Strategic Alliances By Paul Terlemezian June, 2010 iFive Alliances, LLC 404-252-8330 [email protected]

Strategic Alliances

By Paul Terlemezian June, 2010

iFive Alliances, LLChttp://ifivealliances.ning.com

404-252-8330

[email protected]

http://ifivealliances.ning.com/

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Which one do you want to hear about?

1. What’s a Strategic Alliance? (please ask for this one) 3

2. Differentiation via Alliances (Go to Market = Attitude; Imagination) 4,5,6

3. The Sixteen Types of Alliances and When to Use Them (Power = Choice; Impact) 7,8,9

4. The Eight Success Factors to Assure the Success of an Alliance (Tools = Confidence; Integrity) 10

5. The Six Methods of Finding the Best Alliance Partners for Your Business (Success = Execution; Implementation) 11,12,13,14,15,16,17

6. Alliances Business Plan (Accountability x Relevance = Sustainability; Income) 18

7. The Shortest Paths to Revenue via Alliances (Strategic Alliances = Revenue for All ) 19,20

8. Strategic Alliances and the Five Stages (Could be make or break) 21,22,23

9. Something not on this list (but related to alliances) 24,25

© 2003-2006 C-Level Enterprises, Inc. www.CLevelBootCamp.com 33

Strategic AlliancesOther Party Interest

Decision Role Position

Product

(traditional)

Price Dependable Good Defense

Process

(consultative)

Total Cost Consultant Great Defense

New Value

(collaborative)

Profit Expert Good Offense

Added Value and Awareness

(strategic)

Differentiation Market Maker Great Offense

Copyright 2010 iFive Alliances, LLC


Differentiation

1. Capabilities

2. Risk Mitigation

3. Terms and Conditions

4. Convenience

5. Intangibles

6. Price


Getting Your Foot in the DoorWhich Door? Three Choices

• Front Door – Use this door only if you have a 3 to1 advantage over your competitors.

• Side Door – Use this door if you can find a company that is already doing business with your prospect and that is willing to partner with you on a new opportunity. You combine to create a 3 to 1 advantage.

• Back Door – Use this door if you can find a company that is already doing business with your prospect that is willing to include your offering as part of their existing offering.

Differentiation Model

Prospect Your Offering

Installed Competitor

Potential Competitor

Prospect Expressed Interest

Capabilities

Risk Mitigation

Terms and Conditions

Convenience

Intangibles

Price

Copyright 2007, iFive Alliances, LLC


Sixteen Types of Alliances

1. Awareness2. Added Value

4 TypesAwareness Value Add & awareness

Value Add



Control

Investment

Awareness

Added Value

Value Add & Awareness



Control

Awareness

AGENT

Value add & awareness

VAR

Awareness

DIRECT


ACQUISITION

COLLABORATION

Value add

SELLING

PARTNER

INTERNET

Value add

JOINT VENTURE

Investment Awareness

SPONSOR


INTEGRATOR

Awareness

RETAIL


FRANCHISE

LEAD SOURCE

Value add

CONSORTIUM

DISTRIBUTOR

Value add

OEM

Copyright 2004, iFive Alliances, LLC


The Eight Success FactorsTrusted Partners, Jordan D. Lewis

1. A priority mutual need exists2. Interpersonal relationships are established and

maintained3. Top executives are visibly working closely together4. Mutually agreed upon objectives guide the alliance5. Safeguards are openly discussed and implemented6. Commitment is demonstrated via people

assignments, policies and resources 7. Both organizations are willing to evolve for the

benefit of the alliance8. The continuity of the alliance is evident to both

organizations and their clients


Six Methods for Finding Alliance Partners

1. Compelling Events (Triggers)

2. Discipline of Market Leaders

3. Whole Product

4. Customer Learning Curve

5. Segmentation

6. Good to GreatCopyright 2004, iFive Alliances LLC


Compelling Events (Triggers)

Many buying events are “triggered” by an event of strategic importance within the buying organization. The sellers ability to associate their solution to this strategic event elevates the importance of their solution and their value to the client. These “compelling events” are related to business goals and spawn initiatives. When there is a gap between the buyer’s capability to successfully accomplish the initiative there is a selling opportunity.

Common Examples: Mergers; OSHA Violations; SOX; Employee surveys; Industry surveys


Discipline of Market Leaders, Treacy and Wiersema

In Discipline of Market Leaders, Treacy and Wiersema document their research showing that successful enterprises make a choice about how to define the strategic value of their products and services. There are three choices:

1. Operational Excellence – the lowest cost, most readily available product

Common Examples: Wal-Mart, Costco, MacDonald’s

2. Product Leadership – Simply the bestCommon Example: Intel

3. Customer Intimacy – The best for you, dear customerCommon Example: Ritz-Carlton


Whole Product

In Crossing the Chasm, Geoffrey Moore writes: “There is a gap between the marketing promise made to the customer – and the ability of the shipped product to fulfill that promise. For that gap to be overcome, the product must be augmented by a variety of services and ancillary products to become the whole product.”

