5 Types of Strategic Partnership Models to Achieve Greater Results
Strategic partnerships are integral to modern business strategies, and they offer a versatile framework for achieving greater results. When considering the multitude of partnership models available, it's crucial to align the chosen type with your specific business needs and objectives. These models provide innovative ways for separate companies to collaborate and capitalize on shared strengths and resources, ultimately leading to sustainable growth.
One prevalent model is the technology partnership, where partner companies with complementary technological expertise come together to develop and integrate cutting-edge solutions. This approach fosters innovation and can be especially beneficial for a growth company seeking to stay competitive in a rapidly evolving market.
Another widely adopted model is the strategic alliance, which encompasses various forms of collaboration, such as joint ventures, equity partnerships, and non-equity partnerships. These alliances allow businesses to pool resources, share risk, and tap into each other's customer bases, enhancing their market reach and competitive advantage.
The concept of a strategic partner is central to these models, as they are the entities with which your company forms these alliances. These partners can range from suppliers to distributors, service providers to fellow businesses in your industry, and even cross-industry collaborations that open new opportunities.
In the world of business, it's essential to understand that these partnerships are not just about shared resources or market access. They often involve a deeper integration of business models and strategies.
Ultimately, the choice of partnership model should align with your specific target audience and the channels you intend to leverage to reach them. Effective partnerships can provide a significant boost to your go-to-market strategy, enabling your business to expand its reach and achieve greater results in a competitive market landscape
What Makes for a "Strategic" Partnership in Business?
Strategic partnerships are the cornerstone of effective business strategies. These collaborative endeavors, often referred to as marketing partnerships, exemplify the power of planning and foresight in achieving success. To embark on this journey, the first crucial step is the identification of your ideal partner. This process involves a comprehensive assessment of why they are well-suited to promote your offerings to potential customers, what aligns them with your brand and its culture, and where their reach could effectively introduce your product or service.
The first step you need to do in order to identify your ideal partner is to ask several questions:
- Why are they suitable to propose what you sell to potential customers?;
- What makes them the right fit for your brand and its culture?;
- Where would they end up selling your product or service?
Within this intricate planning, the business aspect is deeply ingrained from the outset. It's an integral part of the partnership's foundation. The key lies in ensuring that your ideal partner's target audience, whether it's a tightly knit small business network or a broader, expansive audience, closely matches your ideal customer profile. This alignment creates a symbiotic relationship where both parties stand to gain.
A strategic business partnership, therefore, embodies the essence of cooperation between two or more companies, rooted in the principles of mutual benefit. The emphasis here is on mutual benefit rather than exploitation. Such partnerships are built on the premise of harnessing the collective strengths of all sides involved, working collaboratively to ensure the sustainability of the partnership, with the ultimate goal of achieving both financial gains and long-term success.
What Types of Strategic Partnerships Are Out There?
When embarking on a new business venture, one of the "obvious" choices is to form a partnership that involves the splitting of equity among one or more business partners. This approach allows for the distribution of risk associated with launching a new venture, offering a collaborative means of sharing responsibilities and resources.
Nevertheless, it's essential to note that this type of partnership falls under the purview of various laws, contingent on the specific country of operation, and it comes with its distinct set of rules and legal requirements that must be diligently addressed.
For companies operating in the B2B domain, particularly those that have already surmounted the initial hurdles of gaining traction in the market, the focus often shifts toward "channel" partnerships, in contrast to the more conventional equity-based business partnerships. These channel partnerships concentrate on external providers and collaborators who share a common brand vision and have the capacity to deliver added value to your customers.
Unlike the internal shareholding structure of traditional business partnerships, channel partnerships emphasize the establishment of synergistic relationships with external parties, thereby extending the reach and impact of your offerings while fostering an environment of mutual benefit for all sides involved.
How Does a Channel Partnership Work?
Channel partnerships represent a dynamic form of strategic collaboration between companies, facilitating the alignment of external providers with performance metrics closely tied to your product. This synchronization optimizes their existing marketing and sales endeavors, ultimately bolstering their profitability and generating a favorable return for all parties involved.
Typically structured on a tier- or contract-based model, these partnerships are forged with clear objectives in mind, with the partner committing to specific goals that the provider actively supports achieving.
The core principle behind channel partnerships is the cultivation of an external salesforce, extending beyond the confines of internal efforts. This strategic approach permeates even the smallest business communities that may otherwise remain beyond your reach, broadening your market influence. However, it's essential to recognize that initiating a business solely through a channel partnership is not the recommended path.
