Forming Strategic Alliances For Your Business

The importance of forming strategic alliances is greater today than at any other time. Also greater is the availability of alliance programs. Strategic alliance programs offered by many manufacturers in our industry are an excellent way for remodelers of all sizes to extend their reach, their dollars, their time and their brand.

In 1997, many well-known airlines formed the Star Alliance. In short, the airlines involved in the alliance all have individual skin in the game and provided resources that would be beneficial to all members. As a result, they were able to consolidate flight operations, teams and equipment, fuel purchases, airport costs and other functions, saving them a lot of money and allowing them to share customers within an overall brand “umbrella.”

How does a remodeling company do something similar? I became aware many years ago that all my company was doing was transactions with our suppliers. Wanting to take the relationship further, I met with them and ultimately focused my product offerings and purchases. I had several powerful things emerge over time that helped my company tremendously, such as a rich vein of co-op advertising funds, priority delivery every morning at no charge, dedicated inside and outside sales representation and streamlined ordering and short notice supply support if my team was short anything in the field. My suppliers got orders and not bid requests, saving them a lot of time and resources.

To get started yourself, take an inventory of the products and services you already use a lot of and trust. This is very important. Maybe it’s a brand of window or cabinet. Does that company offer an alliance program? If so, look into it. Many companies today offer programs that feature marketing elements, certification, Web content and other valuable elements that, if leveraged properly, can help your company. Here are a couple of examples:

Co-op Advertising: Most co-op programs provide funds or rebates for advertising you do featuring the manufacturer’s products. They have premade resources that you can add your brand into, and, in some cases, they will allow you to modify them, albeit with an approval process. These funds or rebates can stretch your marketing budget tremendously and offset one of the two largest costs of being in this business — marketing. The power of putting your brand out there with a well-known brand is the essence of co-branding and positions you well in the eyes of the public.

Certification: Becoming certified with a manufacturer generally involves a short trip to a manufacturer’s facility that will include a factory walk-through and specialized product and installation training. It is also an opportunity to meet those who make the product and key leaders in the company. What I really like about certification is how you can leverage it in the sales process.

Having gone to the plant, and having a deeper relationship with the manufacturer sets you apart from other remodelers. With some products, my company would have the rep from the company meet us with the client, further differentiating us from others that might specify the same product. This was also great because they would do the measuring and ordering for us. All we had to do was confirm the orders, saving us time and ensuring accuracy.

I have focused mostly on the benefits to remodelers in these programs, but remember all parties must have skin in the game and, as a result, most alliance programs have requirements or expectations from the manufacturer’s side. As you are investigating programs, don’t just look at the offering, focus on what you can bring to the table in the relationship and how you can leverage it. Developing alliances takes time but can be a very profitable and powerful endeavor.

Sam Imhof is principal at S. William Imhof and Associates. He has been in the remodeling and building material industries since 1984 and specializes in helping companies grow.