The Most Common Types of Business Development Partnerships
Partnerships are the core of what many would consider strong business development today, especially in the tech space. There are many types of partnerships that BD professionals can use to grow their long-term business potential.
Partnerships are the core of what many would consider strong business development today, especially in the tech space. There are many types of partnerships that BD professionals can use to grow their long-term business potential. The four most common types of partnerships that we’re going to focus on in this article are product, content, channel, and other strategic partnerships. Finding new strategies and potential partnerships can be daunting to many business development professionals. Luckily, Firneo offers both on our platform. Let us help guide you to level up your skills, get new partnership ideas, and connect you with the right people who can help. It’s all a part of what you get when you sign up as a member. Join today and see how it can help you grow your business.
Types of Business Development Partnerships
Business development partnerships can occur in a variety of ways, all with great potential. The way that you choose to structure your partnership will depend on the type of business you have and what you’re trying to accomplish. Let’s break down the main four types of partnerships that are often used today.
1. Joint Product Partnerships
Joint product partnerships occur when two or more companies join forces to release a new product or feature, or aim to improve an existing one. This could mean collaborating on a new tool that businesses would own together that helps their overlapping audience. More times than not, however, it means introducing a way for two products to work together to benefit both customer bases.Product partnerships can look quite different from one another. Here are some examples to illustrate the variety.
Foursquare and TouchTunes
Patrick Hu, Managing Director of Business Development & Product Partnerships at Foursquare, led the charge on a business development partnership with TouchTunes, the leader in the digital jukebox space. The businesses partnered to use Foursquare’s notification system to send personalized messages to TouchTunes users when in close proximity to a TouchTunes jukebox. By collaborating with Foursquare instead of developing its own unique system, TouchTunes was able to save money while still generating the results they were after. In turn, Foursquare received TouchTunes user data that contributed to the broader FourSquare panel.Hu shared that through the partnership, “TouchTunes saw that by being able to ping users to let them know, and remind them ‘hey you're at a venue with one of our machines, play a song,’ it increased the likelihood of song play by 60%.” The partnership allowed TouchTunes to release a new feature and gave Foursquare more brand recognition.
Nike and Apple
Nike and Apple teamed up to create Nike+. The partnership initially sought to combine activity tracking with music and quickly evolved to what we now know as Nike+. The new product placed activity tracking technology into athletic clothing that syncs with Apple iPhone apps to record movement data. Now, we see this partnership in their more recent development, the Apple Watch Nike+.While different in nature, both partnerships are classified as Joint Product Partnerships because a new feature or product was released as a result of the companies’ collaboration. These are only two of many examples of successful product partnerships.
2. Content Partnerships
A content partnership is just how it sounds: one in which two or more companies collaborate to create a joint piece of content. Typically, one company is seeking brand awareness while the other is benefitting from the actual content created, though both might benefit from co-creating content like a live event or webinar. Let’s review some examples.
Ben & Jerry’s Canada and Wattpad - “Pen Your Pride”
Ben & Jerry’s Canada, a branch of one of the biggest ice cream companies, teamed up with Wattpad, a global community of writers, to host a write-a-thon called “Pen Your Pride.” The event was intended to shine light on Ben & Jerry’s involvement in the LGBTQIA+ community. Writers from all over the world submitted pieces, both real and fiction, about what it’s like to be LGBTQIA+. The result: The campaign generated mass amounts of content for Wattpad and gave Ben & Jerry’s more brand recognition.
Zillow and Tastemade
Zillow, a real estate company, teamed up with Tastemade, a company promoting foodie communities, in an initiative they called “Home | Made.” The collaboration was intended to inspire people to settle in the Hudson Valley by creating moving content that highlighted its beautiful architecture, arts scene, food community, and more. The result: Similarly to Ben & Jerrys and Wattpad, Zillow got incredible content to encourage home buying in Hudson while Tastemade gained brand recognition.
3. Strategic Partnerships or Alliances
Strategic alliances occur when two companies engage in a mutually beneficial partnership while remaining separate. This is a bit of a catch-all for the creativity of completing a partnership that benefits both parties. These partnerships allow companies to reach new audiences or markets by capitalizing on one another’s already established platforms. Let’s look at a few examples of how these strategic alliances work.
Spotify and Uber
Spotify and Uber have announced a collaboration to provide music control to Uber customers. This is considered a strategic alliance because Uber riders get the chance to be exposed to Spotify, and Spotify users are encouraged to ride with Uber. It is what we would call a “win-win”. The result: The partnership isn’t about brand awareness as much as it is about direct exposure for each business to each others’ customers.