Instead, it's advisable to possess a profound understanding of your target market before committing to such a partnership. This prerequisite arises from the necessity of equipping external providers with the knowledge of what resonates with the target market and what information should be communicated, ensuring that expectations are managed effectively and the partnership's success is maximized.
5 Business Partnerships To Consider in 2021
There's no shortage of examples today of what a successful channel partnership looks like. However, there are 5 specifically which are worth your time more than others.
Business Partnership #1: Affiliate Program
Affiliate partnerships, a relatively novel addition to the array of strategic collaborations between companies, possess the extraordinary potential to magnify the scale of a channel program by several orders of magnitude. The influence of individuals who have successfully garnered the attention of hundreds of thousands of highly engaged followers translates into a readily responsive audience poised for conversion.
Nevertheless, the critical facet of affiliate marketing hinges on the harmonious alignment of the right influencer with the right product or service, as a misalignment could jeopardize both the influencer's reputation and the credibility of the offering. This underscores the delicate balance of reputation and reach that defines this facet of marketing partnerships.
To establish a thriving affiliate program, several key steps must be undertaken. Firstly, a profound understanding of the required size of an influencer's engaged audience is paramount to assess whether reaching out to them is a worthwhile endeavor. Additionally, the prioritization of the channels through which you wish to appear and the desired perception you seek among the target audience are strategic considerations to be made prior to making any overtures to potential affiliate partners. Furthermore, it is advantageous to initiate contact with influencers once you already have an affiliate program in place. Doing so sets clear expectations from the outset, preventing protracted negotiations over compensation.
The implementation of PRM software tools, such as Kiflo, can facilitate the structuring of affiliate tiers and commission per sale, streamlining the onboarding process for influencers. By providing direct sign-up links, affiliates can seamlessly become part of your program, and you can actively guide them through the intricacies of promoting your product or service to their audience in a natural and unforced manner.
Crucially, the journey with affiliates extends beyond the initial engagement. Well-constructed affiliate contracts typically outline a predetermined number of appearances, ranging from 5 to 25, ensuring a sustained and fruitful partnership that continually reinforces the marketing impact on both sides of the deal.
Business Partnership #2: Co-Branding or Co-Marketing
Co-branding, a strategic marketing approach, involves the collaborative efforts of two entities coming together for specific marketing initiatives, encompassing a wide array of content marketing forms, such as guest posts, webinars, eBooks, research papers, and more. In recent years, B2B companies have displayed a heightened acumen in capturing audience attention through the art of invitation, especially when engaging industry experts in casual "chats" or webinars.
This approach serves as a potent catalyst, eliciting genuine interest not only from the expert's established audience but also from the companies themselves, creating a symbiotic relationship that typically yields beneficial outcomes for all involved.
To ensure the success of co-branding endeavors, a set of best practices should be conscientiously adhered to. Firstly, it's imperative to maintain a clear agenda, regardless of the nature of the proposed collaboration. This ensures that the partnership remains purposeful and aligned with its intended goals.
Equally significant is the need to exercise patience in the production process; it's essential to refrain from rushing into content creation unless one genuinely believes in the value it will deliver. Taking the time to comprehensively comprehend the points of convergence between the two collaborating brands and presenting them as an upsell can enhance the overall efficacy of the co-branding effort.
When executed with precision and dedication, co-branding emerges as an astute partnership strategy that can trigger a cascading effect, leading to invitations to industry podcasts and, ultimately, driving substantial revenue for the businesses involved. This strategic synergy often amplifies the reach and impact of each brand, contributing to a mutually beneficial, thriving partnership.
Business Partnership #3: Referral Program
Distinguishing itself from the customer referral program, this strategic partnership model is rooted in the premise of encouraging partners to refer their established business network to your company actively. In return, partners receive a percentage share of each sale or a one-time referral fee, creating a dynamic that goes beyond simple customer recommendations.
Unlike affiliates, who often address a broad audience, referrers operate with a more targeted approach. They deliberately channel highly qualified customers your way and, in doing so, effectively set the expectations on your behalf.
This distinctive mode of partnership not only translates into the acquisition of new business seemingly out of thin air but also endows the referrer with a unique role as an advocate for your company. Their endorsement carries a level of trust that can be unparalleled by other partnership types, fostering a deeper connection between your brand and the referred customers. This depth of engagement is typically rewarded with longer-term commissions, signifying the lasting impact referrers have on your business growth.
