Strategic partnerships have mutual benefits and can lead to long-term profits.
- Strategic partnerships occur when two businesses combine forces to expand their brand reach.
- Co-branding opportunities add value to your company, increase brand awareness and create brand trust.
- Successful strategic partnerships include Spotify and Google, Sherwin-Williams and Pottery Barn, and McDonald's and Coca-Cola.
Strategic partnerships are nothing new. Companies have been working together for mutual benefits for a long time for a profitable future, with teams like Starbucks and Google, Spotify and Uber, and McDonald's and Coca-Cola. Strategic partnerships are also referred to as co-branding. Some companies may not even seem to have much in common, but the best strategic partnerships find creative ways to expand their audience and potentially enter new markets. The following is a list of strategic partnerships and how the companies combined forces to build brand awareness.
Strategic partnership examples
Sherwin-Williams and Pottery Barn
This strategic partnership benefited both parties by appealing to customers looking into home improvement projects. On the Pottery Barn website, users can coordinate Sherwin-Williams paint colors with the available Pottery Barn furniture pieces. The site also links to a blog with DIY tips for painting projects.
Spotify and Uber
Although the music-streaming service doesn't seem to have much in common with the ride-sharing app, these two companies partnered to give Uber riders a chance to control each ride's music with Spotify. Spotify provides a unique service in a busy marketplace, while Uber offers riders a chance to listen to their own playlists.
Ford and Eddie Bauer
The car manufacturer partnered with the apparel giant as a way to create unique advertising opportunities for both companies. Select Ford vehicles were outfitted with premium Eddie Bauer features like leather seats, while Eddie Bauer accessories like luggage were printed with the Ford logo.
Here are five ways a strategic partnership can help you grow your business.
1. Access to new customers
A strategic partnership means access to new customers, and embedded in this is an opportunity for free advertisement. When you pair with another business, you'll be able to reach their clients as well. This is an incredibly effective marketing strategy, stretching your reach into double the clientele.
There's almost no reason for the other company to turn you down if your business is strong enough. For example, Starbucks has no reason to decline Google's free attempt to secure some marketing, because Starbucks benefits just as much.
The most important part of developing a business is widening your reach in the public. The more people see your product in an area they frequent, the more they will find your product elsewhere.
2. Opportunity to reach new markets
Along with an extended reach into a wider variety of customers, your brand is now able to expand its horizons in areas previously unexplored.
Consider the example of Google and Starbucks. If you were to associate a company with coffee, you may not have thought of Google. However, after this partnership, internet and coffee make a lot more sense. With this relationship established, similar opportunities to this could arise for both companies.
Google is so widely popular that this kind of publicity isn't necessary. However, for a startup company, a partnership like this is an incredible opportunity. If your business has the chance to explore a new frontier (in this example, coffee shops), you could use this publicity to benefit both you and your partner.
3. Added value for previous customers
Another benefit to a strategic partnership is the value it adds for your loyal customers. Reaching customers during a growth period can help solidify loyalty. You want to show returning customers you care, because it encourages one of the most powerful marketing tools: word of mouth. Customers who hear positive comments about your business are going to tell their friends about it.
You want happy customers who promote your services. By establishing roots with other corporations, you increase the chance that you will pick up some of these free advertisers.
4. Brand awareness
Another important result of a partnership is the construction and increase of brand awareness. The most crucial thing you can do for your small business is getting out there and letting people know who you are. When you partner with other organizations or influencers, there are more chances for people to be exposed to your logo and other branding, creating organic curiosity.
Brand recognition is an important first step in becoming a household name. You can accomplish it by pairing your service with a successful partner that carries a large customer base. Once you've done this, soon other companies will be asking you to partner with them.
5. Brand trust
Brand trust spawns naturally from a good business partnership. When people see you work well with others and generate profit from it, they will be more willing to help out and support your business. It's all part of creating a healthy, stable and productive network. You're only as good as the people helping you out, so make sure your business is a worthy investment for them.
You want to create positive relationships with everyone, and partnerships help you meet and work with new people who could help you grow your business when you need it most. Partnerships work in many ways to spur growth and attention for your business; the most important aspect is accepting the right partner.