Strategic partnerships are a crucial growth component for businesses seeking performance improvements in a dynamic and competitive market.
Collaborating with other businesses can shorten growth timelines by leveraging the strengths of your partners, open new markets, and enhance your overall value proposition.
However, some brands think they’re “not ready” for strategic partnerships. Others are jumping headfirst into too many, too fast. And others are opting for partnerships that are fine, but not the most pragmatic and highly leveraged.
Whichever category you fall into, we’re about to cover all things strategic partnerships, including:
- What is a strategic partnership?
- 4 benefits of strategic partnerships
- Marketing vendors VS strategic marketing partners
- How to build strategic partnerships
What is a strategic partnership?
When two (or more) businesses form a mutually beneficial relationship, that’s a strategic partnership.
The partnership helps both businesses accelerate growth in ways that would be difficult, expensive or time-consuming to achieve without it, and can take many forms, including:
- Joint ventures
- Co-branding initiatives
- Distribution partnerships
- Technology collaborations
- Supply chain partnerships
- Licensing and franchising
The importance of strategic partnerships for businesses
At every size and stage of business, strategic partnerships play an important role in the overall performance mix, which should always be diversified across a number of channels of activity.
However, most of the brands we meet fall into one of three categories:
1. Rushing headfirst into 99 partnerships
Brands in this category see the upside of strategic partnerships, but struggle to articulate the quantifiable value of each partnership and the function it performs.
This often creates organizational clutter and pulls resources away from vital tasks like strengthening the core product, plugging the holes in your marketing funnel, and ensuring the brand’s domain authority (with the host of knock-on benefits that one provides).
2. Allocating resources for partnerships that are priority #3, not priority #1.
Instead of partnership-overkill, brands in this category struggle with poor partnership timing. Often formed based on pre-existing relationships between business leaders, these brands have entered into partnerships that are performing a useful role, but not the most urgent role.
- Why is THIS partnership important?
- Why is it important NOW?
Partnerships best suited to address secondary goals should be implemented after prioritizing partnerships designed to advance topline goals.
3. Delaying strategic partnerships until “later”
But later just keeps getting pushed…later. Brands in this category adopt too narrow a view of what a strategic partnership can be and when they believe they’ll be “ready” to enter into one.
Strategic partnerships are not an advanced marketing level that you’ll only earn access to after adding another 0 to next quarter’s revenue – they’re a growth accelerator unto themselves.
The #1 benefit of strategic partnerships – The Apiary 50% Rule
Awareness is the first and most important benefit of strategic partnerships.
Even the most globally-recognized brands continually invest in awareness. No industry, business model, or revenue category is exempt from the need for consistent net new eyeballs.
As a result, business partnerships that drive awareness are the first (and most repeated) type of partnership we help client-partners create.
The Apiary Rule: 50% of all marketing activity should be geared toward awareness.
The 50% Rule doesn’t just mean that if you’re going to spend $100, you should spend $50 on awareness.
It means that 50% of your ENTIRE marketing effort (internal staff, external contractors, ad spend, website design and development, content strategy, lead generation strategy, etc) should be generating awareness.
A carefully-constructed strategic partnership can be one of the fastest and most cost-effective ways to expand reach and increase awareness – the lifeblood of every business.
The other benefits of strategic partnerships
2. Access to new markets
Entering new geographic markets and/or product categories can be exponentially easier and quicker by partnering with an established brand that can open the door to a larger customer base and revenue gains.
3. Third-party validation
If 50% of a brand’s marketing activity is already geared toward awareness, it would then be advantageous to pursue a business relationship that will support the deeper stages of the funnel (Education and Nurture). This third-party validation can provide salient information that helps your customers make a purchasing decision while strengthening the brand’s credibility by association.
4. Shared expertise and resources
Partnerships allow you to tap into the expertise, knowledge, and resources of your partner. This can provide a range of benefits, like improving existing products or services, increasing operational efficiency, and reducing costs.
