Tips For Developing Strategic Alliances

Are sales alliances successful?

Sales alliances are one of the new organisational answers to the increasingly difficult work of sales in the high tech field and other dynamic markets. This is an increasing area of interest for those attending leadership training courses.

Under the umbrella of an alliance, the field sales operations of two or more businesses co-operate as sales partners.

As you may well imagine, this kind of collaboration is not without its frictions. Whether or not it is successful in the long run depends on factors for which, on the one hand, the business and, on the other, the field salespeople are responsible.

A study of 175 field sales people has illuminated which problem areas need to be highlighted and where the pitfalls lie if an alliance is not to be doomed to failure.

At business level

The choice of the right partner, the timing of the alliance, the negotiated conditions, the development of a common culture and correct handling of sensitive information are absolutely decisive for success.

Difficulties also frequently arise when different sized businesses work together.

The sales leader of a small business clarifies the dilemma: "Especially as a small company we need to focus on our cash flows.

Our biggest cash flow problem is our partner who, as a point of procedure, only pays after 90 days."

A further problem with co-operations like this is the administrative burden that is normal for large companies. Small companies are not used to this 'paper mountain' and usually consider it unnecessary and unproductive.

The difference between the numbers of hierarchal levels in the field sales organisations of large and small companies has also proved a handicap.

One salesperson says on this subject: We are having to cope with so many people, levels of hierarchy and subsidiaries that on occasion, I am unsure as to who my partner actually is."

At employee level

With individual employees it is primarily a question of open, honest and trusting relationships between themselves.

In less successful alliances the field salespeople deliberately withhold information, blame each other for mistakes, doubt the competence and integrity of their colleagues in the partner company and publicly make negative comments about them. Therefore care management is required in these situations as covered on good leadership training courses.

Many salespeople report that they had to "test" several colleagues in the partner company until the chemistry was right. This demands a great deal of sensitivity from superiors concerned if they are to bring the right people together.

A hot topic is who, in the end, keeps control of a particular customer.

A voice from the study says on this point: "As salespeople of the old school we naturally want to keep control of 'our' customers and make it our own business to ensure that this customer is given optimum service. It is extremely difficult to relinquish this control. It means that I must trust my partner absolutely and in turn they must trust me absolutely."

The results shown in the following table show how the factors discussed have a practical effect on the success of a sales alliance.

The influence of the success factors was calculated using a seven point scale from 1 = is not applicable at all, to 7 = completely applies in all respects.

Influencing factor slight medium great

Mutual trust 4.05 4.80 5.67

Mutual independence 3.64 4.40 5.99

Good co-operation 2.96 4.58 5.32

Open communication 3.54 4.67 5.67

Common goals 2.82 3.44 4.11

Fit of field sales organisations 3.60 4.17 4.31

Open communication, mutual trust and perceived mutual independence are the success factors of a sales alliance. Yet again it is the human side and less the organisational side that counts!

Good leaders are required in order for an organisation to develop successfully an effective good strategic allegiance,. These skills can be developed with leadership training.