity to work together.

Step 5. Draw up the plan. Prior to this third meeting, you'll have reviewed all the notes from previous meetings and written up a marketing action plan delineating ideal and minimum goals for this strategic alliance. First, identify the ideal amount of assets you would like to acquire over the next twelve months and the minimum amount you must reach in order to continue. Identify how each party will benefit by reaching the goals. By setting goals, you will be able to focus better on working together effectively. Then, write up the strategy and execute. In any joint marketing project, it's unlikely you'll have huge success the first time. You'll need a year-long plan, but be ready to make adjustments as you receive market feedback.

Reprinted from: FINANCIAL PLANNING