4 Reasons Why Strategic Partnerships are Important for Business
Strategic partnerships have been around forever. They usually include a formal agreement between two parties to pursue mutually beneficial objectives. There may or may not be a contract involved, but both parties clearly understand the objectives of the alliance and pledge to work together to achieve the desired results. Here are a few examples of how such relationships can help your business.
1) Attract New Customers and Expand Market Coverage
Perhaps the most popular reason for entering into a strategic partnership is access to new markets and customers. By forming a strategic partnership, companies can service larger territories without investing in additional infrastructures or expanding their distribution network.
For example, a coffee delivery service could partner with an office supply company to deliver office supplies on their regular route in exchange for a presence in the office supply company’s physical stores.
Both companies are exposed to potential new customers and expand their territories without having to add stores or additional routes. This arrangement can also add value to both customer sets. Visitors to the store can save time by not having to visit a coffee shop, and business owners get their office supplies automatically replenished by a company that is coming to the place of business on a regular basis anyway.
2) Build Brand Awareness
Coffee giant Starbucks aggressively forms alliances with places like medical facilities, airports and other locations to provide coffee service to their customers. Visitors recognize the added value and appreciate the convenience of having brands they recognize readily available. The Starbucks strategy has increased their overall brand awareness and many local and regional companies can easily develop a similar strategy.
There are many ways service companies can offer mutually beneficial services to customers of, say, a local movie theater. For example, a mobile car washing service can place a prominent ad in the lobby suggesting that movie patrons text them for a “wash while they watch.” The car washing services then offers all movie employees a free wash or discount on services for helping the car wash extend their brand.
3) Broaden Product and Service Offerings
If you already have a loyal customer base and would like to broaden your product line you may benefit by aligning yourself with a company who offers complimentary products. A good example might be a company who provides computer service partnering with a company who offers audio visual services.
Each business has its own set of products, suppliers and systems, and they may have very similar customer bases. Sales and service personnel likely understand both technologies. By pooling their resources and cross training sales and service personnel they may be able to enhance their product lines with minimal investment in additional inventories or people.
4) Shore Up Perceived Weaknesses
If your business is new to an area and you do not have a strong local presence, customers will likely wonder about whether or not they can trust you to do what you promise. By aligning yourself with an established company who already has the trust of its customers, you may shorten your time to market.
Here is an example, if you are new to, say, a local lawn care service, you may want to align yourself with a proven landscaping business who, for whatever reason, no longer provides lawn care service. They may focus on the more profitable landscape design opportunities and be happy to refer your lawn care business in exchange for you promising to refer all landscape opportunities to them.
This is a true win-win situation where you garner new business and your customers will immediately trust you because you are associated with a company that has already proven themselves in the local community.
At Glympse, we take very seriously our strategic partnerships for many of the same reasons listed above. We are proud to partner with companies like HERE Technologies, Descartes, Drivosity, Salesforce, Oracle, Microsoft, Apigate, Bestrane and so many more.