Two heads are better than one. That phrase is as true with solving puzzles and composing music as it is for business. It’s also the idea behind strategic partnerships and collaborations. In a strategic alliance, two companies with similar audiences and shared values intertwine their efforts to create new opportunities for both parties.
Partnering with another brand that can offer added value to existing customers can be very beneficial. For a truly strategic partnership, the alliance must generate more sales, expand reach, and appeal to existing clients across both brands. For example:
Starbucks and Barnes & Nobles. A comforting drink and a good book have always paired well. So, it’s no surprise that in the early 90s, Starbucks became the exclusive coffee supplier for Barnes & Noble. While shopping online for a book is convenient, Starbucks and Barnes & Noble have given book lovers a reason to visit a store in person.
Target and established designers. Target’s reputation for its partnerships is legendary. They’ve partnered with renowned architect Michael Graves, prominent fashion designers Isaac Mizrahi and Lilly Pulitzer, and most recently, well-known television personalities Chip and Joanna Gaines. Each partnership has made high-end designers more accessible to a mass audience and positioned Target as the go-to retailer for chic, affordable design.
While these examples are of big-name businesses, small businesses can also benefit from strategic partnerships. Before you can determine what type of collaboration would most help you, you’ll need to assess your own needs, priorities, and challenges. Then you can focus on what to look for in a partner. Consider the following:
Do you have a similar target audience? Your audience does not have to be precisely the same, but you should share an appeal to a similar demographic. For example, if your audience is wealthy, you don’t want to partner with someone that offers short-term personal loan services.
Do you offer complimentary services or products? You want to make sure your products and services add value to your partner’s customers, but do not compete with them. You will get the greatest benefit from a partner who offers a different service from you with a similar audience. For example, a paint company would do well partnering with a home design company.
Do both parties benefit? The most successful strategic partnerships are those where the benefits are mutual.
Partnering with another business can be incredibly successful. It’s an effective way to improve business and boost awareness. Now that you know what to look for in a partner, you are ready to start your search. Best of luck, and keep me posted!