Partnering with another company is one of the most effective ways to expand your customer base. Besides free advertising into several new demographics, strategic partnerships also allow you to provide more value to your existing customers.
For instance, the Uber and Spotify partnership gave the music streaming service an additional avenue to reach customers who may have never heard of it. It also gave Uber something that no other ride-sharing company can offer its passengers -- the ability to control the radio during their ride.
Such partnerships are just as beneficial for businesses of all sizes, provided each partner knows how to build, cultivate, and make the most out of the partnership. Once you've found your partner, work together to build something that will benefit you both for years to come. Here are four ways to make sure you set your partnership up for success:
1. Set clear expectations.
You should have a strong connection with the business you partner with, but hammering out the details of that partnership has to be more technical than emotional. Define the business structure (partnership or corporation), what the partnership should accomplish for each company, and what constitutes each partner's domain. This will eliminate confusion for both companies' leaders, employees, and customers.
It will also help you avoid complications and disagreements over which partner should handle what. When you started your company, growth may have meant each employee taking on whatever roles were needed for the company to succeed. For your partnership to succeed, however, you must give every employee and manager a specific title with clearly defined responsibilities.
2. Consider your partner a part of your team.
Clear and well-defined roles ensure there will be no overlap in offerings that could generate competition between you and your partner. Such conflicts are a significant reason why up to 80 percent of business partnerships eventually fail. It may temporarily delay the partnership, but you'll both flourish if you take time to thoroughly integrate each other into your teams.
That's the approach that Nike and Amazon are taking in their partnership to open a digital Nike store. The potential for overlap and other conflicts is substantial, so they're taking their time to iron out every detail first. Your partnership, however, shouldn't be just about benefiting from the other company's technology or customer base. To make the partnership as valuable as it can be, it should be about learning, growing, and benefiting from each other's knowledge and experience, too.
3. Give the partnership room to grow.
Remember, you're not just pooling resources; you're also combining your abilities to scale as quickly as possible. Exago, an embedded business intelligence company that partners with Walmart and Autotask, explains that flexibility and extensibility are key in tech partnerships: "BI products, especially embedded ones, must be able to cover the full gamut of client needs -- even as they change or evolve over time."
From a technology standpoint, an application's extensibility is how capable it is of supporting custom programming, a potentially game-changing asset to its partner software. From a business perspective, extensibility is a vital element in any partnership because both your partner's and your ability to extend resources can mean freedom for employees to innovate new products, customer engagement strategies, and more. A valuable partnership should be capable of sharing resources and adapting over time.
4. Make honesty and transparency your watchwords.
Establishing a successful partnership and ensuring it has the ability to grow are essential, but they don't guarantee that you will succeed. Long-term success also requires honesty and transparency from both partners. That means maintaining open and frequent communication as well as personal interaction as often as possible.
Make your strengths and shortcomings known upfront and insist on the same level of honesty from your partner. Both companies have to be transparent about what they lack and what they offer before deciding whether the partnership is a good idea. You also have to remain transparent for both sides to capitalize on every opportunity and learn from every failure. Honesty is the best policy when building any relationship. You'll get more out of your business partnership if you make it a priority.
Partnering with the right company may be the next step in your own company's evolution. Your partnership's future will depend on how you approach, build, and maintain it. To make your partnership last, follow these steps to create something that both partners can truly build together.