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Why Strategic Alliances Are Essential Parts of Your Ecosystem in 2023

These kinds of partnerships are the cornerstone of your ecosystem.

Strategic alliances. They're all the buzz, but what are they? How do you take advantage of their potential? 

B2B SaaS companies running partner programs probably hear “strategic alliances” tossed around all the time. That’s because to some, “alliances are no more than fleeting encounters, lasting only as long as it takes one partner to establish a beachhead in a new market,” while “others are the prelude to a full merger of two or more companies’ technologies and capabilities,” as stated by Rosabeth Moss Kanter in the Harvard Business Review.

The tricky part is that most of the time, strategic alliances fall right in the middle. They’re joint ventures that are so important, you need them in your ecosystem to truly take advantage of the full potential of partnerships. They’re relationships that offer invaluable growth and insights, and they’re worth the legwork required to align on products, marketing, KPIs, objectives, and all other facets of them. Bottom line: they’re essential, and understanding what they are is the first step to creating them. If you’re struggling to understand what constitutes a strategic alliance and what doesn’t, then let’s get into it. Keep reading to uncover why strategic alliances are essential parts of your ecosystem in 2023 and beyond. 

So, what is a strategic alliance?

In business, an alliance occurs when two companies work together on mutually beneficial projects. These agreements are also called strategic alliances and they usually involve cooperation in the development, creation, marketing, and sale of products, services, or other objectives. Alliance partners align on core competencies and business strategy and pool resources to reach shared goals.

Alliances really are a type of strategic partnership, a relationship between two entities (most commonly two companies) with overlapping or complementary products or services that aim to achieve a mutually beneficial result. The main difference between these two is the cooperation and collaboration across the board, whether that’s marketing, sales, or other business unit functions. Alliances, although broad in nature, are really focused on working together to achieve mutually beneficial outcomes, which often comes by way of net new revenue or business channels. They offer a competitive advantage in any market when well-run.

Alliances require alignment on some important factors before they’re undertaken: the involved businesses' customer profiles, their products and how they complement yours, their resources, their marketing practices, and the overlap in your long-term aspirations. Since they’re the most involved kind of partnership, a thorough understanding of what a potential alliance can offer you (and vice versa) and what your shared goals are is important to establish.

Related: Channel sales vs. direct sales: what's the difference?

a hand holding a puzzle piece with the words "referral, reseller, affiliate" overlaid

Are alliances just technology partnerships?

Quick answer: alliances aren’t just technology partnerships, but they can be. Technology partnerships focus on developing integrations and sharing data and insights that ultimately help the customer. When building a successful strategic alliance, data should be at the core — there should always be considerations and assessments based around metrics. That being said, alliances are much broader and cover so much more than just a technology partnership because they don’t rely on just integrations alone. There’s a shared effort from the ideation stage of a new product or service all the way to its execution and beyond, making a strategic alliance much more involved than a base-level business relationship.

How do alliances fit into your partner ecosystem?

Alliances can be a massive revenue generator and value-add to your partner ecosystem and overall business. Typically, a partner program consists of three partner types: affiliate, referral, and reseller.

  • Affiliate: typically comprised of influencers, content creators, publications, membership associations, and technology vendors who drive traffic through links and earn a percentage of revenue when a deal closes from that traffic
  • Referral: customers, or partners who send qualified leads for your team to close and earns a percentage of the revenue when a deal closes from a referral
  • Reseller: distributors or agencies that sell a vendor’s product directly to their client and therefore earns the largest percentage of revenue when they close the deal

Strategic alliances are a type of partner. A strategic partner can fit into any of the three partner types above, but in your organization they might sit separately — and that’s okay. As long as they are considered a strategic priority in indirect growth, they are a part of your channel program.

A real-life example of a strategic alliance

Wondering what a strategic alliance can look like in practice? Let’s talk about Slack. Slack has a strategic alliance with Atlassian with the common goal of “bringing tools and teams together.” This partnership likely leads to some warm introductions, or referrals, to one another’s products, but there is also a tech integration behind it all. Above all else, the defining reason this partnership is a strategic alliance is because the mutual benefit for various parts of the organization is evident. Both Slack and Atlassian earn revenue, tap into each other's audiences, leverage industry knowledge, and can build one another’s offerings without having to create each other's products independently.

This strategic alliance is just one part of Slack’s broader partner ecosystem, but it’s a uniquely high-value component. After all, tapping into the knowledge, market, and products of other businesses will get you further than just working within the limits of your own.

See more: Partnerships 101: the ultimate partnerships checklist.

a hand holding a planet connected to other planets by dots

Diving into the partner ecosystem and alliance relationship

Let’s continue on with the example of Slack’s partner ecosystem. Yes, Slack has many tech integrations and partners that they work with that sit within the traditional partner types (affiliate, referral, and reseller). That being said, all of these partners, as well as their strategic alliances, have helped them to build a broad partner ecosystem. Not only can Slack integrate with countless products, they also allow their partner companies to add one another into channels to collaborate further. Slack is a great example of how strategic alliances can fit seamlessly into a broader ecosystem, adding value to your business and all others within your ecosystem.

Considering strategic alliances as part of your ecosystem strategy

Creating an ecosystem that works to orchestrate all indirect distribution channels can be a daunting task. Then comes the challenge of using these channels to scale and grow revenue and customers. When thinking and planning for 2023, strategic alliances should definitely be a part of the conversation. The benefits of collaboration and synergies that can be found through alliances might be the thing that sparks new ideas and initiatives that propels your business forward in a way that your team alone couldn’t have imagined. 

Remember: strategic alliances are all about what you can accomplish with the right partner. A well thought-out alliance can take you further than you could go alone, so it’s worth working towards including them in your partner ecosystem whether now or in the future.

Build your partner ecosystem further and drive clarity to your partner types. It’s time to invest in strategic alliances in 2023.

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WORD OF THE WEEK

Joint venture

noun
[joynt ven·chr]

A joint venture is a business collaboration between two parties on a project. Both parties will benefit from bringing their shared resources and knowledge, and neither party will take on the sole burden of the risk.

WORD OF THE WEEK

Buyer persona

noun
[bai-ur puh·sow·nuh]

These depictions of target customers help to define your company's ideal target customers.

WORD OF THE WEEK

SaaS partner programs

noun
[sas pahrt-ner proh-grams]

SaaS (software-as-a-service) partner programs are a systematic way that software companies form mutually beneficial relationships with agencies, influencers, and other companies to drive business results.

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