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Strategic Partnerships

Bob Ryan, About Purpose, Inc. ©2003

 

I have been spending a great deal of time and resources on marketing lately, and I have had the opportunity to develop relationships with some really dynamic people and their companies. In today’s marketing parlance, I have been working on building strategic partnerships. 

I’ve used that term in a general sense for a while, but am now learning that there are many shades and hues to the concept. I’ve also come to the conclusion that any business that is not pursuing strategic partnerships is not doing justice to the business or its clients.

 

Explore with me, if you will, some levels of strategic partnerships. I will give you my abbreviated view of the WHAT, the WHY, and the HOW of strategic partnerships. In the process, I think you will find that there are opportunities for you and your customers that you simply cannot pass up.

WHAT are Strategic Partnerships?

 

  1. 1.    At the simplest level is what I will call Product or Service Exchange. This is a simple agreement between you and another business to provide products or services to each other’s customers. It may be for free, such as an arrangement I am working on with RJ Ahmann Benefits in which we will provide some basic training to our respective clients in certain areas. For our customers, it is simply a value-added service that will broaden their knowledge and reach of resources.

  2. Other examples include agreements to provide a seminar to a professional services organization in return for a display booth at the conference, or free samples of your company’s air fresheners in the cars repaired by your local garage. There could be a fee structure involved, but the main point is that two providers agree to expose their respective products or services to each other’s clientele.

The mutual expectation is some marketing outcome, such as brand exposure, referrals, or an expanded database.

  1. 2.   A bit more sophisticated are Combined Offerings, in which two businesses come together to offer a product or service that neither could have offered alone, and which benefits their current, or new clients. I am working on such an arrangement now with the Law Offices of David August Clark. I have many clients who do not have even basic personnel policies and procedures, but I don’t have the HR background and legal knowledge to provide them. Clark, with 25 years of experience in HR and labor applications, is limited by his inability to spend face-to-face time helping clients implement good policies and procedures.  Our plan is to put together a “package” that includes a solid template for an employee handbook, coupled with consulting time to customize and implement the policies. (This is still in the development stage, but talk to me if it sounds like something you could use).

Combined Offerings are usually seamless from the view of the customer, but always offer additional value to the relationship. Another typical example is a company providing a distribution channel for another company’s product. The manufacturer gets access to new customers while the distributor improves its ability to meet customer needs. The customer wins because two companies have developed a strategic partnership.

  1. 3.   Another variation on the strategic partnership theme is the Preferred Vendor Relationship. This is often a more formal relationship, usually sealed by contract, and meeting certain measurable expectations, such as ISO standards, certain quality characteristics, etc. For the last two years I had such a relationship with an international on-line consulting group. I paid a fee, passed some in-depth quality measures, provided current references and was then promoted to this group’s clients within a certain range of services. (I am no longer in that relationship. More on that in the “How-to” section).

 

Manufacturers have been using this type of partnership for years to assure that their customers receive only top quality parts in their product. The preferred vendor benefits from a somewhat exclusive, and usually, long-term contract to provide the parts as long as quality standards are met.

  1. 4.   Becoming very common are Co-Marketing Relationships. As suggested by the name, two companies with complimentary products or services, combine their names and resources to market their respective wares. I have partnered with the national personnel development firm, Gevity People 1st, to promote our two businesses in an August campaign. My goal is to attract members to The Alternative Board TAB©, a group concept that focuses business owners on strategic, rather than operational outcomes and holds members accountable to their peers. Gevity is interested in selling services and products that relieve owners and managers of the distractions of dealing with HR details that take time and energy away from their core business.

 

By entering into a co-marketing relationship, we increase the range of services we can offer to prospective clients. By doubling what we have to offer, it is more likely that they will respond to our marketing efforts.

 

Of course, there are mergers and acquisitions, which are strategic partnerships that create a single entity out of two or more, but that is both beyond the scope of this article and my expertise!

 

How to Develop Strategic Partnerships

 

  1. 1.   Identify goals – This is clearly the first step. Make sure you think through what you are trying to accomplish and what the end result for your customer is to be. Put it in terms you can measure. I recently failed to put together a strategic partnership with a local bank. In part, it was due to my not having learned what their goals were. So, they saw all the risks, but none of the benefits. I still believe they can be a great resource to my customers, but I have to start over with that one.

  2. 2.   Due Diligence – Enter into a period in which you weigh the proposed partnership. Can your partner deliver what you need? Is it the right partner to work with? What is it going to cost in both hard and soft dollars? (For a free cost evaluation worksheet, go to my article: Cost Benefit Worksheet or contact me by phone or e-mail). I mentioned a “failed” relationship with the international online consulting outfit. Had I done my homework better, I would have discovered that none of the so-called “boutique” consultants were making money out of this partnership. Now I’m poorer but wiser.

  3. 3.   Letter of Agreement or contract – Even if you are entering into the simplest of strategic partnerships, create a letter of agreement outlining the goals, your respective contributions and a period after which you will re-evaluate the partnership.

  4. 4.   Evaluate – Finally, set a specific date to evaluate the relationship. Refer back to your goals and if need be, restructure the relationship, alter your goals, or end the partnership.

 

Summary

 

Notice that in every type of strategic partnership, there is a win-win-win involved. We can’t be all things to all people. We can improve our ability to serve our customers through building relationships with others. In the process, we will improve customer satisfaction, increase market share and broaden our own contacts for the future.