Success By Design
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Building Strategic Partnerships
Smart businesses and professionals in all sectors utilize strategic partnerships to achieve new levels of performance, customer service, and/ or goal attainment. When exploring strategic partnerships, we must fully develop our individual strategy as well as a clear vision of what the strategic partnership must achieve. Only then can we begin the process of identifying potential partners, evaluating their individual merit and forging those relationships.
So you may be wondering, “What is a strategic partnership and how does it affect you?” Strategic partnerships come in many forms ranging from informal referral agreements to more global communities of interest, to formal contractual partnerships. The premise is that those involved are stronger together than they are alone.
I am a huge fan of strategic partnerships and in all of my business and career dealings I have actively sought out ways to utilize them to further my goals. The value of strategic partnerships can be profound whether you are a nonprofit professional seeking additional revenue, a main street business looking to grow your customer base, or a geographically dispersed cluster of like-businesses working to create perceptions of value for an emerging industry.
When exploring the possibility of strategic partnerships I like to use a decision tree to help me map out the potential risks and rewards. Below is a simple acronym to help you get started:
S –Specialization – In what way does the strategic partnership enhance your area(s) of specialization? A great example can be found in the relationship between a promotional products sales representative and a graphic designer. Their businesses actually can feed off of one another while each is viewed as actively addressing their customer’s unmet needs. Their ability to work together creates opportunities for increased customer loyalty for BOTH businesses.
T – Targeted – Does the strategic partnership help you reach targeted goals? Fundraising professionals would be wise to look their next special event through this filter. In the past I was able to double foundation revenue in a very short amount of time by simply using a well-established golf tournament as a “Who needs to meet each other” event. When your donors see you are able to help them reach their business goals, your fundraising goals will be rewarded.
R – Redefine – Does the strategic partnership redefine your business opening the doors to a different group of consumers or maybe garner higher price points? Communities of interest find this to work really well. There is a misperception that all great American wine must come from California. A community of interest made of competing wineries came together several years ago to create regional industry quality standards as well as shared marketing opportunities. The result was the establishment of a new and profitable industry in Kansas and a higher price point for many “local” wines.
A – Advantage – Is there aadvantage for the strategic partnership? Does the partnership help you create a competitive edge? A marketing professional and up-and-coming reporter can make great strategic partners. One is seeking frequent press coverage and friendly fire during unfavorable news events and the other is looking for career building stories.
T – Time – Does the strategic partnership give you a time advantage? Today’s just-in-time business world creates a high premium for quick execution. Subcontracting to a specialist who can provide very fast, high quality work will likely create more business opportunity for you down the road. If you cannot beat them, maybe you should think about joining them.
E – Energy – Does the strategic partnership create new energy in what may be a lagging market? Let’s face it today’s business world is changing very quickly and what is a hot product or service today may face extinction tomorrow. If the strategic partnership promises to create new energy… you would be wise to create it.
G – Geography – Does the strategic partnership expand your geographic reach? I know a computer service and repair company who has used this to their advantage. They use strategically placed drop-off locations inside other existing “niche market” businesses. My easiest location is at a Swiss clock repair shop. The clock shop tech checks in the computer and goes through some brief diagnostics while I look at all of the amazing clocks for sale. As the customer I am happy because I did not have to drive across town and the clock shop is happy because for Christmas I now have my eyes on a new clock I did not even now I wanted. SMART!
Y – Youth – Does the strategic partnership create opportunities to pursue younger customers? The under 35 group sees the world very differently. It is not enough to have a product or service they like, you need to effectively speak to their core values … which are probably different than yours. Sustainable businesses are figuring out how to attract this emerging consumer base and the right strategic partnerships can really help.
Yep! STRATEGY - It may not be the cleverest acronym, but it does work. More importantly so do carefully selected strategic partnerships. If your business has fallen off in recent years or maybe in need of a larger customer base, exploring the value of strategic partnerships is a great, low cost way to create new momentum.