Common Examples: Computer with monitor, keyboard, mouse, software, internet access and training; Housekeeper with supplies, mops and vacuum


Customer Learning Curve (CLC)

In The Customer Learning Curve, Hellman and Burst focus on the customer’s process of learning about, deciding to buy, purchasing, experiencing success and continuing to buy from their provider. Each of the eight steps in the CLC (Need, Awareness, Access, Motivation, Purchase, Use, Value, Loyalty) provides an opportunity to expand the methods with which you can find new customers for your existing products.


Customer Bonding

Jan Smith and Richard Cross provide a framework for new ideas in Customer Bonding.

•Awareness

•Identity

•Relationship

•Community

•Advocacy

Common Examples: Frequent Flyer programs; Cellular phone plans with free in-network calls


Segmentation

A marketing strategy in which a large, heterogeneous market is broken down into small, more homogeneous segments and a separate marketing program is developed for each segment. (Measurable, large enough, reachable, responsive, stability). Segments may be defined by geography, economic factors, existing loyalties, industry, company size, intended use of product etc.

Common Examples: Coca-Cola market its products to consumers differently from the way that it markets it to Fast Food Chains (intended use of product)


Alliances Business Plan

1. Goal (How much revenue and in what defined interval)

2. Strategy (How it will be accomplished)3. Success Factors (From Jordan Lewis)4. Tactics (Three to Five per Success Factor)5. Responsibility (Who will execute each tactic)6. Measurement (Include intervals and review

meetings with predefined dates and agenda)7. Rewards (Commissions, Co-ops, Overrides,

Tangibles)8. Contingency Plan (If… then… predetermined)


The Shortest Paths to Revenue via Alliances

1. Improve existing alliances

2. Develop an existing client into an alliance

3. Develop a provider to an existing client into an alliance

4. Create new alliances


Lead Map

• Clients – List and measure lead sources• Prospects – List and measure lead sources• Correlate the lists• Identify discrepancies• Make investment decisions• Execute consistently• Review and revise if needed


Five Stages Experience

Raw Startup: iFive Alliances as well as several current clients

Early Revenue: Caliber; Media1st; iLearning; Achievement Plus; Several current clients

Established: Catapult; KnowledgeWare: Several current clients

Growth Expansion: Digital Educational Services Southern Region (also TOPS-20, VMS): Several current clients

Mature: Digital Educational Services Northeast Region (also TOPS-10): Several current clients


Five Stages and Alliances

Raw Startup Speak with laggards (skeptics) to find out what you are doing wrong and then fix it. Everyone else may be too committed (early majority), too polite (late majority), too busy (early adopters) or too enthusiastic (innovators).

Partner with innovators because they will help you find the early adopters. Fill gaps for Established, Expansion or Mature.

Early Revenue Most of the time is spent with innovators and early adopters to earn revenue. Learn from your mistakes and continue to spend some time with skeptics for the same reason as above. Fill gaps for Established, Expansion or Mature.

Established Customer base

Build productive alliances selectively. You cannot afford the risk of wasted effort and messing up your branding.

Expansion/ Growth

Build alliances with a fervor approaching “reckless abandon.” You are riding the crest of your brand - enjoy it and extend it.

Mature (or large)

Be more selective and exclusive with your alliances. You need to protect profit and brand.


The Tools = ModelsTool Benefit

1. Lead Map Assess, Focus and Improve your most profitable sources of leads

2. Differentiation Gain competitive advantage by filling gaps with alliances

3. Alliances Map Determine an alliances focus that fits your investment and control requirements

4. Success Factors Diagnose the health of alliances

5. Methods and Stages Build the right alliance at the right time

6. Alliances Business Plan Manage the alliance implementation


Paul Terlemezian, Founder of iFive Alliances, LLC - 2003

• 2008 President ASTD Atlanta (American Society for Training and Development)

• 2010 Leadership Council Chair TAG (Technology Association of Georgia)

• 2008-2010 Founder and Chair TAG WLS (WorkPlace Learning Society

• 2010 Board Member TAG Corporate Development Society –

• 2010 Acting President and 2006-2010 Affiliate Chair – Southeast Chapter ASAP (Association of Strategic Alliance Professionals)

•2010 Candidate - Drucker Society of Georgia

• Guest Speaker on the topic of Alliances - Atlanta IT Alliance, Institute of Management Consultants, Vistage, TAG (Managing Your Business as an Asset), GWBC (Greater Women’s Business Council), ESMA (Executive Sales and Marketing Association), Southeast Software Association

• DEC, IBM (Catapult Division), KnowledgeWare (Sterling Software), Caliber, Media1st, iLearning

Summary Background

Documents

Strategic Alliances By Paul Terlemezian June, 2010 iFive Alliances, LLC 404-252-8330 [email protected]