In any given week, I talk to numerous businesses, particularly those in startup or growth mode, who struggle with finding the tactics to access and grow a customer base in line with strategy - and to do so cost-effectively. To extract profit from those tactics is often a bigger challenge.
“2018 data from a sample of 6,200+ businesses, showed that 63% of marketers listed traffic & lead generation as one of their biggest challenges”
Quantifying ROI to justify budget
“28% of marketers struggled with securing the budget needed to execute”
The challenge of securing budget is undoubtedly tied to the 40% of marketers who struggle to quantify ROI, but we’ll address that topic in another article. This article aims to give guidance to marketers who are struggling to execute on a small (or performance-based) budget, by creating and leveraging strategic partnerships.
What is a strategic partnership
So when I speak of strategic partnerships, it’s important to clarify the definition. A strategic partnership is an alliance of shared activity and co-creation of value that offers mutual progress towards achieving strategic goals. (Key point here - it pays for both parties to have and understand their strategy).
Understanding the exchange of value
As with any marketing activity, the crucial starting point to finding and approaching potential partners is to understand the exchange of value. What does our organisation need, what value do we offer. What does a strategic partner need , what value do we offer them. Below is a basic framework to give structure to this thinking. It is a simple concept that your team can draw up on a whiteboard and run sticky-note sessions on.
Understanding each of these elements requires deep knowledge of your strategy, as well as some left of centre thinking around what is needed by a third party and what can be offered.
It is worth noting that this framework can be used to both analyse the fit of a potential partner, or as a starting point to identify the types of partner that could be sought out and nurtured. Read our case study on how finding a strategic partnership drove a 10-fold increase in audience for a Northland Golf Estate for the cost of a round of golf, 2 nights accommodation and a dinner for two.
What do we need, what do they offer.
This is your starting point. From a strategic perspective, analyse the roadblocks you need to remove in order to deliver on your strategy. This could be “we need to cement our position as market leaders through social validation” or “we need to expose ourselves to the market quickly”, or “we don’t have a qualified database for this segment to talk too”. Whatever the need, understand it, don’t just state it.
Next, consider what activity could satisfy that need. If you need to expose yourself to market quickly, who gives you a mechanism to do that? Is it an industry body, complimentary business or can it be found in areas of non-consumption. Take Xero as an example here: “We need to rapidly grow SME market and mind share to cement our position as the simple, reliable and mobile accounting platform. Who can offer us direct and authoritative access to financial decision makers in SMEs?” Answer: Their accountants.
What do they need, what do we offer?
This is the flip side of the equation and the area where mutual value must be created to build a lasting partnership. Particularly if you are the smaller power of the two.
Look for challenges that a partner may have in executing their strategy. What is their strategy? What do they need to achieve to deliver value on that strategy? Are there any legal restrictions in place on what they can and can’t use as tactics? Take a leaf out of your own book, and see if the challenges that you face and your needs are similar to theirs.
The final step, once you have ascertained their need, is to understand what value you can offer in exchange. This is not an insignificant task and can be found financially or strategically. Again, take the example of Xero. Xero needed to access SMEs through accountants. With increasing demand for simplicity, flexibility and mobility from customers, accountants were faced with a need to facilitate that agility in order to remain relevant. Their need was: “We need to be able to support our customers in the new mobile age and emphasise our focus on financial planning to retain long term relevance and trust. Who can offer a quick transition into mobility that we can wear as a badge of honour? Xero.”
The result was a perfect fit. Xero had their beacons in the market. Accountants met the shifting needs of the market.
Application in the real world
In reality, this process is not just a one-pager. Finding a strategic partner requires, first of all, a clear strategy for your business. Taking the time to understand where value can be co-created, however, can be a huge springboard to all involved, provided the thinking is done at the outset to ensure a true fit can be found. When in balance, the right partnership offers symbiotic growth with minimal, or scalable, investment on both sides.