Although we like to think we're self-sufficient, the truth is that we all need help from others to accomplish our goals. We can benefit from partnering with other people, and the same is true in the business world.
Strategic partnerships have played a vital role in the success of companies in all kinds of industries. In fact, you probably encounter partnerships every day without even thinking about it!
So what exactly is a partnership?
A strategic partnership is a relationship between two entities that agree to help each other reach their business goals. Each partner must possess some form of value that they can offer to the partnering company. One company might outsource a business function to another company, which we've all experienced with customer service before (unfortunately).
Two companies can also come together to "co-brand" a product, where they work together to produce and promote a specific product or service. An excellent example of co-branding is how Uber and Spotify recently came together to create "a soundtrack for your ride", where Uber riders can choose Spotify songs to listen to during their ride.
Partnerships are also commonly formed between small business owners. A healthy restaurant might partner with a local farmer, and a college might partner with a local business who can provide value to students.
How can businesses benefit from partnerships?
Every business has their unique strengths and weaknesses. It only makes sense to utilize the expertise of other companies for specific projects/areas of your business plan.
A great example is how many businesses rely on the knowledge of marketing agencies (like us!) rather than do all of their marketing in-house. Delegating your marketing duties to an agency frees up precious time for a business to focus on everything else on their plate and not spread themselves thin in too many areas.
Businesses can also benefit from referring customers to one another. Unless you are in direct competition with another company, you likely can trade referrals with them to increase your client base at a reduced cost per acquisition. Talk about a win-win!
What businesses are the right partners for me?
This can be a tricky one, so we're going to give you three tips on how to pick your partner(s).
1) Think about your customers. What other businesses are involved in their purchasing process?
There's more than one company involved in many purchases. If you're a realtor, of course your primary goal is to sell real estate. The customer doesn't typically just hand over the money and call it a day; there are more steps to the process.
You might want to partner with a someone in the finance industry that can help your customer take out a loan for that new house. You might also want to partner with an insurance agent that can provide home owner's insurance to your client. Everybody would benefit from these partnerships, and offer the smoothest purchasing process for the customer!
2) Find out what brands your customers are interested in by using a survey
Knowing your customers' interests is crucial to providing the best experience for them. It isn't that hard to figure out what they're into either, all you have to do is ask! An example of this is when Target surveyed their customers to figure out what else they enjoyed doing in their free time.
The survey results showed that Target customers enjoyed getting coffee with friends, specifically Starbucks coffee. Target used this information to their advantage, building Starbucks cafes in their stores. This partnership provided value for both companies, and we're not complaining (who doesn't love coffee and shopping?)
3) Focus on working with other local businesses
Many people are choosing to shop local and support small businesses over large chains. Small mom and pop shops have to put in a ton of hard work to keep their heads above water, but they don't need to fly solo!
Partnering with other small businesses creates a sense of community and shows that you aren't just in it for yourself, you genuinely care about your city and the other companies located around you. A restaurant can feature beer from a local brewery, just like an ad agency might want to partner with a local video production company. The opportunities are endless!
Partnerships can benefit businesses in all types of industries; it's all about figuring out what's right for your unique brand! Have you developed a strategy for partnering with other businesses?
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