The right business partner can help scale your business, build your brand reputation, give you access to a broader audience, and help increase your market share.
It’s easy to get caught up and excited about partnership opportunities, but consider a few things before you sign on the dotted line. Australia’s online restaurant booking service Yumtable announced a partnership with Uber to launch #UberDINING–a stress-free dining experience–in April 2015.
Uber is known for its strategic partnerships with like-minded startups such as business travel management company Concur, on-demand music-streaming service Spotify, and pay-per-mile car insurance service Metromile.
It is probably the most important question companies should consider when seeking potential partners. You can be excited or bogged down in the nitty-gritty details of a partnership, but understanding the why will keep you focused on the end goal.
Will the partnership offer branding benefits? Will it onboard customers? This is where you need to assess how the partnership will bring in more customers and grow your business. Know the outcomes you want the partnership to deliver and work backward.
This might sound like an obvious tip, but your ideal partner will have a similar target audience, or one you are targeting. When we looked at collaborating with Uber, we found an untapped market with the same consumer profile. People who use Uber are those who have active social lives and love on-demand technology, like Yumtable. The same person who books a restaurant one or two hours before heading out will be the same person who books an Uber 10 minutes before they have to leave.
Both brands deliver a niche on-demand service. Like Uber and Airbnb, Yumtable doesn’t actually own the product they are selling, but provides an excellent experience and service helping customers conveniently get to their end goal. By collaborating with like-minded companies, these companies reach a similar clientele and effectively grow the business from the outside in.
Where there are benefits, there will be risks. You need to weigh up how it will affect the company immediately and in the long run. Business partnerships are a long-term strategy–not a quick win to get publicity. If you get the first few partnerships right, it then builds a solid foundation in attracting future partners.
Cast your eyes forward to the future and try to answer where you want to be six months, 12 months, or even two years. Then decide whether this partnership is going to make sense now and in the future.
The best way to grow a business is to grow with competitors–not necessarily to compete against them. Collaborating with a competitor like Bookarestaurant.com was a long, thought-out decision with a positive outcome. It wasn’t to eliminate the competition, but rather use their knowledge to help band together and build a brand that combined as many benefits and offerings into one place for the customer.
Like all areas of business, perception is key. It’s important to choose brands with a great reputation but you also want to work with businesses that will make good partners. When assessing a potential partner, look at which brands they’ve worked with in the past. Reach out to those brands and ask them how the partnership worked out. Don’t hesitate to reach out to those outside of your industry for a fresh perspective.
It’s also good for startups to build relationships with companies involved in social work. In saying this, it is ideal to work with an organization that stays true to your key messages, goals, and demographics.
Jonha Revesencio is a marketing strategist with over eight years’ experience developing digital media strategies for finance, FMCG, and tech companies. She has worked on the interactive and digital campaigns for brands such as IKEA, Dove, Panasonic, and OCBC Bank, among others. Connect with her on LinkedIn and Twitter @jonharules.