We live in a constantly changing world where innovation happens faster than ever before. Companies need to match that speed, or they may lose out on opportunities for growth and success. Doing so takes purposeful partnerships with other organizations who share your goals and objectives. Those strategic partnerships allow you to offer services better tailored towards meeting customer needs—no matter what industry you're in.
What Is a Strategic Partnership?
Fostering strategic partnerships allows businesses to create unique offerings others cannot replicate. In its simplest definition, strategic partnerships refer to a relationship between two or more entities where the intent is to create a competitive advantage. In contrast, a general partnership may only focus on adding value to its internal participants.
Growth Benefits of Strategic Partnerships
Strategic partnerships [alliances] typically involve less risk than fully merging with another company [acquisition] or even developing something new in-house [organic]. Building tactical relationships allows both parties critical advantages with minimal downsides – something many businesses have already come to realize.
It’s time your business leverages the potential of strategic partnerships. Check out these seven reasons your business should build strategic partnerships:
- Gain access to your partner's capabilities
- Increase expertise and resources
- Boost revenue streams and reach new markets
- Enhance your reputation within your industry
- Broaden brand awareness and deepen trust
- Achieve deeper insight into customer perspectives
- Add value to your customers’ experience
Fostering strategic partnerships will allow your business to acquire new ideas and customers, leading to enhanced innovation and accelerated growth. In fact, HubSpot, a SaaS company, took advantage of strategic partnerships with complementary services, and they created a sales channel worth over $100 million.
The Value of a Customer-First Mindset
A customer-first mindset means your business plan centers around addressing the needs of your customer base with intentional offerings and an exceptional customer experience. However, it is also critical to include employee needs when building a customer-first strategy. The premise is like oxygen masks on a plane: help yourself before you can appropriately help others.
Fostering a customer-first mindset requires a deep understanding of your customers' needs and how your business can fill the gaps – something your entire organization needs to be aligned on and motivated toward [hence, the importance of engaged employees].
In evaluating your client base, you may come to realize that your current array of offerings may not be positioned for serving certain customer needs or interests. Maintaining a customer-first mindset means continuously identifying ways you can better support your target customers’ needs, and a great way for businesses to act on unfulfilled needs is by partnering with like-minded organizations.
According to the BPI Network, 57% of organizations acquire new customers through fostering partnerships. As more businesses realize the potential of strategic partnerships, that percentage is only going to grow.
The Bottom Line: We’re Better Together
If you have a customer-first mindset, growth will naturally follow. By developing strategic partnerships, you can offer your customers unmatched value. The infamous Helen Keller once said, "alone we can do so little. Together we can do so much." Collaboration is critical across all relationships in life, but now is the time to tactically apply it to business.
Why? Because we are, indeed, better together.
- Strategic partnerships occur when two businesses combine forces to expand their brand reach.
- Co-branding opportunities add value to your company, increase brand awareness and create brand trust.
- Successful strategic partnerships include Spotify and Google, Sherwin-Williams and Pottery Barn, and McDonald’s and Coca-Cola.
Strategic partnerships are nothing new. Companies have been working together for mutual benefits for a long time for a profitable future, with teams like Starbucks and Google, Spotify and Uber, and McDonald’s and Coca-Cola. Strategic partnerships are also referred to as co-branding. Some companies may not even seem to have much in common, but the best strategic partnerships find creative ways to expand their audience and potentially enter new markets. The following is a list of strategic partnerships and how the companies combined forces to build brand awareness.
Strategic partnership examples
Sherwin-Williams and Pottery Barn
This strategic partnership benefited both parties by appealing to customers looking into home improvement projects. On the Pottery Barn website, users can coordinate Sherwin-Williams paint colors with the available Pottery Barn furniture pieces. The site also links to a blog with DIY tips for painting projects.
Spotify and Uber
Although the music-streaming service doesn’t seem to have much in common with the ride-sharing app, these two companies partnered to give Uber riders a chance to control each ride’s music with Spotify. Spotify provides a unique service in a busy marketplace, while Uber offers riders a chance to listen to their own playlists.
Ford and Eddie Bauer
The car manufacturer partnered with the apparel giant as a way to create unique advertising opportunities for both companies. Select Ford vehicles were outfitted with premium Eddie Bauer features like leather seats, while Eddie Bauer accessories like luggage were printed with the Ford logo.
Here are five ways a strategic partnership can help you grow your business.
1. Access to new customers
A strategic partnership means access to new customers, and embedded in this is an opportunity for free advertisement. When you pair with another business, you’ll be able to reach their clients as well. This is an incredibly effective marketing strategy, stretching your reach into double the clientele.
There’s almost no reason for the other company to turn you down if your business is strong enough. For example, Starbucks has no reason to decline Google’s free attempt to secure some marketing, because Starbucks benefits just as much.
The most important part of developing a business is widening your reach in the public. The more people see your product in an area they frequent, the more they will find your product elsewhere.
2. Opportunity to reach new markets
Along with an extended reach into a wider variety of customers, your brand is now able to expand its horizons in areas previously unexplored.
Consider the example of Google and Starbucks. If you were to associate a company with coffee, you may not have thought of Google. However, after this partnership, internet and coffee make a lot more sense. With this relationship established, similar opportunities to this could arise for both companies.
Google is so widely popular that this kind of publicity isn’t necessary. However, for a startup company, a partnership like this is an incredible opportunity. If your business has the chance to explore a new frontier [in this example, coffee shops], you could use this publicity to benefit both you and your partner.
3. Added value for previous customers
Another benefit to a strategic partnership is the value it adds for your loyal customers. Reaching customers during a growth period can help solidify loyalty. You want to show returning customers you care, because it encourages one of the most powerful marketing tools: word of mouth. Customers who hear positive comments about your business are going to tell their friends about it.
You want happy customers who promote your services. By establishing roots with other corporations, you increase the chance that you will pick up some of these free advertisers.
4. Brand awareness
Another important result of a partnership is the construction and increase of brand awareness. The most crucial thing you can do for your small business is getting out there and letting people know who you are. When you partner with other organizations or influencers, there are more chances for people to be exposed to your logo and other branding, creating organic curiosity.
Brand recognition is an important first step in becoming a household name. You can accomplish it by pairing your service with a successful partner that carries a large customer base. Once you’ve done this, soon other companies will be asking you to partner with them.
5. Brand trust
Brand trust spawns naturally from a good business partnership. When people see you work well with others and generate profit from it, they will be more willing to help out and support your business. It’s all part of creating a healthy, stable and productive network. You’re only as good as the people helping you out, so make sure your business is a worthy investment for them.
You want to create positive relationships with everyone, and partnerships help you meet and work with new people who could help you grow your business when you need it most. Partnerships work in many ways to spur growth and attention for your business; the most important aspect is accepting the right partner.