Strategic partnerships can help you grow your revenue at reduced costs and increase your exposure to potential customers and prospective employees. These partnerships, including channel and affiliate partnerships, can help you attract business and talent by leveraging the strengths of each partner.

Why strategic partnerships are so important

In a strategic partnership, two or more individuals or companies share resources for their mutual benefit and success. As defined in an article on Indeed.com, they share risks and rewards as they work to create value for each partner, offering information, services and other resources that the other would otherwise have no access to or could only access through a financial exchange. These strategic partnerships offer each company an opportunity to reduce expenses and increase business, allowing them to expand brand awareness, customer base, overall reach, and service functionality. I have noticed an increase in the number of these partnerships, some of which have come about as a result of the more challenging and complex business environment triggered by the pandemic. Benefits of a successful partnership can be impactful to a company’s bottom line.

Which type of strategic partnership to choose?

Depending on how you define them, there are at least six types of strategic partnerships. They are marketing, supply, supply chain, integration, technology, and financial. Marketing partnerships are very common. One example is the “Color Your Room” campaign by home furnishing retailer Pottery Barn and paint company Sherwin-Williams. In 2013, the two brands created an exclusive product line of paints, and then added a new section to Pottery Barn’s website where customers could select paint colors to complement their furniture choices. Note that each partner played to its strengths and helped drive business to both companies

EBC Associates, has a strategic partnership with Ai Media Group, in New York City. Ai Media Group’s Partner Program is made up of independent consultants who are compensated for promoting their technology. The benefit to me as a partner is that it has created an opportunity to build my network with a cutting-edge digital advertising group that is also a Blackstone portfolio company. This has opened many networking doors, created a value-added offering for the EBC portfolio and a pathway to another stream of revenue for my firm. “Liz has been a valuable partner to Ai Media Group. Her connections in the marketing and advertising industry made her a great fit for the types of companies Ai is trying to reach,” stated Charles Farruggia, Vice President of Partnerships at Ai Media Group.

Start with a good foundation

The initial steps of setting up a partnership to minimize risk and maximize benefits include clearly defining what you need from the partnership. Do you need help with marketing, distribution of a product, or something else? Tap your own network of contacts as you research which companies could best help you meet a specific goal. A contract is a must, as is continuing to nurture the relationship during the course of your work together.

Recognize the risks and realize the benefits

The main risks for strategic partnerships, according to a recent McKinsey poll, included partners’ disagreements on the central objectives, poor communication among partners, and the inability to identify and quickly make adjustments when circumstances change. Successful strategic partnerships begin with a clear foundation for the business relationship – do you and your partner have clear, well-defined goals for the partnership? You will also want to agree on how you will measure the venture’s success. Keep everyone well-informed, so that when and if circumstances change, you and your partner are willing to be flexible enough to change plans as needed. A successful strategic partnership provides many opportunities to leverage your company’s strengths and create value. There is no reason to believe that you have to always go it alone.