Strategic alliances for web companies

Alliances became a practice that became very popular after the arrival of the Internet. The need to reach low-cost markets, offer complementary services or generate additional income prompted cyber-entrepreneurs to weave all kinds of agreements that we analyze in detail in this article.

While there is nothing easier than exchanging a banner or putting a link to a business partner's site, when it comes to establishing a business alliance, be it strategic or not, very few know what it is or what it is about. they hope to obtain.

This fact generates that every new administrator of a website - motivated by the implementation of a cross linking strategy - goes on the hunt for alliances, firing left-handed and sinister emails of successful wave and many times, not taking into account the needs of their counterparts.

When one tries to establish an alliance with someone, one must take into account that that someone has needs or interests that, if they are not satisfied, will fail any type of agreement that would have been possible.

It is the same as with a client: if you do not solve a need, forget about achieving the sale.

But something more basic than that, for an alliance to be feasible, the parties must obtain the same satisfaction, regardless of the specific objective that they have set.

As in a negotiation where the weakest are forced to accept a disadvantageous agreement, an alliance where the benefits are not even will be doomed to failure.

This confronts us with the first rule that says:

"The parties must have an interest in associating"

It is useless to develop excellent proposals and taking into account the recipient if he does not show a certain predisposition to establish alliances. You cannot force it.

Not everyone wants to ally and although it sounds strange and more in these times, there are companies whose policies in this regard are very clear and we cannot even question them.

But having overcome this instance, we immediately fall into the second rule:

"Every alliance must offer benefits relative to its members"

The disparities of the companies to associate do not matter as long as there is a clear benefit that is related to the fact of establishing that alliance. These benefits can come hand in hand with increased traffic, branding, revenue sharing, etc.

An error that is observed - unfortunately more than wanted - is the proposal of alliances of new sites, generally dedicated to content, which only have a few visitors a day and propose exchange of links, notes, or "what you consider".

If the rule of benefit is not fulfilled - what traffic would bring to a site and imposed an alliance in these circumstances? There is no alliance possible and to accept would be to do a favor, but definitely, that cannot be considered an alliance.

A third element to consider when establishing trade agreements is relevance. This places us in front of the third golden rule:

"All alliances must be relevant to the parties"

As much as the two mentioned precepts are fulfilled - interest and benefit - if a pornographic site offers an alliance to… let's say the site of the German Evangelical Congregation, it is hardly interested in this agreement, since it does not offer benefits that are directly related to its product that is the care of the spiritual life of its parishioners.

A pornographic site in this case would not offer a complementary product that would make the relevance of making the alliance for example a site dedicated to the marketing of accommodation for spiritual retreats.

"The size of the parties helps establish alliances"

There is no doubt that companies that are going through similar circumstances - such as having already received their first round of financing - will have a better predisposition to associate with each other than with third parties.

Here, too, is the saying that "money brings money" and it is a reality that should also be considered when thinking of proposals.

The size of the projects, their moment in the life curve, help to make the parties more sympathetic to the possibility of a specific agreement.

As you will see, it is not so easy to establish human relationships. As in real life, these relationships are complex and require many factors to be met.

In commercial aspects there is a small advantage: Players need traffic and income, two factors that have been triggers for strategic alliances since the beginning of the network.

This statement leads to trying to establish a matrix of possible relationships between different types of sites.

Relationship Matrix

There are sites that have traffic but not income while there are shops or service providers, almost exclusively transactional sites that are capable of generating income but need traffic for it.

Typically the sites capable of generating traffic are those dedicated to content: from articles to chat channels, the model of which was initially based on advertising.

The site that has traffic is in a position to impose certain conditions and in a certain way, to choose the appropriate partner. In reality you should do this and make sure that such partner has similar ethical principles. After all, it is he who is going to put his name on the line to recommend this or that provider.

But ultimately everything happens through a question of positioning. A well-positioned transactional or e-commerce site may also have the luxury of selecting who to offer the alliance to or accept as its affiliate or reseller.

Branding issues are crucial in this type of relationship and the parties must be especially careful with whom they associate their brands.

Making a generalization regarding the type of existing sites and the possibilities of establishing commercial relationships, this 3 by 3 matrix can be constructed:

		RECEIVERS
		Content (portals, media)	Virtual shops	Service providers
O F E R E T E S	Content (portals, media)	Traffic and branding	Traffic and sales generation; branding	Traffic and sales generation; branding
Virtual shops	Revenue Sharing for sale of related products, branding	Revenue sharing for the sale of complementary products, cross linking, banner exchange, branding	Revenue sharing from the sale of complementary products.
Service providers	Revenue Sharing, Co-branding, preferential services	Revenue Sharing, Co-branding, preferential services	Revenue sharing for the provision of complementary services

The forms of implementation can range from simple cross links to sophisticated membership plans.

An interesting way is to place the offer of the transactional site on the site that receives traffic. An example would be adding content with the offer of the product or service so that the ally retains its visitors by providing them with a useful offer with special benefits, in the form of cobranding.

Moving a little further, "own brand" versions of the service can be offered so that the content site itself is the front office and the provider acts as a hidden back office. The same is true for certain products.

Of course, this article does not intend to cover all the possibilities of Strategic Alliances that exist in practice, but it is a good starting point to be able to make agreements that are more productive and waste less time for the busy Directors of Marketing & Alliances.

The last and most important rule: Platinum

Partnering is easy. Doing it in the long term is no longer the same and implies that the parties share more than just a business objective. Affinity implies that it is nothing other than having the same beliefs and principles.

If there are divorces in life, even when there are children involved, imagine how difficult this can be to achieve.