Strategic partnerships happen all the time between well-known companies. Spotify created a playlist for Uber drivers — taking the burden off the driver to find good music to play while driving people around. This may prompt the Uber driver to upgrade with Spotify and become a premium user instead of going with a competitor, such as Pandora.
This same strategy can work for smaller companies as well. For example, a workout studio called Bar Method in San Francisco partnered with water bottle company Hidrate Spark to do giveaways and pop-up workouts. This is a perfect example of smaller like-minded businesses with the same target customers working together to grow their brands.
Implementing Strategic Partnerships
Let’s say your business is a small wedding dress boutique. You could partner with a wedding photographer, event rental company, or wedding planner to extend your reach to even more brides-to-be. By doing this, you would gain access to your partner’s email marketing list and customer base, enabling you to set up a cross-promotion that will benefit both of you.
Of course, you wouldn’t choose a partner without researching. Putting the time and resources into finding a prospective partner is crucial to a successful alliance. Here, we’ve laid out six steps to set a strong foundation for long-term strategic partnerships.
1. Create a Plan
Creating a strategic partnership takes time and planning before you even start reaching out. During this planning process, it’s important for you to identify:
- Your brand values. You want to find businesses that align with the values you’ve set for your organization. Having similar values will make it easier to get on the same page and ensure you build a mutually beneficial partnership.
- Your target customer. You’ll also want to look for organizations that target the same customer base as you. Start by figuring out exactly what your buyer personas tell you about your demographic. (If you haven’t developed buyer personas yet, check out this guide.)
- Your purposes for pursuing a partnership. Decide if your aim is to target a larger customer base, gain more resources, or build your brand’s reputation. Once you confirm your purpose, you’ll be better able to figure out what you need in a partner.
- Your strengths and weaknesses. Honestly determine the strong and weak points of your business and take inventory of what you bring to the table. What can you offer to other businesses? You don’t need two organizations that are strong in the same areas; a mutually beneficial partnership means organizations complement one another through a symbiotic relationship.
2. Look For Like-Minded Partners
When done correctly, a strategic partnership can mean you’re reaching hundreds or even thousands of new customers. With this in mind, it’s beneficial to take the time to figure out if aligning with a business or entrepreneur is worth it. Find out if the potential partner:
- Offers a product or service complementary to yours. If you own a wedding dress boutique, you wouldn’t want to partner with another boutique. Instead, you’d want to find an organization that targets the same customer base but offers a complementary product, such as a wedding photographer or event rental company.
- Caters to the same target audience. You’ve already figured out your target customer using buyer personas, so make sure your potential partner is targeting the same group.
- Shares your brand values. If your companies were people, would they get along? For instance, if you’re a warm, no-pressure-sales organization, you might not want to pair with a more sales-driven organization.
3. Clearly Define the Value
Before making your pitch, take the time to get crystal clear about the value of the partnership. You only want to invest hours into creating assets that will benefit your business in return, so defining the level of impact each partner can have on your business upfront is important. This way, you can include the specific assets you plan to create for promoting the partnership in your pitch.
To assess the value of the partnership, find out your potential partner’s audience and check it against yours. Do your assets align and feel equal? Make a list of how much time you will invest, the size of your email list, social following and the value of your marketing collateral. If you have comparable email lists, you might propose a cross-promotional webinar. If not, a guest blog or some social media feature posts are a great place to start.
4. Pitch Your Idea
After you’ve carefully chosen your prospective like-minded businesses, come up with a list of benefits for both your organization and your potential partners’ organizations that you can pitch. Here are a few sample benefits you can highlight:
- Opens the door to cross-sell. A strategic partnership between a bridal shop and photography company opens the opportunity to cross-sell to each other’s customers.
- Simplifies the customer’s experience. Making related products available to the bride in one place makes wedding planning much easier and can lead to an increase in sales for both companies.
- Expands your reach. Partnering means getting access to another company’s entire email list. The hard work of generating leads would be done for you.
When you pitch your idea, make sure to explain how this alliance will be a win-win by highlighting exactly what they will get out of it. Don’t be discouraged if the first few potential partners say no; taking on a partnership can be a big commitment, and businesses don’t always have the time or resources to take on new responsibilities. Ask for feedback, edit your presentation accordingly, and keep trying.
5. Get on the Same Page
Now that you have found a partner and made your pitch, it’s time to get on the same page. Many partnerships fail because a deal is signed without first discussing a clear purpose and strategy for the partnership. It’s crucial all parties involved know what to expect from the get-go. Before you seal the deal, set up a time to go over the following:
- The scope of the partnership
- What assets will be contributed by each organization
- The lifespan of the partnership
- The legal structure of the partnership
- The obstacles (why the partnership might be terminated)
- How issues will be identified/resolved
6. Measure and Share Your Results
Before getting started, come up with metrics and ways each of you can track the results of your efforts. Success metrics based on your goals will enable you to take the temperature of the partnership in an objective way. Determine not only what constitutes a winning partnership, but a timeframe for that win.
Meet with your partner quarterly to review the results and adjust accordingly. You don’t necessarily have to abandon a partnership that doesn’t seem to be working in the first quarter. If things aren’t going well, determine a new strategy, possibly a different promotion or allocate more resources to the partnership.
When carefully planned and carried out, strategic partnerships can provide creative ways to collaborate and grow with like-minded businesses. Get started on this six-step process, expand your reach, and find success in your upcoming partnerships.
Are you in a strategic partnership or considering it? Let us know in the comments.