Founders and CEOs across business sectors agree that strategic partnerships are essential to compete in today's economy. Smart companies leverage partnerships to acquire customers and enter new markets. Partners can be a source of new ideas and insights that can impact business performance.
Effective strategic partnerships are powerful when starting or expanding a business. However, the stats prove that even at the corporate level, maintaining a mutually advantageous strategic partnership can be difficult.
A 2014 study of 330 senior-level executives by the CMO Council and Business Performance Innovation found that 85 percent of business owners believe partnerships are essential for success, but more than half (67 percent) don't have formal partner strategies.
I coach CEOs whose businesses are growing fast enough to be on the Inc. 5000 so they can continue their businesses' growth. One huge error they make in partnerships: lacking patience. These leaders create their own reality. Yet when partnerships don't quickly spark opportunities, they move on to other potential partnerships. Leaders who make strategic partnerships a central part of their business development know how to deepen relationships before asking for referrals.
One example is Amber Vilhauer, founder of NGNG Enterprises, who's quickly grown her website development and marketing business by thoughtfully developing partnerships with well-known brands in her industry such as Heroic Public Speaking and Mirasee. Vilhauer told me her success with partnerships has generated more than 60 percent of her multi-million dollar business over the past five years. Here are the steps it takes to develop similarly high-performing partnerships:
1. Determine the potential partners in your market that align with your core values.
First, recognize and establish your core values and business outlook. Then you'll be able to seek out others who meet those same expectations. Just as you select employees that fit your values, you want partners who naturally align with your values. Taking the time to find alignment upfront will make it easier to develop win-win relationships that last.
Mike Michalowicz, author of Profit First, about how to ensure you have money at the end of the month. Michalowicz shared his best tip for finding new partnerships, "Ask your best customers what other vendors they currently work with and love. Explain that your goal is to work collectively with those vendors to better serve your mutual clients." This technique expands your network overnight, and your clients come out winning.
2. Establish and develop authentic relationships.
Connect with the individual who best aligns with the kind of partnership you want in a genuine way. Connect without any expectation of where the relationship is headed.
Vilhauer explained that while developing a relationship and identifying a need between businesses, she thinks about how she can serve them first. "I look for every opportunity to make introductions within my network, create positive experiences, and stay top of mind."
When you reach out in service first, you add value to the other person's business or life before expecting anything in return. Creating authentic relationships is an important part of the process -- and likely the reason why many businesses don't maintain their strategic partnerships. This part requires patience as the relationship deepens.
3. Creatively ask for the exchange/strategic partnership.
At this point, you want to show them -- not tell them -- that you have a proposition that benefits everyone. What you offer allows them to scale their business and, in turn, grows your company with an influx of client referrals.
You can offer a commission. However, what's more important is actually boosting the business's value and reputation through your partnership. Vilhauer said, "Not only am I enabling my partners to provide additional services to their clients by simply referring to me, but their reputation increases as I provide superior customer service and experience."
Think about how partners can use your company for fulfillment of services they previously didn't offer -- a huge added value.
4. Over-deliver, again and again.
Once you're taking on new business through your strategic partnership, be sure to provide the ultimate customer experience. Vilhauer said, "My goal is always to elevate every experience. I love the first Law in The Go-Giver by Bob Burg which says, 'Give more in value than you can take in payment.'"
Consistency and value are central to bolstering your business reputation and your partner's. Remember that you want to give them stories worth sharing with their connections.
5. Ask for feedback.
Ask clients for feedback, ideally in the form of a video testimonial, which you can share with your strategic partner. This solidifies the relationship and gets partners excited to refer more people your way. That testimonial can go on your website, YouTube and other social media platforms.
All good things take time. Be patient in creating authentic, long-term relationships. Investing in your partners ensures there's value-added for everyone.