STRATEGIC GROWTH ALLIANCES… WITH SUPPLIERS

CLIENT: DEALER & DEVELOPER OF ERP SOFTWARE

A regional dealer for a national ERP software firm was struggling with both a general downturn in demand & strong competition. A problem their primary ERP supplier shared on a national basis. Over the prior 3 years, the dealer had also developed & field-tested companion software that worked seamlessly with the ERP suite; however, sales were limited to its local market & its direct sales efforts. We recognized the opportunity to form & coach a strategic growth alliance with its ERP software supplier to sell its suite of companion software. The client could leverage their suppliers existing national dealer network & direct sales force. This would also provide their supplier a compelling standalone offer with no competitive threats & a way to further differentiate the sale of their primary ERP application.

• Client Value: Immediately grew revenues of its companion product by $2.1 million in the 1st year, $3.6 million in the 2nd year & 4.5 million in the 3rd year. In addition, a 12% increase in ERP sales was re-established.

• Partner Value: Able to provide its entire dealer network with a rapid response to its shared problem of declining sales. Better yet, it accomplished it without risking any money or time in software development.

CLIENT: BOEING SUB-ASSEMBLY MANUFACTURER

There was little or no innovation with our client - a supplier of sub-assembly parts for Boeing Aerospace. Their growth was flat for over 4 years. They needed to convince their many suppliers to collaborate and accelerate innovation. In addition, their suppliers by themselves would be hard pressed to do what was needed without a high risk of failure. A strategic growth alliance was formed to blend the expertise, capacity and financial resources of 12 suppliers into a single source for new product development.

• Client Value: The 1st year there was little impact to the bottom line because so few products made it by the group. The good news - they didn't waste time & money developing the wrong products. Eventually, several new markets and products evolved. The market potential improved its business value by approximately $13 million and sales were increased by 107% each year over 3 years. Additional M&A Results: Client was able to purchase one of the partners - a small manufacturer that was holding patents on several of the new product lines & had established itself as the expert in the market.

• Partner Value: Every partner eventually benefited from a highly cost effective way to participate in ongoing innovation & product development.

CLIENT: RESIDENTIAL MORTGAGE COMPANY

A mortgage company was having difficulty hiring & retaining high performance mortgage representatives. This was critical to their success because any increase in sales was in direct proportion to the number of quality field representatives. The growth of existing sales was around 10% per year but with expectations set at 30%.  In addition, existing rep acquisition had become too costly to maintain. To solve the problem, we formed & coached a strategic growth alliance with several suppliers - a recruiting firm specializing in sales people, a sales testing organization & a video studio. As part of the Alliance, each supplier provided very custom services at highly discounted prices. Over 3 years, the client provided its partners with both a volume & funding commitment. The partners created a recruiting & selection process that produced superior sales results at a lower acquisition cost per sales rep. 

• Client Value: Over 3 years, the client grew from 12 mortgage reps to over 100. Production per sales rep improved by 51% & the cost for a new sales rep was reduced by 27%.

• Partner Value: Improved the quality of their services & secured a steady stream of increased sales revenue. Eventually, the partners duplicated the process they had established & also sold it to other non-competing industries.

STRATEGIC GROWTH ALLIANCES… WITH CUSTOMERS

CLIENT: FINANCIAL DATA PROCESSING FIRM

A small data processing company had sales that were flat with a limited capability available for the community banks it served. A new growth strategy was launched to leverage both current customers & expand its product line. First, a strategic growth alliance was formed with a partner (a large bank data processing subsidiary) to provide new banking software applications that were strategically needed by the community banks to remain competitive in several of their markets. This gave the client a very unique selling proposition. In addition, we formed the strategic growth alliance with other partners consisting of 22 community banks that were already existing customers of client. The alliance allowed the partners to gain access to the new software & 3 remote data capture sites on a preferred basis for a minimal monthly cost without large up-front investments.

• Client Value: Created immediate growth without any risk of not generating enough start-up revenue. This alliance generated $4.3 to $5.7million in additional sales per year over the next 3 years. Additional M&A Results: During the 4th year of the alliance, the client sold out to their large bank data processing partner.

• Partner Value: Eliminated the need for each community bank to make any capital acquisitions and quickly provided the new competitive capability they needed.

CLIENT: DASHBOARD SAAS PROVIDER

A small but very successful SAAS provider wanted a potential growth & profitability story to tell its investors. They needed to become a unique provider of their services to a niche marketplace in order to reduce competitive threats & maintain a higher price point per customer. They identified the insurance market as their target. We formed & coached a strategic growth alliance with one of their existing customers in the insurance market to specify, fund & test the development of unique dashboard applications.

• Client Value: Eliminated the risk of developing the wrong feature set & initial program development costs. Client also built a story to tell investors about its new market and software application. An application that demanded a better price.

• Partner Value: Got exactly what they needed in a dashboard application to remain competitive in their marketplace; an application that will be provided ongoing support for a reasonable fee because it's not custom code; and an opportunity to share in revenue for sales of this application to others in the market for years.

STRATEGIC GROWTH ALLIANCES WITH…sales channels

CLIENT: BANK SOFTWARE DEVELOPER

A software developer had successfully sold a proven suite of applications for commercial banks, but its sales growth was limited because they had only sold through a direct sales force in northern California, Washington & Oregon. We formed & coached a strategic growth alliance with 3 new sales channel partners in southern California, Arizona/Nevada & the balance of the western United States. This successfully leveraged their existing bank contacts and sales acumen in each of their territories.

• Client Value: Reduced the risk of failure by engaging with experienced sales partners. They increased yearly sales from $1.4 million to 5.9 million in just 2 years. Additional M&A Results: The client sold its business to a competitor. The highly productive sales channel alliance was a critical component to the sale.

