When you find yourself reaching a ceiling in your growth that you can’t bust through by hard work alone, it might be time to form a strategic partnership with another business. Strategic partnerships are win-win situations with mutual benefits such as access to new markets, customers, products and resources.
Let’s say your business is a small wedding dress boutique. You could partner with a wedding photographer or event rental company to extend your reach to even more brides-to-be. By doing this, you would have 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.
Or let’s say you’re a small tech company: Partnering with a larger firm grants you access to their resources. They outsource some of their work to you; you have a larger research and development budget and can use their labs.
You wouldn’t be alone in considering a strategic partnership. International News Media Association says:Of course, you can’t just choose a partner without researching. Putting the time and resources into planning and finding a prospective partner, as well as working with them throughout the process, is crucial to a successful partnership. Here, we’ve laid out the six steps to doing so:
Creating a strategic partnership takes time and planning before you even start reaching out to potential strategic partners. During this planning time, it’s important for you to identify:
- Your brand values. You want to find an organization aligned with the values you’ve set for your organization.
- Your target customer. You’ll also want to find an organization that targets the same customer base as you. Start by figuring out exactly what your buyer personas tell you about who you’re marketing to. (If you haven’t developed buyer personas yet, check out this article for tips on how.)
- 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. You don’t need two organizations that are strong in the same areas; a mutually beneficial partnership means organizations complement one another. Cultivate a symbiotic relationship.
2. Look For Prospective Partners
Investing the time and resources to look for the perfect partner is crucial to creating a long-term relationship. Find out if the potential partner:
- Offers a product complementary to yours. If you own a wedding dress boutique, you wouldn’t want to partner with another boutique. Instead you’d probably 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, human, no-pressure-sales organization, you might not want to pair with a more sales-driven organization.
3. Pitch Your Idea to Prospective Partners
After you’ve determined your prospects, come up with a list of benefits for both your organization and your potential partners’ organizations. Here are a few sample benefits to consider sharing with potential partners:
- Opens the door to cross-sells. 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. Don’t be discouraged if the first few potential partners say no; many businesses will be skeptical of a partnership. Ask for feedback, edit your presentation accordingly and keep trying.
4. Hold a Strategic Partnership Planning Meeting
Many partnerships fail because a deal is signed without first determining a clear purpose and strategy for the partnership. It’s crucial to get on the same page from the get-go. Determine:
- The scope of the partnership
- What assets will be contributed by each organization
- The life span of the partnership
- The legal structure of the partnership
- The obstacles (why the partnership might be terminated)
- How issues will be identified/resolved
5. Determine Measurement Metrics and Check Progress Quarterly
Determine metrics for success with your partner before getting started. 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 allocating more resources to the partnership.
Strategic partnerships can take your business to the next level, but they have to be carefully planned and carried out. Follow our five-step process to get started and find success in your upcoming partnerships.
Are you in a strategic partnership or considering it? Let us know in the comments.