November 19, 2020 7 min read
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Did you know that placing certain plants side by side helps them grow better? Known as ‘companion planting’, the technique gives plants better protection from the weather, curbs pests and illness, and allows for greater pollination. Just like plants, businesses can benefit from partnerships. Forming strategic relationships with established brands can boost not only your sales but your credibility too, and amplify your mission.
For a partnership to truly be effective, it shouldn’t be built solely on profit but also on common goals. Your passion and purpose have to be aligned. A great example is Red Bull and GoPro — companies that advocate adventure and fearlessness in life. By working together, GoPro gains access to more than 1,800 Red Bull events around the world, while Red Bull receives an equity stake in GoPro.
I’ve also experienced first hand the power of partnerships with my baked goods company Nunbelievable, where for every cookie purchased, we donate a meal to someone in need. Because of our mission, we’ve been able to team up with other socially-minded companies including UNBLINDED, Tony Robbins, and New York City Relief. Being part of their events, outreach, and general messaging has propelled our impact and caused a significant uplift in our sales and visibility.
Partnerships can also offer a burst of inspiration for startups that are struggling to sustain revenue growth in the early days. Fresh ideas and novel processes from your partner can get you out of a stagnant phase and into more productive cycles.
With these benefits in mind, here’s how to harness partnerships to grow your business:
Orient your search around your ‘why’.
As always, start with your company’s why. Why do you do what you do? Why does that matter to customers? You could have a socially-conscious answer such as to improve access to education for more people or it could be more experiential such as to enable people to travel more comfortably. Whatever your why, be sure that it is truly representative of your brand and that you’ve already taken identifiable steps to make that mission a reality. If you haven’t got any proof that you’re committed to your why, you’ll find it more difficult to gain the trust of partners early on.
After you’ve nailed down your purpose, it’s time to find suitable prospective partners. Think of it like a dating app, you want to match with someone who has similar interests to you. Start big — reach out to established organizations and the media stating what you’re doing, what you’re looking for, and how to be contacted. If you don’t have a specific plan, that’s not a problem, general outreach can spread the word that you’re looking to collaborate.
Next, target more niche groups and platforms where you know you’ll find brands with common interests. This could be via LinkedIn groups, Slack channels, Meetup events, webinars, and through mutual connections. Pinpointing a partner is like any other form of marketing: make it part of all of your conversations, you never know who is listening.
Put your partnership in writing.
Before you enter a partnership, there are a few things you should have in order. Firstly, have a product or service that is already available on the market — this can be a prototype or early-stage version, so long as it is tangible. If you don’t have something that people can understand and use, it’ll be challenging to convince other brands of your message and get them to work with you.
When you are at a point where you’re ready to seal a partnership, write up the expectations on both your side and your partner’s side. If an organization is selling you their network, you need proof of that, and they need a stated return for that offering. A one-page term sheet should be sufficient to express what your company and theirs will be doing. You also don’t need a lawyer to confirm the document but it will serve as binding if needed in the future.
List all the actions you’ll be taking on the term sheet, like sharing creative assets, setting up a co-branded landing page, posting on social media, and other forms of agreed promotion. Don’t be tempted to make a year-long contract straight away — small increments of 30 days, 60 days, and then 90 days give you the space to reassess the partnership periodically and change the terms as necessary.
Accept the costs as part of the commitment.
A big obstacle for founders to overcome with partnerships is accepting that there (probably) will be a cost involved. That doesn’t mean you’ll have to pay to team up with another brand, but that you’ll be asked to meet some criteria beforehand. For example, a government-funded organization may request that you donate a set amount of resources, that you follow certain guidelines throughout your supply chain or that you have a minimum threshold of existing customers.
You might feel hesitant about having to jump through hoops for the sake of a partnership, but it’s important to remember that you’re investing in your purpose and your company’s growth. The money and effort you apply to any partnership would otherwise be spent on traditional marketing routes that are less reliable. With a partner, you have more defined details such as their customer reach, funding, tools, and campaigns, so you can make sounder predictions about the payoffs.
Whatever you have to give in order to cement a partnership is your way of showing how committed you are to the cause, and that you are a genuine player in that ecosystem.
Devise a fair structure for the partnership.
Every partnership will vary according to what each stakeholder can bring to the table, but you should anticipate being injected into crucial areas of your partners’ operations. If they host a big event, ask to have a booth, be mentioned on the schedule, and be included in all lead-up outreach. In exchange, if they need resources, human power or your time, you have to be flexible enough to return the favor and fairly determine how to equalize what you put in against what you get out.
Some partnerships may be more structured, and you’ll have to negotiate specifics. In these circumstances it’s good to ask for a pay-for-performance structure, where you offer a commission for every sale made through your partner’s network. Rather than spending money and waiting to see if there are returns, you can make an initial contribution and then pay weekly or monthly based on the value you get back.
Alternatively, you could shape a relationship with a few partners that you know you can trust to connect you with their consumers. For example, you could work with corporate groups who gift your product to their clients throughout the year. Rather than pay these groups, you can offer them a discounted rate. It’s win, win: they save money and you get your product and purpose advocated for.
Some of the biggest businesses in the world still welcome partnership opportunities, as they recognize that combining audiences, brand recognition, and messaging is a smart way to accelerate their mission. Remember, partnerships are essentially social proof — it’s an established company saying ‘we support what you’re doing’ and acting as a springboard for you to achieve it faster and better. This article is from Entrepreneur.com