Partnership Priority #1: Your strategic marketing partner
The highest performing funnels are holistic. Instead of disparate parts, the entire customer journey is designed as a unified system with levels.
Excellent marketing, therefore, requires comprehensive optimization of the ENTIRE collection of activities occurring across this unified customer journey.
The value of seeing your performance engine as a single unit and optimizing it holistically makes sense to most people. But in application…
Most brands hire marketing vendors to perform a task or two, which can deliver a measure of short-term success but not long-term gains.
The scope of a marketing vendor relationship is, by definition, limited. Even with an extensive list of deliverables, they’re often tasked with focusing on one or two parts of the funnel only.
This is 100% anti-holistic and in our experience, the short-term boost of a “successful” optimization in one area frequently causes long-term reductions in other parts of the funnel.
The most common solution? Rehire them or another marketing vendor for another targeted optimization, which causes the same result, and on and on the cycle goes. This is not an efficient use of budget, talent or time.
Marketing vendors deliver micro solutions. Strategic marketing partners deliver macro growth strategy AND THEN implement the micro solutions.
Unlike a vendor, a strategic marketing partner takes on responsibility for GROWTH across the board – not just this metric or that one. The whole shebang.
A strategic marketing partner has a holistic understanding of the entire house that is your business, which positions them to offer strategic guidance that exceeds what’s visible to a marketing vendor who’s only ever been allowed in your living room and kitchen.
The best strategic marketing partners are typically seniors who’ve seen so much that they can offer you nuanced strategic guidance beyond the initial performance optimization that you sought them out for.
Far from invalidating the need for an in-house marketing team, a strategic marketing partner extends your in-house capacities and the results you’re able to generate by helping you acquire additional strategic partnerships at the right time and in the right sequence.
Say hello to your very own Performance Marketing Consigliere!
Sure, we’re biased because we act as a strategic marketing partner to our client-partners. But even if you never hire us, this is still our strategic partnership advice to all brands everywhere.
The Apiary POV: Your first and most important strategic partnership is the marketing partnership that a) optimizes your WHOLE performance ecosystem, and b) based on their holistic understanding of your brand and its market opportunity, supports you in developing additional strategic partnerships.
How to build strategic partnerships
Working closely with your strategic marketing partner, the typical steps for establishing a mutually advantageous strategic alliance are:
1. Goal & metrics definition
Clarify your baseline performance goal and KPIs, and determine the single source of truth for viewing and tracking that KPI.
2. Identify potential partners
Research industry leaders with the same target audience and complementary products or services.
3. Assess partnership fit
Alignment on audience and product category isn’t enough. Team fit, brand values, and business goals also need to sync. Linking your brand’s name to another’s is a big deal. Be discerning.
4. Reach out to potential partners
After your initial research has narrowed the list of candidates, express your interest in exploring a reciprocal partnership. Lead with the benefits for them, and then how it’ll help you.
5. Negotiate terms
If initial discussions go well, it’s time to negotiate partnership terms. Align on scope, each party’s responsibilities, and revenue sharing (if applicable).
6. Finalize your partnership agreement
Formalize your partnership plan with clearly documented goals, objectives, timelines, milestones, and metrics for measuring success. Lawyers will probably be needed.
7. Activate and monitor the partnership
Launch the partnership and track its progress. Consistently measure effectiveness, maintain regular communication with your partner, and consider adjustments to improve results for both of you.
TL;DR on strategic partnerships
- A strategic partnership is the formation of a mutually beneficial relationship between two (or more) businesses.
- The first and most important partnership every brand needs is a strategic marketing partner.
- Strategic guidance before/during the selection and finalization of a partnership is crucial to ensure the partnership supports holistic growth, instead of a single metric in isolation.
- 50% of all marketing activity should drive awareness. As a result, after establishing a strategic marketing partnership, a partnership that drives awareness is usually our first recommendation.