How To Develop Effective Strategic Alliances

When sales alliances are successful

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

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

As you may well imagine, this kind of association is not without its frictions.  Its success in the long run depends on factors for which, on the one hand, the business and, on the other, the field sales people 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

Absolutely vital for success are the choices of the timing of the alliance, the negotiated conditions, the right partner, the development of a common culture and correct handling of sensitive information.

Difficulties frequently arise when businesses of different sizes work together.  

The sales leader of a small business clarifies the dilemma: “As a small company we have to pay attention to our cash flows. Our biggest cash flow problem is our partner who, as a point of modus operandi, only pays after 90 days.”

An additional problem with this sort of co-operation is the administrative burden that is considered 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 proven to be 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 first and foremost a question of open, honest and trusting relationships between themselves. In less successful alliances the field sales people intentionally withhold information, blame each other for mistakes, doubt the competency and integrity of their colleagues in the partner company and publicly make negative comments about them. Therefore as covered on good leadership training courses care management is mandatory in these situations.   

Many sales people report that they had to “trial” several colleagues within 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 keeps control of a particular customer in the end.  

A voice from the study says on this point: “As sales people 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 following table show the results of how the factors discussed have a practical effect on the success of a sales alliance.  

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

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. Leadership training can help these skills to be developed. 

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