Some Basics For Creating Successful Strategic Alliances With CPA Practices
Second of Two Parts: The Solution
Part 1 of this article (in last weeks issue) explored the reasons life agency strategic alliances–especially with CPAs–could be in jeopardy of failing. In summary, strategic alliances, if not initiated properly, can result in giving your partner the necessary product education, market experience and confidence to compete against you.
This part discusses some of the main aspects of a real solution process that has produced over 20 successful alliances between life agencies and CPA practices. These alliances have been in place producing real results, some for over two years.
The entire solution to establishing and maintaining successful strategic alliances is described in a 48-step process and is too detailed to discuss here. However, we can present the basics of how to implement the solution to the concern presented in Part 1.
Step 1: Successful alliance partners start by forgetting about the contract!
Research shows that the number one characteristic for successful strategic alliances is building and sustaining a common business culture by the partners and not the quality, quantity or the length of the contract. In the specific case of life agencies and CPA practices, the best common culture must be one that is client-centered if the partners relationship is to be a lasting one.
Describing that common culture is a top down approach focusing the partners on “whats in it for our clients?” This top down approach is far different from the typical method weve seen partners start with to describe their relationship. Usually, partners initiate their relationship from the bottom up by negotiating their contract with each other.
This “whats in it for me?” approach has produced some of the best contract terms and conditions, commission split formulas and limits on each partners liabilities and damages should the relationship fail. And, thats good because this approach almost guarantees failure.
Whats more, its very easy to get trapped by a prospective partner into discussing and defining contract terms and conditions as early as the initial meeting. Heres a way to avoid that and start the relationship development process correctly.
This is the way to implement the top down approach. First, before you ever meet with a potential partner, describe your agencys client-centered business culture. And, express it in the context of what we call the “broadest possible view” of your culture.
Describing the broadest possible view of your agencys client focus is not a trivial task, but here are some guidelines. The broadest possible view considers the type of clients you target and serve, the range of your clients needs you fulfill, directly or indirectly, and your agencys ultimate commitment to fulfilling those clients needs.
Step 2: What is your agencys broadest possible view?
For example, if you describe the broadest possible view of your culture as “Providing our clients with access to the best selection of insurance products,” how do you think youll be viewed by a CPA practice? Probably as a sales organization the same as every other life agency that wants to partner with them.
But, one life agency we work with describes its culture as “Advocates for our clients financial security.” Another agency views itself as “Focused on achieving our clients lifetime and legacy goals.”
By the way, these two agencies didnt pick these descriptions out of thin air. It required a long, introspective look at what they provide and, more importantly, how much they are willing to commit to provide to their clients. Descriptions like these actually demand that the agencies have strategic alliances with CPAs and others to implement the broadest possible view of their mission. And, potential partner CPA practices will begin to see the role you perform in the relationship to achieve benefits for their clients.