Partnership as an effective tool for business development

Lord Habravchane, I suggest today to consider what the "Strategic Partnership" is.

Please do not judge strictly, this is my first article to the public. Wellcome under cat.

Today I propose to consider the following questions:

1. What is a partnership?
2. Types of partnerships and goals?
3. How to start developing a partnership direction?
4. Where to go next?

To begin with, let's understand a little what a strategic partnership is in a living and highly successful example.

1. What is a strategic partnership?

In the early 80s, a young and ambitious company, which at that time existed on the market for just over five years, with the little-known name Microsoft, concludes an agreement with IBM. The agreement stated that all computers of the new generation of IBM PCs will be equipped with the DOS operating system developed by Microsoft.

As a result of this partnership, Microsoft began to receive a reward for each personal computer sold. In the 83rd year, the company's revenues amounted to $ 55 million, plus, the company became the most influential developer in the market, and in 1990, Microsoft’s share in the computer market exceeded 90%. Today, Microsoft's capitalization is $ 807.66 billion.

Of course, Microsoft were not pioneers in this method of business development.

The first to see the benefits of a strategic partnership were airlines. After the first airlines entered into a number of agreements with shipping companies and hotels, the business began to grow actively, and in the entire affiliate chain.

After the appearance on the market of such an effective tool, the so-called “affiliate program” pumped into other areas of business.

Today, an affiliate network, we meet every day in the form of various cashbacks, discount coupons for purchase at partner stores, etc.

I summarize all of the above, we can call a strategic partnership an effective tool for promoting your brand, your products or services.

2. Types of partnerships and goals?

Well, let's start with the fact that there are only two types of partnership - the first, registered partnership, with the participation of 2 or more persons and the second type - cooperation, which is not legally fixed, but exists and is supported by all the participants.

As for the forms of organization, we can distinguish the following areas from them:

• The most common form is a commercial partnership.

The case when the target audience of one business is the same target audience for another business.

Example:

Car dealerships.

No more interested in business partnerships than dealerships.

Their main goal and profit in the partnership is not to get an opportunity to resell cars, but to be able to serve the cars they sell.

A classic dealership always includes the service area, where most of the net profit of a business is earned.

No matter how absurd it may sound, but very often, the DC can give you a car with a big discount, practically not earning it, but in this way he will get a loyal customer who will come to him for annual maintenance and repair.

In turn, the car manufacturer, from such a partnership, receives another sales channel for its products, while not selling anything on its own, which allows it to concentrate more on production.

• The next form of partnership is not a commercial form.

This format implies voluntary cooperation and assistance in promoting a product or service.

An example of a non-commercial partnership, I can serve as social networks.

2 group owners agree on mutual exchange of audience and begin to invite their readers to the partner group by means of publication in their group of links. Or when a well-known blogger invites another well-known blogger to his channel for joint recording of an episode. It turns out a kind of "redirect" to the audience.

• The third form of partnership is limited partnership.

In such a partnership, each of the parties is solely responsible within the previously agreed framework. Often, this type of partnership is used in “partnership coalitions”, when the entire cycle of contacts with a client is divided into different artists.

As an example, we can distinguish construction companies operating on a turnkey basis.

In such a scheme, of course, there will be a partner, within whose framework control and project management will be included. There will be a partner who will solve all problems with legal and technical documentation. The third partner will be responsible for the supply of building materials, the fourth partner will be building. As we see, here each of the partners is personally responsible for their part of the work.

Often, several completed projects are enough for this type of partnership to grow into a full-fledged association such as LLC or JSC.

• The next form of partnership, not to mention is the full partnership.

Such a partnership implies the responsibility of all parties to this cooperation.

Where can we see this type of partnership in everyday life?

We can see this experience in any product jointly developed by several companies. A vivid example is the active popularization and use of Apple Pay. Thanks to a partnership with Master Card, which owns one of the largest customer bases in the world, Apple is very quick and efficient to expand the market for non-cash payments.

Since the end of 2014 and today, about 127 million people use Apple pay for no contact payment. None of the major operating payment systems has so far shown such a dynamic of growth.

• And the final, but by no means the last of all possible forms - a strategic partnership.

This form encompasses cooperation with a long-term perspective. This kind of partnership is inherent in an already ready-made business, which has consolidated in the market and is now beginning to expand its niche. With this type of cooperation is not so simple. If the business partner is a larger market player than your company, plus your business sector is strategic for the development of this partner, there is a large share of the likelihood that your company will be merged or absorbed. It is good if this affiliation will be mutually beneficial, but you can never rule out the moment when your business will be selected or driven into such a framework that its continued integration with another business will be necessary for its continued existence. Therefore, speaking of strategic partnership, you should always predict the prospects and results that you can get.

3. How to start developing a partnership direction?

Always, before carrying out any processes aimed at promoting or developing your business, you must start with yourself.

If you have decided what your company does; how the company positions itself in the market; what value your business bears to the client; who is the customer of your business; where this client is found - you have already done a titanic work, you can safely skip this step and move on to the next step, but if not, I strongly recommend that you go through these points and answer all the questions. I also want to say at once that, without answering all these questions, honestly, to yourself, you can never build an effective partner channel.

After you have determined for yourself the key parameters of your business, proceed to search for partners.

What you need to pay attention to when searching:

• With which business your audience overlaps.

