Understanding the Benefits And Challenges Of Alliance Marketing
Over time and throughout history, the major business that survives and those businesses that are built around a group of individuals, who are able to create an opportunity for others.
Alliance Marketing is a simple term that can also be seen as Franchise Marketing. It happens when a business decides to give its franchise to another organization, or a franchise has the permission to sell its products on their behalf. In this case, the Franchisor ensures that he has all it takes to market the product successfully.
According to research carried out by B2B Technology Marketing Community, it was revealed that:
- 62% of respondents want to increase the number of partners they will work with within the New Year.
- The top goal of alliance marketing is revenue generation, demand generation, and general sales engagement.
- Most organizations spend between 10-20% of their marketing budget on Alliance marketing.
- Alliance marketers cannot do everything alone. Over the next few years, they will have to outsource production, event planning/execution, and lead generation among others.
Other Major Benefits
There are many benefits that come with franchise marketing. Some of these benefits include:
- Creativity
- Identical interest
- Access to supplementary services
- Brand awareness
- New customer base
#1 Creativity
When it comes to finding alliances and developing Alliance marketing, there is a need for business funding partners to be creative in their approach. The creativity of the promoter organization will allow them to attract the right organizations that are looking for products to market.
This will increase mutual benefits among partners. It will also allow the organization to increase its brand awareness and capital without expanding extra time. Also, this does not also increase the financial burden for the awarding organization.
#2 Identical Interest
Also, when you are about to launch out your franchise, you have to take time to study the market. You must be able to choose a market that offers identical but complementary services.
A food and beverage production company can choose another provision store and work out a franchise agreement with them. This will assist them in marketing their products so that they can reach their target audience along the line.
The main thing here is that the two organizations must be serving people of common interest. This will ensure that their goals are aligned at the end of the day. This will also reduce the turnover time it takes to train the new organization.
#3 Access to Supplementary Services
Another benefit of Alliance marketing to participants is that it will increase access to supplementary services. There are times that you have to take some steps such as going into an alliance in order not to lose your primary focus.
Take, for example, you are producing cars and your immediate focus is to reach the Indian market with durable cars. If an opportunity comes in Africa for example, you can decide to partner with another auto manufacturer in Africa in order to explore that opportunity.
Traditionally, we have seen bread sellers or bean sellers moving together because definitely, whoever is buying bread might also need beans. This allows organizations to enjoy a sort of comparative cost advantage. Just like I said, it can also happen when a manufacturer decides to sell his distribution franchise to another organization that can do it better.
#4 Brand Awareness
There are times that entering into a Marketing Alliance franchise will also increase brand awareness for products. If some organizations do not take practical steps to sell their franchise to other markets that are not within their region, they will not be known beyond their immediate environments.
I have seen IT companies such as New Horizons United States selling their franchise to other IT companies in other parts of the world. This has increased the popularity of their brand across the world.
#3 New Customer Base
Alliance Marketing can also assist organizations in accessing a new customer base. This will allow customers that could not originally have access to their product to be able to buy such products. This will definitely increase the revenue base of the organization.
Some of the Challenges of Marketing Alliance
There are some challenges that come with this type of franchise arrangement. Some of these challenges include:
- Choosing the right partner
- Upholding trust and honesty
- Re-assessing changes
- Lack of visibility
- Lack of influence over marketing
#1 Choosing the Right Partner
There are many brands today that are practically dead. This is because they decided to choose wrongly. Some of the organizations that launch their franchise fail to set the standard that businesses joining them will follow.
This mistake has practically killed their budding business. This is due to the fact that some of the franchisees failed to uphold standards. A typical example is Mr. Biggs. The establishment as a food chain restaurant failed because there is no uniformity in their restaurant services.
#2 Upholding Trust and Honesty
Also, there are some franchises that choose the right partners but some of the Franchisees failed their parent organization(s) over time. This is because the franchisees could not uphold the trust reposed in them.
That is why most times, the franchisor needs to be strict. They have to be checking whether the franchisee is still following the rules or not. If not, appropriate sanctions should be meted out to them.
#3 Reassessment Challenge
As an organization planning to launch out into a franchise, you need to do your homework very well. Some organizations do not have Quality Control in place. Quality Control as a tool will specify the interval at which all the franchisees will be evaluated in order to determine the way forward for the organization. This must be done on a regular basis.
#4 Lack of Visibility
There are employees from the organization who are always saddled with the responsibility of recruiting franchisees and expanding the business. Along the line, they become less visible and the new salespeople take all the credit for the sales. In order to avoid these, the Alliance Manager has to make sure that they own the process. Owning and managing this process from the beginning to the end will ensure that the promoters are visible from the beginning to the end of the process.
#5 Lack of Influence Over Marketing
Another major challenge with Alliance Marketing is that the parent organization does not have power over the marketing of the products. This at times can lead to a situation where products are wrongly portrayed to end-users. It may lead to a situation where the mistake of one franchisee robs other organizations that are part of the franchise as well.
Wrapping Up
In this article, I have taken time to look at what franchise marketing is, its benefits, and some of the challenges that are associated with this form of marketing which allows organizations to expand their sales team beyond their immediate environment.
Above all when you are planning to launch this form of marketing, you need to make sure that you have done your assignment very well. You have to draw out the blueprints and ensure that your franchise is not given to the wrong organization.
This will help you to maintain the sustainability and growth of the organization. It will also ensure that you achieve the purpose of the franchise at the end of the day.