Business Development Partnerships: Everything You Need to Know to Get Started
One of the primary roles of any business development team is to build partnerships that benefit their business in some way. Many do this through growth initiatives or brand-building opportunities that lead to more sales either immediately or further down the line.
One of the primary roles of any business development team is to build partnerships that benefit their business in some way. Many do this through growth initiatives or brand-building opportunities that lead to more sales either immediately or further down the line. In this article, we’re going to look at what partnerships are, how they could impact your business, and the types of partnerships that BD professionals typically work to deploy.
What Are Business Development Partnerships?
A business development partnership is an agreement between two or more businesses that benefit from each other in order to engage their customers, build an audience, or increase the success of their customer acquisition efforts. There are no real limitations or frameworks that are required when developing partnerships and BD professionals are typically free to come up with any agreement they can, as long as their partner agrees. Let’s take a look at some examples of how this works. Example #1 - Let’s say your organization is a later stage business with a core product that people love and you have a large sales team. Your problem is - how do you create new channels for distribution to customers you may not be able to reach through your own sales team or marketing channels? The best answer is likely through partnering with other businesses who have access to customers you don’t have.Example #2 - Let’s say you’re a small SaaS who is just starting to get some traction in your industry. You’ve attempted to get as much press coverage as possible, to little success. You are struggling to build your brand awareness to show validation to potential customers. Creating a partnership with a successful business that is not a competitor but is related to your business might be a nice fit if you can figure out how to create value for them in exchange for the brand recognition you need.
Benefits of Business Partnerships
Building relationships with other businesses helps your organization expand into new markets, increase revenue, create value for potential or existing customers, and scale aggressively. There are many benefits that stem off of these key results, and there is no limitation to the amount your business can benefit from creating high-value partnerships. The sky's the limit and your creativity will be key to finding ways to make it successful. Often, you’ll find that your business is benefiting from partnerships in ways that you didn’t even intend when you began. Be aware that partnership programs can fail to produce quantifiable results due to unclear goals or because the type of program that was selected was a bad fit. So, regardless of the many benefits it’s important that you’re choosing partnerships that fit your value proposition and company values. You don’t want to confuse your customers by making the wrong choice.
Types of Business Development Partnerships
Now that you understand why building partnerships are important to your business objectives, let’s discuss the different types of partnerships that exist and see which one is a good fit for what you’re trying to accomplish within your BD career:
1. Strategic Alliances
A strategic partnership is when two companies enter into a mutually beneficial agreement while remaining separate entities. For example, a Doritos Loco Taco comes from a partnership between Taco Bell and Doritos, who entered into a mutually benefiting partnership. By creating a taco together, they were able to boost each other’s brand name recognition and reach markets that they normally wouldn’t be able to.Obviously, fast food isn’t the only area where strategic alliances are often used. Supply chain partnerships are another way organizations will leverage each other’s resources to increase their bottom line. Texas Instruments doesn’t just manufacture calculators—they’re one of biggest suppliers of computer chips globally and they benefit greatly from a variety of partnerships that boost their appeal as a top supplier.Other examples of organizations teaming up together to positive results is Nike and Apple’s almost two decade relationship. Starting with Nike+ in the early 2000s, Nike and Apple have a longstanding partnership that has proven to be fruitful over the years, helping Apple boost its profile immensely in the athletic and wearables category and aligning Nike’s brand as a forward-thinking, trendsetting organization.
2. Channel Partner Programs
Channel partner program is an umbrella term for when a business markets or sells their product through a third-party partner. Affiliate marketing, referral programs, and value added resellers would all fall under the channel partner program banner.The benefits of a partnership program are having a built-in audience, the ability to experiment with different product offerings quickly, and be more efficient with a smaller sales team. Additionally, businesses that build robust channel partnerships are able to scale faster, build brand recognition, and expand into new markets to seek out fresh audiences or prospective customers. With the boom in social media and the rise in influencer culture, affiliate partnerships are more successful and popular than ever. If you’re an early-stage startup, taking advantage of partnership programs is a fast way to give your company social proof from a more well-established organization and take advantage of a more curated audience that’s more likely to purchase your product. Perhaps the most famous affiliate program example is the Amazon Associates Program which allows content creators, publishers, and blogs to monetize their web traffic by hosting Amazon products on their site. The ability to customize which products you want to promote while also having an established name give your business instant credibility is a huge boon. When considering setting up a partnership program, it’s important to understand your business objectives, what stage your business is in, and how you will measure the success of your program. Focusing on these keys can help you find success through your channel partnerships quickly.
