Strategic Partnerships In Action
The potential to form profitable relationships is around us all the time. Take a look at your business and the challenges you face. Identify which of these challenges would be more easily addressed with the help of others.
Is your office rent too high? Does it cost too much to reach the types of prospects you need to reach on your own? Could you easily establish your credibility by riding on the coattails of a larger, related business?
All of these issues have the potential to be mitigated through targeted, decisive partner relationships. Once you identify other businesses that occupy similar circles of interest, begin to look for possibilities to pool talent, capital and experience to reach mutually beneficial ends.
Share Costs
Do you have business expenses that could be easily shared with others to lower your respective cash outlays? A group of PR firms bonded together, for example, to share the costs of a very expensive database with a high yearly subscription cost. By taking advantage of a group license agreement, each firm dramatically reduced their cost of access.
A gift basket company and a florist cut their mutual rent in half by co-leasing warehouse space in an expensive urban rental market. The arrangement worked well because each agreed to limit their work hours to specific times of day: the gift basket company worked mornings and early afternoons, the florist gained access from late afternoon to early evening.
Partnering With Competitors
This may seem like sleeping with the enemy, yet many businesses are learning that competitive alliances can become extremely rewarding relationships.
In the midst of slow sales and fierce competition, a cabinet manufacturer learned how competitive alliances could save the day. Out of nowhere, the company was presented with a dream contract to work for Disney World. The problem was they did not have the internal capability to meet the requirement that the job be completed in 95 days.
A solution came when the company formed an alliance with 3 of their competitors and successfully landed and completed the 2.5 million dollar contract.
“People who think small and who probably aren't going to be in business for a long time are truly afraid of their competitors. You have to ask yourself, Do I see the world as a zero-sum game—meaning for me to win, you have to lose? Or do I see the world as full of possibility where we can work together and build a bigger pie?” says partnering expert, Ed Rigsbee.
“If a person sees the glass of water as half empty, they're not going to be a good person to work with because they're going to come from a place that's win-lose. People who see the glass as half full are going to work better together because they're going to see that by working together, they can create synergy where one plus one equals three, where working together creates more than just double. And that's what we're looking for—how can we create that one plus one equals three? If you can't do that, why work together?”
Partnering To Access New Markets
There are countless ways to serve a bigger marketplace by partnering with businesses and organizations that have broad reach into new territory. Begin by looking for organizations that are well established or have significant clout in a new geographic area.
Florida company RGF Environmental Group took advantage of his state’s propensity to partner with local manufacturers to encourage exporting among local businesses. As a result, he had to hire 14 new employees just to handle new Pacific Rim business that came after a successful trip to Asia with local CEOs and a senior analyst at the Florida Commerce department.
Partners can also help compliment your basic strengths, shore up your weaknesses, and expand your capabilities. Kinko’s and Xerox understood this when they developed a nationwide network for faxing large-format documents. Because the service was targeted to architects, contractors and advertising firms, it boosted Kinko’s revenues and Xerox enjoyed additional equipment sales.
Getting Closer -- Sharing Space
Small businesses can lease space within existing business to cut costs or at local centers of influence as a way to visibly position themselves among a pre-established flow of customers. Many prominent businesses and franchises lease space side-by-side with other companies or sell both kinds of products on site (Noah's Bagels sells Starbucks Coffee).
Bundle Products & Services
Provide eye-attracting (or valued added) reasons for your customers to buy from you--and a free way to reach more potential customers—by bundling your services with other businesses.
Offer a joint product package with your cross-promotional partners, such as a summer get-a-way package. Team with a local sporting goods store, a luggage shop or any other business that sells summer travel-related merchandise. Each of you will offer deep discounts to one another’s customers and promote the package at your businesses.
Partner To Show Customers You Appreciate Them
Increase customer satisfaction and loyalty by giving your best customers a reward for their continued patronage, such as "frequent buyer" cards that give your clients gifts when they reach certain purchase levels. From here, offer your partner's products or services, as a free or discounted gift to your customers while your partners' customers will receive your service at a discount.
A travel agency might partner with a travel bookstore that will give one free travel book as their "frequent buyer" gift to each customer the agency sends their way. The bookstore will promote the agency that will offer a small discount or incentive on each bookstore customer who buys a travel book and shows the agent their receipt.
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Posted by: Mark Vane | June 22, 2007 at 04:15 AM