No matter how much effort you put into a single marketing campaign or initiative, you should always be looking for ways to maximize your efforts. And this is the power of strategic partners.
So what is a strategic partnership?
A partnership is an agreement between two business entities to share expertise, resources, or competencies for mutual benefit.
Strategic relationships are one of the fastest ways to increase your footprint and credibility, and strategically position your company in front of its target audience.
Typically, business owners will seek partnerships to fill a gap in their company’s services, or to offer a benefit to their clients or customers.
The goal is to create a synergy that increases the profit potential for both companies. In fact, 68% of executives say the main benefit of a strategic relationship is to acquire new customers.
Outsourced partnerships are where a company provides services similar to yours, but they’re not in direct competition with your company. In many cases, you would whitelabel your service and expand your service offering to their customer base. In certain cases, you may be able to offer their service as well to your customer base if there is mutual benefit.
One example of an outsourced partnership is Bulu Box. They offer a turnkey solution for companies wanting to offer a subscription box.
A turnkey solution is a type of system built end-to-end for a customer that can be implemented into their current business process. Bulu Box handles the business model, you handle your brand!
When it comes to referrals, this may or may not be a formal program. Many times, establishing a referral partner takes time and requires that you build a foundation of mutual trust. It’s usually best if the referrals can go both ways.
No one does referral partners better than Spotify.
We’ve seen them use the message of “Purchase Spotify Premium and get Hulu for free”. They’ve also rolled out a new partnership with Waze, a community based GPS app.
Spotify leads the category of the new age referral partner. Providing complementary products is the easiest way to share customers! Spotify listeners are listening while driving, why not navigate with Waze at the same time?
Also known as brand partnerships, co-branding happens when two brands merge to achieve mutual marketing benefits. The key is to choose a partner that best compliments your products and/or services.
One successful example of co-branding is BMW and Louis Vuitton.
While the pairing might not be obvious at first, if you think strategically about it, the two brands actually have more in common than at first glance.
Both BMW and Louis Vuitton are luxury brands. Each brand promotes travel -- BMW with the transportation and LV with the luggage to get there. The collaboration between the two companies is a match made in heaven.
One of the newest forms of strategic partnerships, influencer marketing, is making waves - and rightfully so. Influencer marketing is a no-brainer. The evolution of social media has kicked the door wide open for brands to develop a strong presence through the audiences of other people.
Influencers on social media provide direct contact to your target audience with valuable information about your products and services.
If you’re familiar with YouTube or Instagram, then it’s likely you’ve witnessed influencer marketing. Whether it’s Audible, Squarespace, or a high-end clothing brand, Youtubers are always promoting some link to sign up for something and it works!
Influencer marketing content delivers 11X higher ROI than traditional forms of digital marketing. It’s worth looking into and taking action.
While sponsorships often require more capital than other forms of strategic partnerships, they're an excellent way to drive dual brand recognition.
Sponsorships can be really useful for young companies if one of the brands is more well-known than their partner. The smaller partner benefits by leaning on the credibility and audience of the larger brand. In return, the larger brand receives some form of compensation.
While GoPro is a well-known giant in the industry, they didn’t start that way. As a result, in their early days, GoPro used sponsorships at events to quickly grow their startup into an empire.
By aligning their culture with events like the X-Games or anything to do with RedBull, they were directly able to get in front of their target audience and create demand for their product.
A few tips for strategic partnership programs
Partnerships, like all effective marketing strategies, require planning and solid execution in order for them to work. Before you dive into any of the strategies mentioned here, we encourage you to think about the amount of time you have available to nurture and grow these partnerships.
You also need to consider the fine print of how the relationship would work. Below are a few things to think about, but since many of these have legal and organizational ramifications, you should talk to your legal counsel about it before laying out any details or agreements (we are not lawyers at Simple Strat!).
- Will there be a screening process?
- Is there a specific set of paperwork they need to complete? What are the legal ramifications for partnering with another brand?
- How long will you consider them an active partner? What are the circumstances if the partnership does not perform? What happens?
- How will you drive value for your strategic partners?
- How will you keep them informed of what’s happening in your business so they are aware of the value you provide?
Bottom line, you will notice that every type of strategic partnership has an alignment of company goals. If your company and a potential strategic partner does not share the same values, target audience, or attention to details, then you should reconsider whether partnering on business opportunities is a good idea.
When done right, partnerships can turn your company into a rocketship of exponential growth. Leveraging each others' customers is the easiest way to open up doors to new opportunities.
It’s like mom always said, “Sharing is caring!”