A strategic partnership provides a fantastic opportunity for both parties to expand and grow. In fact, according to the findings of the GE Global Innovation Barometer 2016, 77% of executives reported positive financial results from collaboration, up from 64% in 2014.
Sounds great, right? Well, some partnerships look good on paper but fail in reality. In order to succeed, partnerships must follow three golden rules.
Partner2Grow’s Managing Director, Simone Novello, recently sat down with 2UE presenter John Stanley and discussed these rules for a successful partnership, as well as how Partner2Grow works. You can watch the interview below.
Let’s now expand on each of the three golden rules of partnership that were discussed in the video, so you have a better understanding of what to look for when it comes to joining forces with a strategic partner.
1. Strategic Partnerships Must Be a Win-Win
Right from the get-go, strategic partnerships must have a win-win intention. Far too often companies are just looking to fulfill their own objectives. These types of one-sided partnerships usually end badly for both parties.
The best way to get what you want in a partnership is to help give your partner what they want. If you compromise, you set the standard. Your strategic partner is likely to reciprocate the generosity you’ve shown.
Here’s a great example. Recently, Virgin Australia and Air Canada came together to provide their customers with a more comprehensive range of airline services. Prior to the partnership, travellers on Air Canada could fly in and out of Sydney and Brisbane only. And, Virgin Australia passengers could only fly to Los Angeles.
Air Canada wanted to attract customers from all around Australia, not just the east coast. Similarly, Virgin Air wanted to attract customers that were flying to Canada, not just the United States. Now, Air Canada customers will have access to all connecting Virgin Australia flights in the domestic network, and Virgin Australia customers will be able to fly from LA to Montreal, Toronto, Vancouver, and Calgary. This is a nice example of a win-win scenario that could result in more business and profit for both parties.
2. Your Target Markets Must Be Aligned
The better the target market alignment, the better the partnership’s chances to succeed.
There is no point partnering with a company that is looking to attract the polar opposite customer to you. For example, if you own a patisserie, your target market would be quite different to that of a bodybuilding gym. A partnership just wouldn’t make sense, unless you come up with a new product or service that will be positively relevant to the gym’s target market. This will result in more time, effort, and money involved without the certainty of success.
When considering a company to partner with, you need to ask yourself whether or not your customers would be interested in their product or service. If the answer is no, the partnership is unlikely to work.
If we look back at the partnership between Virgin Australia and Air Canada, we can see that the two companies want to attract more business from passengers traveling to and from Canada and Australia. Their target market is aligned. Virgin Australia’s customers and Air Canada’s customers overlap, meaning they are able to work together to expand and improve the quality of their services, all the while earning more business for themselves.
3. Values Must Be Aligned
A strategic partnership with win-win intentions and aligned target markets can fall apart because of differing values. So if you’re looking for a fun, easy, and lucrative partnership, make sure your company’s values match that of your potential strategic partner.
If your values don’t align, the result can be detrimental.
An example of this is the partnership between Australian wildlife warrior Bindi Irwin and SeaWorld. Bindi Irwin is known for her conservation efforts and compassion toward animals. SeaWorld, on the other hand, has been accused of mistreating its sea life. When Irwin partnered with SeaWorld in 2014, her commitment to the wellbeing of animals was questioned. This ended in the public defamation of her character and her family’s brand. The most important thing is to go in with eyes open and prepared for the public perception of your partnership – brand alliance can be powerful – done well it’ll work for you – done poorly it’ll definitely work against you.
Finding the Perfect Strategic Partner
If you want to grow your business, innovate your products, or improve your services, a strategic partnership is an excellent option. But finding the ideal partner isn’t always easy. Maybe you don’t have your “partnership radar” on. Or you’ve got the perfect partner in mind, but you’re not sure how to approach them.
Partner2Grow helps businesses just like yours find and secure partnerships that follow the three golden rules. The outcome? Your business has a better chance of growing beyond what you could have achieved on your own. Click here to get started.