Starbucks and Barnes & Noble
If you’ve ever been inside a Barnes & Noble, you may know exactly what we’re talking about here. Who wouldn’t want the option to sip on a nice warm coffee while strolling the aisles or diving into a new book purchase? The result: Starbucks found the perfect home inside most Barnes & Noble stores while B&N made their customers happier and got them to stay in the store longer, leading to more potential sales.
4. Channel Partner Programs
Channel partner programs include any partnership where a business enters into an agreement with a third-party to market or sell their product or service to a wider audience. As a “thank you” to the third party, companies can offer a commission on sales or another incentive, providing more sales to the company and more value to the third-party. Traditional channel partners are a part of the same supply chain for the products being sold. A type of channel partnership is an affiliate partnership where one party will receive compensation for converting their customers into customers of their partner. Similarly to our previous categories, this concept is best illustrated through an example.
Amazon and Gear Patrol
Gear Patrol is a daily men’s magazine that shares content ranging from travel to food to technology. Amazon partnered with Gear Patrol, including it as one of its affiliate websites or channel partners. As Gear Patrol shared recommendations for products, their millions of daily readers were redirected to Amazon via affiliate links. The result: Gear Patrol was able to profit off of the purchases made by their readers while Amazon gained both sales and access to a set of new customers.
What Are Business Development Partnerships?
A business development partnership is any relationship between two or more entities intended to enter the businesses into a new market or expand a customer base. Business development partnerships occur on a spectrum, ranging from sales to product partnerships, all the way to corporate development. Similarly, these partnerships vary greatly in the product or service exchanged, the key performance indicators (KPIs) used to measure the partnership and the nature of how the partnership occurs.By creating strategic alliances and collaborating with other businesses, companies can develop new skills, reach new audiences, and share expertise. Business development, and specifically the creation of these types of partnerships, have helped to usher in an era of growth opportunities for growing companies that continues to evolve and open new doors.
Why Partnerships Are Important to BD Teams
Business development partnerships are key for a variety of reasons to any business looking to scale, but the most common reasons BD teams utilize partnerships are:1. Access to new markets2. Access to new technology or products3. Increased opportunity
1. Accessing New Markets
As an individual business, there might not be enough resources to reach a new market on your own. By collaborating with companies larger than yourself, however, you can utilize the other’s platform to generate a greater potential reach. This empowers a company to dip into new markets they may not have been able to reach prior.Additionally, it can just be difficult to launch your business into a new market. Launching into that market with a partner who is already established to those potential customers speeds up the process and validates you immediately to this group. It’s a surefire way to scale quickly with a new product line or in a new geographic location.
2. Access to New Technology or Products
Many established companies have their own unique technologies to power different aspects of what they do. By engaging in a business development partnership, companies can share technologies to power new functions in their own operations. This could give your customers access to products that they did not previously have access to. Doing so increases the value that your customers perceive for your business since they are accessing this new technology through being a customer of yours.
3. Increased Opportunity
When you partner with another business you are typically getting access to each other’s customers in some way. This means that you have a huge opportunity to reach a large chunk of new customers all at the same time instead of going through the normal sales processes you’ve put into place. This also means that you are more likely to have a greater number of future customers coming in through this partnership than you would have had otherwise. The opportunity potential should be huge if you’re going to go through the complexities of a new partnership.
Which Business Development Partnership Is Right for My Business?
Deciding which type of partnership to pursue may seem daunting, but it ultimately comes down to the goals of the company and the resources available. It also will depend on potential partners and what you have to offer each of them, leading to the likelihood of getting a partnership deal consummated. It may be helpful to ask yourself the following questions:-- What are the company’s short-term goals?-- What are the company’s long-term goals?-- What is the product roadmap? -- What product or service is the company currently providing, and how do they plan to shift or develop this in the near future?-- What gaps exist that need to be filled? -- What processes are inefficient?After considering whether a partnership could support the goals, gaps, or processes the company currently has, it’s important to consider any timelines the company is operating under.Use your business development role to your advantage. As Patrick Hu says, “In a BD role...you tend to have visibility across all [products], and that's a superpower, where you can help connect the dots and see the forest from the trees.” Try to view the product and process as a whole to inform partnership decisions for your entire organization.
Business development partnerships occur in a variety of ways and are useful to businesses for various reasons. Understanding what they are and how you can utilize them as a business development professional is essential in developing your BD skills and the future growth potential of your business. The better you understand your customers, the easier it will be to determine what types of partnerships might benefit your future growth.
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