Don’t go it alone: the benefits of strategic partnerships in business

Ever been pleasantly surprised to see your favourite coffee shop within a bookstore? That’s a strategic partnership in action: two separate companies working together without competing.

The practice has been around for decades now, and as more enterprises seek to innovate and broaden their markets, they identify new opportunities for these partnerships.

Why do strategic partnerships work?

On paper, they may sound a little odd, or even counterintuitive. For example, in the abovementioned retail example, there’s every danger the customer might become “distracted” by one product or service, and forgo the other.

But for those who get it right, strategic partnerships offer myriad benefits. For example: 

They encourage customer loyalty.

If you and your strategic partner identify a customer segment with two disparate needs, you can satisfy them both. Let’s say you’re a digital growth agency partnering with a copywriter – you can satisfy your client’s broad spectrum of digital marketing needs. Or your customers can enjoy a quick brew as they dive into a new book! This gives you access to a larger client base, who may also have bigger budgets. 

They broaden your knowledge.

Partnering with service industries, for example legal, financial or business consultants, can help you to improve your customer service and streamline your operations. In doing so, you’ll avoid potential pitfalls in the future, from cashflow issues to legal disputes. 

They can spark new innovations.

Strategic integration sees new products or services cropping up out of new partnerships. Just ask Uber and Spotify, who got together to create their “Soundtrack for Your Ride” campaign. This simple service allowed passengers to control their trip soundtrack – the ultimate personalised experience. 

How to get strategic partnerships right

Of course, not every marriage is made in heaven. You need to consider your strategic partners carefully by asking the following questions:

Who will they serve?

Partners generally serve your customers (coffee and bookshops) or your operations (business consultants). In the majority of cases, both you and your customers benefit – better business models mean better customer service. But you need to identify the key benefit before you sign on the dotted line. 

Are they actually a competitor?

Beware false prophets, as they say. What may start as a mutually beneficial relationship with work referrals could turn sour. If you believe your partner has the capacity to offer the same service you do, it could inspire some underhand tactics. Always establish trust first.

Will they improve my ROI?

Strategic partnerships are all about value. For example, if the cost of a financial advisor is less than what he/she saves you, then it’s worth the investment. However, don’t be tempted to partner with somebody who sounds good on paper, but actually offers very little in terms of business growth.

At The Growth Guys, we’re proud of our professional relationships, which allow us to serve our customers and grow the business. Always make sure those are your two key objectives with any strategic partnership.