Canadian yoga apparel giant Lululemon earned over $1 billion in net revenue in 2011 – using little in the way of traditional advertising. Instead, the company reaches customers almost exclusively through partnerships – smart collaboration with other businesses and organizations that complement their brand, such as yoga studios and fitness clubs.
Strategic partnering also has a number of advantages for small to medium-sized businesses, says Ron Kunitzky, author of Partnership Marketing (published by Wiley). “Developing an affiliation with the right partner can increase awareness of your brand, create distribution for products and services in non-traditional channels, offer new revenue streams for your business and ultimately reach more customers,” he says.
Here are some ideas to help you develop your own partnership marketing strategy.
Outline your objectives
Start by defining what you want to achieve from teaming up with a strategic partner, says Kunitzky. Are you looking to move into a new market and acquire new customers? Gain access to technology or expertise? Add credibility from a major corporate player? Give back to the community by sponsoring a non-profit? Answering these key questions will help you decide what type of partner you’re looking for.
Finding a partner
According to Kunitzky, when considering potential alliances, it’s important to begin with a focus on your customer. “Think about your audience,” he advises. “What kind of partner would work for them and meet their needs?” He recommends finding out which companies are already targeting your audience and highly engaged with those customers.
Also, examine which candidates are the most profitable or most poised for growth. Select potential partners that best complement your business – for example, an adventure-travel agency partnering with an outdoor gear business, or a natural beauty products firm collaborating with a holistic spa. To find possible candidates, check with your local chamber of commerce, the Canadian Marketing Association, professional and industry organizations and parallel businesses in your industry.
Do your homework
Once you have a shortlist of two to four possibilities, learn as much as you can about their businesses, advises Kunitzky. “Understand your potential partner’s business as well as your own. Do your due diligence and find out how they do business, how they treat customers, and if their track record, reputation and values align with your own.”
This research will pay off in the long term, as your partner’s business will inevitably reflect on yours and vice versa. Also, develop a hypothetical customer path to better understand what your customer’s experience would be like when dealing with both you and your potential partner.
Once you’ve identified a possible partner, you need to show them the value of the partnership from their point of view. “Contact their owners or top-level management, get in front of the right people and pitch your partnership concept,” says Kunitzky. “Emphasize what is going to be in it for them; I call this the ‘partner-value proposition’.”
According to Kunitzky, the best strategic alliances offer value to both partners, enhancing each other’s growth and profitability. Outline how a partnership with your business will offer as many of the following as possible:
Alliances with non-profit organizations can also be an effective way for businesses to reach new customers (for example Home Depot/Habitat for Humanity or Dairy Queen/Children’s Miracle Network). But it’s important to recognize that the relationship will be different than a partnership with a for-profit enterprise, says Kunitzky. “Their drivers will be different in some cases,” he says. “Revenue won’t be the driver but instead they will want to provide value for their membership or donors.”
You will need to align with the non-profit’s objectives and their organization will likely be stretched for resources so be aware that decisions and processes may take longer. That said, a strategic partnership with the right non-profit can help your brand build goodwill, reach a new audience and ultimately grow your business. Sites like Charity Village can help you find an organization that complements your business.
Like these ideas?
Talk with your local BMO Bank of Montreal® Representative. They have a wealth of information and advice to help you grow your business.