Since the dark ages, traders and businessmen have relied on strategic partnerships in conducting their businesses. Fostering relationships with strategic partners can offer mutual benefits for all parties involved. This is a tool that you can leverage if you want to accelerate growth or to take advantage of your partners resources. With that said, you need to be smart about choosing companies and individuals you choose as strategic partners to gain the most out of the relationship.
The simplest way to define a strategic partner is any company or business with whom you enter into an agreement to work together to achieve more success. Strategic partners may or may not belong to the same industry. Also known as co-branding, the ultimate goal is to expand market reach by tapping into a new market or audience.
What Types of Partnerships Can You Pursue?
Before you learn about the benefits of entering into a partnership agreement, first it is time to examine the different types of partnerships you can enter into.
- Marketing Partners – You can partner with another company or business within the same industry and you can use the referral method to bring in more customers (and revenue) to each of your businesses.
- Financial Partners – You can work with other businesses to fill financial roles or provide solutions for your business needs. For example, an accounting software company will provide an HR/recruiting firm with tools to streamline their financial processes.
- Technology Partners – You can team up with technology experts or businesses specializing in technological solutions to meet your business needs or to streamline business processes.
- Strategic Suppliers – Developing good relationships with your business suppliers is a must. This will give you access to lower prices and discounts, or develop new products that are tailored to your business’ needs.
Half of your success in using this strategy is in choosing your strategic partner. Your goals must align with each other so that you can both work together towards reaching that goal. If you do that, you are one step closer to gaining competitive advantage.
Benefits of Strategic Partners for Your Business
Smart decision making is crucial to the success of your strategic partnerships. If you can do that, here are the benefits you can expect.
1. Expand your customer base.
This is the most obvious benefit that businesses wish to enjoy when they enter into a strategic relationship. The main goal is to widen your customer reach. Now, you are no longer marketing your products or services to your existing market, but you can also tap into the customer base of your partners.
Any business that your partner is involved with would also mean business for you. This is why you need to choose your partners wisely. In doing so, you will be able to double your client base in no time.
2. Access new markets.
Aside from expanding your customer base, you also have the ability to reach a new target market that you previously would not have access to. Therefore, you are not limiting the reach of your business to the existing customer base. By tapping into the new market, you have the potential to turn them into life-long customers for your business, as well.
Exploring new markets on your own would mean that you have to spend a ton of money on advertising. But if you leverage your strategic partnerships, you don’t have to spend additional dollars on advertising costs. This is why it makes sense to choose strategic partners that are complementary to your business products or services. It is an easy way to get your brand name out there.
3. Build credibility and brand awareness.
Credibility is the prerequisite to trust. If your customers trust your business, they are more likely to choose you over another company offering the same products or services.
Strategic partnerships enable you to build credibility. By attaching your name to another business with an excellent brand image, it also increases the strength of your own brand image based on their influence alone. Brand trust is, therefore, a natural spawn of good partnerships.
This is very important if you want to give your sales a boost, or to reach a wider customer base. Customers associate credibility with quality. If you are credible, then you must be able to offer them something of higher value and quality.
4. Access to knowledge and resources.
This is one of the most practical benefits that you can get from forging relationships with other businesses. You can leverage your partner’s knowledge and resources to forward your own marketing goals.
It gives you the opportunity to access knowledge that would help to grow your business. At the same time, you can leverage resources that are not previously available to you. But if you are to gain these advantages, you must also share your own knowledge and resources with your partners. This is how mutually beneficial partnerships work.
For example, one company provides the talent and manpower while another provides technological solutions and equipment. Each business has something unique to offer but they complement each other in the end.
5. Long term stability for your business.
If you want to be in the business for a long time, it only makes sense to engage in strategic partnerships. In doing so, you stay relevant for longer because you can leverage the access to resources, tools, and a wider customer base. You are no longer operating in isolation.
You can leverage the success of your partners, especially if they have been successful in your industry for a long time. With their help, you can lift up your weaknesses and also capitalize on your strengths. It’s no longer just you working on your own to achieve your business goals but you can get the help of your partner, too.
Having a relationship with your strategic partners is no guarantee that you can achieve your goals. It must be nurtured and developed to grow. It’s how you leverage these relationships that truly matter. Only then can you expect to enjoy the above-listed benefits for your business.
You might also enjoy our recent post on Transformation Leadership