Affiliations with other small businesses - how, who & where!?

[benmay100]

Hi All,

This is my first post, so please excuse me if a post like this already exists.

I am 23 and last year I started my own online Life Insurance comparison business, we have had varying degrees of successes and struggles but generally it's been an uphill battle (as I'm sure any new business is!).

One thing I have been told countless times is that small companies can grow through setting up introducer agreements, and affiliations with other companies who may be similar to them (but not necessarily a competitor).

E.g. Team up with a travel insurance broker and advertise eachother's services to eachother's clients at a discounted rate

I can see this sort of thing working in theory, however in practice have found it really difficult for the following reasons:

• Making the initial introduction with like-minded companies is difficult
• Establishing trust with other companies you don't know is time consuming
• There doesn't seem to be a destination where small businesses who want to collaborate can go to

My questions are:

1. Does anyone know of a destination (eg. Website) where small business go to collaborate and work together? (could be client sharing/mutual marketing/sharing office space/people etc)
2. Am I being naive and really collaboration and working together isn't something small businesses really want to do?


Thanks in advance

Ben

 

[ethical PR]

I haven't heard of one .

Have you got a marketing plan in place and if so what does your research show you as being the best routes to market.

Are you B2C if so do you have an understanding of your target audiences and their consumer habits and marketing channels?

It might be that you will benefit from using third party marketing but without knowing more about your target audiences and product it's hard to tell.

 

[benmay100]

Thanks for your reply,

We do have a marketing plan (it does evolve and change as we go along admittedly). Our main route to market is currently Google Ad-words (we tend to get ourselves pretty close to the top on this) but it is very competitive, quite expensive, and of course, there are limits to how many people are actively searching your product on Google each day.

We have had success in the past with one company who we affiliated with and cross-sold to their clients and shared the revenues (they were a travel insurance broker) and I feel like there must be thousands of other companies like them out there.

I just wonder, there must be loads of small companies who could benefit by affiliating like this, but there doesn't seem to be an easy way to do it.

I wonder whether its worth trying to create a site where businesses who want to collaborate and cross sell can come together and do so with relatively safety & trust?

Ben

 

[stevebrownlie]

Hi Ben,

When you have a very specific target type of business to partner with, one of the best routes to them can be via LinkedIn research. It'll let you find the specific individuals who would discuss such partnerships and reach out to them (usually you can find their 'off linkedin contact details through some research and this will come across as more professional than sending them a sentence in the 'connect' box, for example). It's surprisingly effective if there are enough targets to reach out to 50 firms, I'd say you could expect 4-5 to end up formally meeting you which could result in some of the partnerships you seek.

You're about to fight in a very competitive space so I'm optimistic that you're thinking strategically about how to grow as some of the easiest routes to market (adwords/seo etc) are about to be cannibalised by Google themselves as they bring out more and more of their own comparison products. At the end of the day they can make 'all' the money that way so losing advertisers doesn't even concern them.

Of course, your risk is mitigated by the more aggressive regulatory environment for Google in the EU where prioritising their own comparison and affiliate brands over competitor businesses like yours may become impossible for them in time, but as you rightly point out becoming completely dependent on Google would not be safe in the long run for your business.

Cheers,
Steve

 

[benmay100]

Hi Steve

Thanks for the reply. That's interesting that you successfully use Linkedin to make business introductions. I always imagined that would be difficult and come across a little "salesy" (excuse the terrible use of the English language there)

I wonder, do you think looking for collaborations with other similar but non-competing businesses is a worthwhile pursuit? Or an ineffective use of time?

Ben

 

[Tim Coulter]

I wonder, do you think looking for collaborations with other similar but non-competing businesses is a worthwhile pursuit? Or an ineffective use of time?

Hi Ben,

It's a worthwhile pursuit if your business model allows enough margin to make them an attractive proposition and especially if you can present it in a way that is also strategically valuable to your prospective partners. In other words, very few serious business owners will want to get distracted earning commission from you when they could be focusing their effort on their own core business. But, if your proposition can be structured to directly support their core business, they may be interested. One obvious way is swapping leads (in some form or other), but this will only be possible if you already have a sizable list of qualified leads that match the targeting of your prospective partners.

 

[AllUpHere]

By far the most important aspect of such deals is that they need to be mutually beneficial.

99% of my work comes from such deals, but that's because my alliance partners know that they make more money with me than without me. As a marketing consultant with very specific skills and knowledge, I have many web designers, graphic designers and other such pro's who insist their clients speak to me before they carry out any work for them. This not only adds value to the end client, but has many advantages for my alliance partners. I've actually got a list of the advantages I bring to anyone wanting to partner with me on my website. The deals work because they are valuable for all parties involved, and are greater than the sum of their parts.

If you are struggling to form strategic alliances I'd suggest you aren't being perceived as bringing enough value to the table.

 

[benmay100]

Hi AllUpHere,

Thanks for the reply - really helpful.

What I am struggling with more than anything is actually getting in front of potential business allies.
Where do you find them other than just manually searching and.... let's be honest, cold calling/emailing them?

If the connections don't exist organically then it seems quite a struggle to actually make them.
Perhaps the cold approach is the only way, but just has to be done with a great proposition as Tim mentioned in the post above? (thanks for the reply as well Tim)

Best

Ben

 

[AllUpHere]

It's why 'in the trade' we refer to stakeholder marketing more and more.

Promotional marketing doesn't need to be about promoting your services to potential clients, promoting yourself to potential strategic alliance partners is exactly the same thing, but is very often overlooked. It's not dissimilar to more traditional types of promotional marketing and advertising though. You work out the wants and needs of the potential target, work out how you can best develop your business to meet those needs, then work out the best communication channel to tell your targets about what you offer. There is no quick fix, unless you happen to know a group of industry influencers.

 

[benmay100]

Thanks for the reply again,

I find it really quite interesting that there are thousands of small businesses battling away each day (usually spending lots of money in the process) trying to grow/build their own 'clientbase' when actually if they collaborated with each-other and cross marketed to each-other's clients in mutual arrangements then in theory they could help each-other grow.

It might be a bit of a 'utopian' way to think, but are lots of small businesses missing a trick here?

They can build their client bases by working with other businesses, and at the same time offer their existing clients other goods & services at a discount (from the companies they have allied with)

The internet seems littered with articles by people saying how important business collaboration is for small businesses etc .... but it seems to me that very few actually do it?

Ben

 

[AllUpHere]

It might be a bit of a 'utopian' way to think, but are lots of small businesses missing a trick here?

Ben

Yes, but don't shout about it. Not only is it how I get most of my work, it's also a fairly big part of what I do for clients.