For instance, consider a scenario where a customer is referred by one of your partners. In such cases, the partner may be entitled to a substantial 20% of the recurring revenue generated from that particular deal for up to 6 months. After this initial period, the commission might taper down to 10%. Depending on the pricing of your product or service, this can amount to a significant financial incentive, making it an appealing proposition for partners who are keen to promote your offerings and cultivate a lasting referral relationship actively.
Business Partnership #4: Technology Integration
This distinctive form of partnership thrives when your business boasts a technology product with the capability to support integrations, much like a robust platform. The foundational pillar of this partnership lies in providing your partner with comprehensive developer documentation, enabling them to create a tailored solution that augments your existing features and extends the functionality of your product.
There are various of technology integration examples:
- Airtable's marketplace - A place to build an app on top of a powerful project management tool that is used primarily by marketers around the world;
- Zapier's "Platform" - A fully automated development environment to integrate any app with Zapier's famous software that makes automation accessible to anyone;
- ActiveCampaign's Apps - A single spot where 100s of third-party apps are listed as one of the most trafficked email marketing tools available on the market;
- Freshworks- A software solution to help businesses improve and manage their customer experience, sales, marketing, IT, and HR management in a simple and effective way, along with a successful partner program for SMBs in the B2B tech industry.
In essence, technology integrations represent a more advanced and sophisticated type of partnership, ideally suited for software tools that possess a platform-like structure and offer a certain level of functionality. These integrations often transcend the realm of basic software collaborations, delving into the intricacies of code and seamless interactions between different systems, thereby enhancing the overall user experience.
Even for smaller SaaS companies, the realm of technology integrations holds immense potential. They can leverage this approach by integrating key third-party applications directly into their ecosystem. This strategic move not only enriches the value proposition of their product but also assembles a more comprehensive and enticing package for specific user segments.
This way, technology integrations become a powerful tool for enhancing the attractiveness and functionality of the software, ultimately serving the broader goal of meeting the diverse needs of their customer base and remaining competitive in the market.
Business Partnership #5: Reseller Program
Undoubtedly, one of the most potent and multifaceted forms of business partnerships for B2B companies is the reseller program. This type of partnership represents the apex of third-party channel collaborations, involving a holistic and comprehensive approach that essentially initiates from ground zero and embarks on the transformative journey of turning a lead into a loyal customer.
Reseller partners occupy a unique position within the realm of third-party partnerships, as they demonstrate a remarkable level of commitment to a specific third-party offering. Their dedication extends beyond mere affiliation; they willingly incorporate the partnered product or service as an integral component of their own sales pitch. This strategic choice significantly elevates the intricacy and depth of their work, as they are entrusted with representing and advocating the value and utility of the offering to their own client base.
However, the substantial investment of effort and resources made by reseller partners in integrating the third-party offering into their sales approach comes with the potential for substantially higher returns. This elevated level of involvement and commitment often yields enhanced rewards, particularly when they successfully close a deal.
Through their intensive engagement with the partnered solution, resellers not only expand the reach of the product but also establish a compelling sales channel, fostering trust and credibility among their clientele. This deep level of collaboration underscores the transformative potential of reseller programs in boosting revenue and extending market presence, making them a cornerstone of success for B2B companies.
Scale Your B2B Company with a Channel Partnership
Forming a well-suited strategic alliance opens the door to a wealth of opportunities and invaluable insights that can significantly enhance your brand. These alliances are a potent avenue for generating more revenue and increasing the exposure of your products and services in the market. Whether your primary goal is to reduce operational costs or to create greater brand awareness, a strategic partner can play a pivotal role in helping you scale your business, allowing you to tap into new markets and leverage additional resources and expertise.
To effectively harness the potential of these strategic partnerships, you need a structured approach to manage and organize these collaborations. Kiflo provides you with a comprehensive solution to maximize the potential of your partner relationships!
From the initial stages of partnership formation to the final roll-out and ongoing management, Kiflo streamlines the entire process, making strategic partnerships more accessible and efficient for all parties involved. It achieves this by keeping partners engaged, fostering collaboration, and providing you with full visibility into their performance.
With Kiflo, you can gain valuable insights, track progress, and ensure that your partnerships are delivering the desired results.