Everything is simple, the same audience can interact with business in different market segments, all you have to do is determine where your customer will go after or before buying from you.

• Determine the level of touch with the client.

A very important factor of partnership is the moment of interaction between all partners and the client. In this regard, it becomes important to understand at what stage of work with the client, your business will be included.

It is good if you sell a main product to a customer, for example, a smartphone, and then the customer goes to the partner’s website and registers a SIM card for himself, and then the customer goes to the store of another partner and buys accessories to a new smartphone. In this case, you can not worry about the fact that the client “offended” by the partner will come to you and will not begin to buy anything from you.

But what if in this whole chain, you are not the first touch?

Here you will be helped only by communication with a partner, studying the moments of his work with clients. If this is not done at the partner search stage, there is a chance to lose time, since with a partner who is not trying to increase the loyalty of the audience, you are unlikely to be able to effectively build a business.

• Communication.

Here you have done all the previous steps, studied everything, wrote out a huge list of companies with which you could potentially cooperate.

The question arises: how to start to communicate? How to find common interests?

There are many methods of attracting partners, in fact they are not very different from the methods of attracting customers. Nevertheless, there is one that has been tested over the years: “letter + phone call”.

In order to communicate with a potential partner on the phone, you need info.

The letter must be informative, concise and contain a specific partnership offer. When writing a letter, you need to understand that his goal is not to convert your partner to you, but first of all close him to the meeting. It does not matter if this meeting is “face then face” or, for example, via Skype. And a phone call always serves as an occasion to show interest in the letter, following the example: “Good afternoon! My name is Ivanov Ivan, I sent you a letter in the mail. Orient, received? ". After such a call, 99% of potential partners will definitely come to read the letter you sent.

• A meeting.

When forming a partner channel, it is very important to meet with partners. And it is equally important to instill this in partners from the first meetings. While you are working through mail correspondence or in general, between your companies are communicating dedicated managers, there can be no question of the development of a partner channel. Only direct interaction between business leaders and joint development planning can produce results, but routine work and some parts of processes where constant monitoring is not required can be safely delegated to managers.

4. Where to go next?

So, you have already identified partner companies for yourself, talked with them, concluded a number of agreements depending on the type of your cooperation, but what next? What are the interaction options?

In fact, when all the formalities are settled and you can begin to jointly implement your products and services, planning will be a very important point. Agree with a partner to discuss the "roadmap" of joint activities.

This stage can cause difficulties only in the organization of the activities themselves. Partners may not always have enough competencies or a competent employee.

Despite the huge number of activities that can be carried out in the framework of the affiliate program, I single out the following for myself:

• Joint promotions and bonuses, the so-called cross-marketing.

Cross-marketing has obvious benefits:

1. Increased customer flow, due to the partner’s audience.
2. Formation of a unique offer on the market.
3. Reduces marketing budgets.
4. Increases loyalty.
5. Allows you to further increase brand awareness.

An example of “cross-marketing” is the Oral-B toothbrush, which comes exclusively with Duracell batteries, and buying Happy Meal in MacDonald's restaurant chain you will surely find a toy from the cartoon that is going to the cinema.

• The next tool that I highlight is the internal discount program or the so-called “co-branding cards”.

Surely each of you, in the wallet is at least one bonus card, no matter what the store. It either gives you a so-called “loyalty discount”, or you accumulate points on it for further calculation by them.

With a co-branded card, the situation is similar, but it allows you to use bonuses not within one store or a chain of stores, but within a partner network, even in not always connected niches.

With the help of this program, which involves and retains the client by means of bonuses, cashbacks, points, partners stimulate an increase in the number of operations in their affiliate network. Which in turn, increases the volume of sales and all of this implies.

• Joint product.

This tool can rightly be attributed to the "co-branding", but still I would select it as a separate direction of development.

A common product can often solve a number of problems related to the technological possibility of its production, the lack of competence in one direction or another, the inability to quickly enter the market, and simply as a workaround no economic sanctions.

Today we are observing how Western investors, in order to circumvent anti-Russian sanctions, simply take and develop a joint product, based on existing proposals in the Russian Federation.

Or another example, when Microsoft could not include the voice assistant Cortana, in the new product Windows 10, just because the Bing search engine is not served in the Russian Federation, it was decided to release a joint product with Yandex. The result of this partnership was the voice assistant "Alice", which is now actively gaining popularity.

• Informational partnership or “Cross-promotional partnership”

You can meet a similar activity 5 times a day, in everyday life.

You make a purchase of a set for sushi, and as a gift you will receive a coupon with a 10% discount on the order of a set of Japanese knives in a partner shop.

Or you make a purchase in a pastry shop, and at the exit from the store you can find a shelf with discount coupons to a network of dental clinics.

• And, perhaps, the extreme activity that I would like to talk about is the joint holding of events.

I just want to say that not every business needs to hold any events for its clients, but if such activities fit into the current model of your business, you cannot ignore this.

First, by holding a joint event with a partner, you can share the costs of organizing, secondly, the audience reach will be more, thirdly, the loyal audience of the partner is not always your loyal audience, so a joint event will allow you to get to know it, increase trust in you and your company.

PS Nowadays, it’s hard to sell a product, but it's easy to sell a complete solution! Take a look around, for sure you will find something to add and your UTP.