• Partner Value: Sales channels were able to effectively sell existing relationships. Sales exceeded their expectations with little or no additional cost.

CLIENT: CABINET MANUFACTURER

A cabinet manufacturer had grown over the years to be a leader in the market; however, many local dealers were recently using other manufacturers to heavily discount deals. Our client provided a superior product, but a number of dealers had stopped offering it. We decided to form & coach a strategic growth alliance made up of both dealers & specialty architects. This group of partners built a very exclusive relationship with our client. As an example, feedback was consistently promoted & rewarded starting with a direct line for partner access that the CEO answered. As participation grew, we made becoming a partner in the alliance more & more difficult. The sharing of referrals and an informal non-compete practice evolved. The manufacturing also improved to such a degree that zero defects became the rule & not the exception!  

• Client Value: Sales within the alliance increased every year from 2007 to 2011 and the profitability per sale also improved.

• Partner Value: The cost of re-works and missed install dates were literally eliminated. Profitability per site has remained constant & customer satisfaction much improved.

CLIENT: DENTAL SURGERY PRACTICE

A dental surgery practice was dependent on receiving its referrals from the numerous general dental practices in the Seattle area. Often, these referring dentists would spread their referrals around to a number of other competitive surgical practices. We looked for an alliance opportunity that might influence their current referrals. A strategic growth alliance was formed & coached as a cooperative buying group consisting of most of the referring dentists in the area & a larger buying group located outside the Northwest. This alliance provided purchasing power for the partners and solidified a relationship value with our client.

• Client Value: Increased the referrals in excess of 60% in the 1st year & an additional 32% in the 2nd year. Additional M&A Activity: Eventually, 2 of the partners bought 60% of the practice.

• Partner Value: Improved the cost of most dental supplies - saving between 9% & 13.5% on most items.

STRATEGIC GROWTH ALLIANCES WITH… A competitor

CLIENT: TELECOM engineering SERVICES FIRM

Sales with a small provider of Telecom engineering services were flat and without any realistic opportunities to meet its future growth objectives. We re-defined their growth strategy to form & coach a strategic growth alliance with the competition - partnering with larger consulting firms in the Telecom industry that provided a more compelling sales story to help close bigger more profitable projects.   

• Client Value: During the first year, client revenues grew by 2.8 million & bottom line profits by 86%. In addition, the risk of deals flipping was almost eliminated due to the numerous long term relationships the customers had with our partners.

• Partner Value: They leveraged our client's capacity (engineers on the bench) & their highly specialized expertise. Partners found they could charge their customers less, earn more & maintain minimal resources.

STRATEGIC GROWTH ALLIANCES WITH…financial intermediarIES

CLIENT: ESCROW & TITLE SOFTWARE FIRM

A software developer of real estate escrow & title software found their market was resisting automation to such a degree that penetration into any territory would remain slow & expensive. At the time, we identified that commercial banks were very interested in the large trust account balances held by the escrow & title companies in their checking accounts. In fact, the banks were willing to pay a fee as a percent of these balances to secure the account relationship. As an example, most averaged a $4 million collected balance x 1% = $40,000 yearly fee. We formed & coached strategic growth alliances with multiple bank partners. This provided a new revenue stream for the industry (our customers) that normally exceeded their monthly cost of automation & made a very compelling case to act on.

• Client Value: Accelerated growth in numerous US markets. Over the years, we generated over 350 accounts & $14.5 million in revenues with a 35% gross profit. Additional M&A Activity: Seven years after forming this alliance, the client successfully sold its business.

• Partner Value: For years, the bank partners embraced this program as one of the most successful core deposit growth programs on the west coast.

CLIENT: commercial real estate developer

A local real estate developer only had a few market differences with other developers in the area. They often lost opportunities or had to heavily discount them. To set their business apart from look-alike competitors, we formed & coached a strategic growth alliance with a community bank, local CPA firm, property & casualty insurance agency, commercial real estate brokerage firm and a business law firm that specialized in construction & real estate. The alliance partners provided a package of services that were both valuable to the developer's customer and to the customer's tenants they leased too.

• Client Value: This was very successful over the years because it differentiated them enough to maintain profitability and improve their sales closing ratios.

• Partner Value: The partner relationship guaranteed the inside track for new business. All partners agreed that it was a very effective lead generation program!

STRATEGIC GROWTH ALLIANCE WITH…private equity firm

CLIENT: ULTRA-SOUND DEVICE MANUFACTURER

This medical device manufacturer had a large direct sales force dispersed throughout the United States with all of its marketing centralized. Only 50% of their market every year would pursue the acquisition of new equipment. Marketing had no idea who was buying each year, so they would communicate with the entire market - sending expensive collateral to everyone. In addition, the remote sales representatives were asked to follow-up on all mailings. If they only mailed to the 50% that were going to buy something this year, they could save about $2.8 million. Also, if they only followed up on those mailings the salespeople would save about 16% of their time. We were asked to solve the problem. We identified the solution as a telephone survey that could be used to update needs & usage with the entire marketplace each year. To cost effectively provide this solution, a strategic growth alliance was formed & coached with a private equity firm & a venture group that owned a software firm and tele-marketing company. This alliance provided the development of a new software application & database; managed & staffed a tele-survey group; and facilitated the training & consulting required for the field sales force to become more effective. 

• Client Value: The net savings in marketing communications averaged about $1.6 million each year and the sales people increased sales $14 to $18 million a year each year over the next 6 years.

• Partner Value: The client funded all the development of software & provided expertise critical to developing correct functionality & best practices. This work dramatically improved the business value of both software & tele-survey fiirms.