3. Joint Product Partnerships
In contrast to a strategic alliance, joint product partnerships are when two companies come together to launch a new product or feature. These partnerships typically bring two products together partially or wholly to create a new benefit for customers. Joint product partnerships can also come in the form of white labeling—a type of relationship where one party produces a service or product and the secondary party rebrands it to sell as their own. In a product partnership, two products are able to come together to provide new value and improve their own product’s brand recognition. A good example of this is when a company like Stripe works within a product to collect payments for purchases that occur while using the product. Stripe gets the processing fees but no one is coming directly to their website for Stripe to benefit. Instead, the consumers are using a third-party product and Stripe gets paid.Joint product partnerships are a great way to scale your business quickly without investing time and money into hiring and training a large sales team. Some benefits use partner partnerships as their main source of revenue growth.
4. Content Partnerships
Content partnerships occur when one company agrees to create content either for or with another business with a specific goal in mind. Most content partnerships see one party benefiting from additional content on their site while the other partner benefits from brand recognition and additional traffic to their products. Take Vice and Vans for example—both companies have an overlapping audience that targets younger, progressive-minded individuals. Vans is associated with the punk and skater lifestyle and Vice has given voice to the counterculture since the ‘90s. Forming a content partnership was a no-brainer with Vans producing original videos and content published on Vice’s site that their readership would find relevant and interesting. As a business development professional, if you’re looking for a way to improve your content while reaching a bigger, more relevant audience for your product, then forming a content partnership with a well-regarded brand could be the way to go.
How to Get Started With a BD Partnership Program
Now that you know the different types of partnerships that are out there, it’s time to decide which one you should pursue that will provide the most long-term value for your business. Once you’ve found a good potential partnership you’ll need a structure to ensure long-term success with the project. Here are the steps you should take to ensure you’re succeeding with the partnerships you’re using:
- Clearly define your company goals. Are you a BD executive at an early-stage startup? Moving fast and being agile are usually the most important qualities in this time window. Forming channel partnerships are a good way to experiment quickly with different product offerings while piggy-backing off the built-in trust more well-established brands possess.
- Create a strategy that is executable. After defining what the goal is for your partnership program, it’s important to come up with a strategy that is realistic to implement.
- Partner with a company that makes sense. It can be easy to get starstruck by a high-profile brand with a huge audience. But if their demographic is mainly tweens and you’re a life insurance company, even if the number of impressions are astronomical, it won't make a difference if the conversions are miniscule. Creating a target customer profile is a good place to start when considering which business you want to partner with.
- Clearly define success parameters. Before you launch your partner program, it’s important to understand what success means so you’re able to adjust accordingly. If you decide to pursue a content partnership, organic traffic and converted leads are probably the most important metrics to consider.
- Evaluate performance and optimize. Once your program is up and running, you should be evaluating performance by looking at the pertinent metrics. After setting up your referral program, you should be seeing an uptick in generated leads and new customers. If not, it’s time to either adjust the program to make it more enticing or partner with a different business altogether.
Business development partnerships have never been more important to the success and growth of businesses than they are today. Each type of partnership can be a strategic advantage that helps your customers and gives you a leg-up on your competition. Choosing the right partnership opportunities could be key to your ability to grow into the future economy.
Join our community of Partnerships experts.
Get curated insights, invites to events, and useful resources - all for free
How to Build Partnerships at Early-Stage Startups with Cian Wright
Early-stage partnerships can be tough to build when you’re a startup looking for traction and industry credibility. Cian Wright explains where to start.