In this article:
- Why Your Company Needs A Partnership Program
- Types of partnerships
- Strategic Partnerships
- Channel partnerships
- Tech partnership
Why Your Company Needs A Partnership Program
Partnerships like strategic alliances, channel partnerships, and tech partners allow your company to expand its reach to new markets, drive revenue higher, decrease churn rate, and much more!
One of the essential aspects that allow partnerships to generate success is that the collaboration is mutually beneficial. Organic expansion is achieved by partnering with a company in a new market or co-marketing and co-selling efforts. Additionally, partnerships are known to increase brand "stickiness" between a company and their partner and a company and the customer—this increase in stickiness results in a significant decrease in churn rate and an increase in revenue.
Similarly, partnerships create widened sales reach through partner sales enablement. With the additional information to use from a partner, there is an increase in sales knowledge which dramatically benefits both companies. Sales enablement increases win rates. Further, selling to a partner's customer increases a company's win-rate by up to 39% and the potential deal size by up to 45%. All benefits considered business-to-business partnerships are a great way to expand reach into new markets, convert leads to customers, and increase revenue.
Types of Partnerships
The purpose of partnerships is to increase revenue growth and market reach. Often, companies' partnerships do not produce ROI or visibly contribute to revenue growth. One of the reasons for this is not having the right type of partnership program. To shed some light on this confusion, we'll look at the differences between strategic partnerships, channel partnerships, and tech partnerships.
Strategic Partnerships, Strategic Marketing Partnerships, Integration Partnerships
Strategic partnerships are a relationship between non-competitive companies whose products or services complement each other. A great real-world example of a strategic partnership is between Starbucks and Barnes and Noble1. When customers enter a Starbucks within a Barnes and Noble, they are more likely to browse books and the same for the inverse situation. The companies mutually benefit from the partnership and mutually experience revenue growth.
A similar benefit can arise from a strategic marketing partnership. Mutual promotion between companies of different industries, or at the very least, different consumer markets, allows a company to reach further into the other's market. A great example of this strategy would be the collaboration between Taco Bell and Doritos. The combination of these products and promotion from both companies brings in new customers from both markets. This, once again, drives revenue and helps to create consumer trust in a company, as they are likely to take the word of a promotion from a company to whom they are already loyal.
Strategic partnerships can also take the form of an integration partnership, in which a company's product, or aspect of it, is integrated into the product of another. Once again, these companies are not competitors; therefore, they have plenty to gain from this integration. A real-world example of a strategic integration partnership would be between Nike and Apple, eventually creating Nike+2. This partnership benefits both parties by gaining customers from either industry, which will drastically increase revenue and brand stickiness.
Channel Partnerships are another form of partnership that, when implemented, serve to increase revenue, decrease churn rate, and more. Generally, channel partnerships take the shape of promotion external to a company. This can come from affiliate partners, wholesalers, private sellers, and other distributors3. These partnerships act as an intermediary between the company and the consumer. However, due to this sales effort distribution, external partners are offered agreed-upon commissions per unit or service sold as compensation for their efforts.
The benefits of channel partnerships are extensive, beginning with expanding market promotion to new audiences or potential customers. Affiliate marketers are ever-increasing in number with the rise of social media, making it simple to expand to new markets through their promotion. Similarly, third-party distributors prove to customers that a service or product can be trusted, as customers have already placed their trust in the external party conducting the marketing. This increases revenue directly while simultaneously expanding the reach and relieving the promotional effort required from the company itself.
Tech partnerships are relationships between two tech companies that are mutually beneficial. Somewhat similar to the above strategic integration partnership real-world example, Waze and Spotify's partnership is a helpful example of a tech partnership. Within the Waze app, Spotify can be connected to engage the consumer with directions and music, respectively. This connection drives consumers to use both services at once, therefore expanding their respective customer bases and driving revenue simultaneously.
Partnerships are a great marketing strategy for companies looking to expand to new markets, drive revenue higher, decrease churn rate, and increase brand loyalty. Between various strategic partnerships, channel partnerships, and tech partnerships, there are many ways to implement them into your marketing strategy today. However, with the multitude of options, it can be challenging to know where to begin.
Finding an ecosystem management tool is key to help you get started. A free tool, like Sharework will allow you to find the right partners through account mapping. Over 1,000 companies are already using this app to create meaningful partnerships, and their case studies prove just how drastically Sharework has positively impacted their business. Get started on www.sharework.co today!