Of course, many businesses do a fine job of excelling independently, but external partnerships can help bosses tap into audiences and markets that otherwise wouldn’t be possible on their own.
This tactic is one that has been used to great effect by high-street clothing company H&M. The retailer’s annual partnerships with luxury brands including Versace and Jimmy Choo have seen its collections receive consistent overwhelming demand. From Bud Light’s partnership with Tinder to Tesco’s partnership with Children’s Food Trust, companies are realising that combining forces can increase both scale and revenue.
And according to Patrick Gallagher, CEO of courier and delivery business CitySprint, businesses that have formed partnerships are, on the whole, more successful. “The benefits of collaboration are clear,” he said. “Some 86 per cent of SMEs who partnered with others during the economic downturn are now in better shape financially and less concerned about the future of the business.”
With that in mind, here are three tips to get you started on finding the right partner and giving sales a boost.
(1) Recognise your company’s faults and try to plug the gaps
For many SMEs, leveraging an established brand’s resources can be a very effective strategy for establishing a foothold in a new market. Why is this? Because the business gains association with, and endorsement from, a brand that the market already trusts and recognises.
While Amazon may not be an SME, it serves as a great example. Morrisons has been struggling with a declining market share and came up with the ingenious idea of paring up with the tech giant – the result of which will see Amazon sell hundreds of Morrisons’ products via its Prime Now and Pantry Services.
“Having a credible fresh food supply in the UK will allow Amazon to build scale and expertise and really make an impact on the UK food retail market,” suggested Bernstein retail analyst Bruno Monteyne. “Tesco could soon be about to find out what it’s like to be David rather than Goliath.”
But it’s not Morrisons’ only partnership. Ocado provides Morrisons with software to be able to pick orders directly from stores in areas that are too far away from its warehouses. Ocado’s CEO, Tim Steiner, described the deal as a “win-win” for both sides.
It just comes to show that no matter how large your business may be, the key to partnership success is in choosing a company that not only excels in its field, but is willing to innovate and, most of all, can improve your customer experience.
Read more about customer service:
- How to cultivate customer experience across your business in 2016
- The secret sauce behind Richard Branson’s customer service success
- How do you improve customer service? Just look at WhatsApp’s one billion user milestone
(2) Network, network, network
Think of joining a business network much like having a go at a normal network event. While growing revenue is critical to all companies, finding new markets, new buying points, or new needs in existing clients is increasingly difficult. That is why firms desperately need all employees, not just salespeople, to be able to effectively uncover new opportunities. In the same way, a business network will enable you to more easily identify potential customer groups.
It’s also worth trying your hand at working with a trade union, or joining a nationwide firm such as the Federation of Small Businesses (FSB) or the Forum of Private Business (FPB). Being a member of a business body brings the support of a large network of assistance and information to small companies, enabling these businesses to have a collective voice and boost credibility in professional circles. Such bodies will also offer resources, assistance and market insight.
To get the best results, it’s worth asking yourself what type of business would best suit your company and deliver the most benefits.
(3) Using cross promotion to increase sales
Cross-promotion is an efficient and cost-friendly way to advertise any business and increase sales. In a nutshell, it involves publicising another company’s services or products to your customers in exchange for some promotion in return. This not only helps your company stand out in a crowded marketplace, but also gives you access to a new targeted group of customers through the other business’ network. It’s a win-win situation for both parties, and small businesses in particular have a lot to gain. Take, for example Doritos and Pepsi in the 2011 “Fire & Ice” campaign, where both brands advertised the other’s new product on their packaging.
According to Cirkle, the UK PR firm behind the idea, it was PepsiCo’s most successful trade PR campaign of 2011.
By selecting a non-competing company to promote your products with it enables you to identify merchants in your market that offer complementary services and activities to your business. This emphasis the importance of finding the right partnership for your business.
Also, Juan Lobato, the CEO of BaseKit, explains why transparency should be the focal point of any business considering partnerships.