This month I wanted to discuss strategic alliances as a strategy for broadening your practice capabilities and potentially changing your business model. In an ideal world, a strategic alliance will permit you to enhance your value proposition and your client offering without having to build or buy the resources, skills, and capabilities. Are any of you contemplating an alliance right now? It seems like it is a timely topic and that it’s prudent to at least consider an alliance as an option.
In theory, an ideal alliance partner might provide one or more of the following:
- Synergistic products (or services)
- Insurance carrier relationships
- Expertise that is complementary and not redundant
- Technology resources
- New target markets
- Additional sales channels
So it really depends upon your current capabilities and your honest perception of the gaps in skills or expertise inherent in your business. The ideal candidate would have virtually no overlap with your capabilities and would not be a potential competitor. If they are a friendly competitor in some manner, then the element of trust would take on even greater significance.
And it also depends upon what you want to accomplish with the partnering relationship. Do you want to acquire new skills or management depth? Or is there a synergistic product set that many of your clients need that you cannot currently provide? Can you and the partner create some “break-through” offering that will differentiate your businesses and be compelling to a target audience? Will the relationship improve operational efficiencies, profitability, or sales revenues? Depending upon the answers to these questions the characteristics of the ideal alliance partner could vary widely.
I’d like to hear from those of you in the comments that have gone down this path already or that are contemplating it right now. What motivated you to consider a strategic alliance in the first place? Who did you partner with? A P&C firm? Another benefits advisor? An accounting practice? And what pitfalls did you encounter? What were the lessons learned? Perhaps most of all, did you achieve the results you expected and would you do it again? I think all of us would benefit from any commentary.
Many benefits advisors are grappling with how to morph their business model to adapt to the dynamic and challenging market conditions that we are experiencing.
Beattie is president and chief executive of South Miami, Fla.-based Selden Beattie Benefit Advisors. She can be reached at 305-661-9090 or email@example.com.
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