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It Takes Two: Winning in the New Economy with Strategic Partnerships

Published on April 28, 2022

Reposted from Forbes. Authored by Colson Hillier | Alorica CMO and Forbes Councils Member

Today’s consumer expectations are at an all-time high and marketplace demands are equally intense. As pressures rise to deliver premium service with greater efficiency and accountability, it’s important to rethink approaches to achieving tangible business outcomes.

As a CMO, I am passionate about the value of strategic partnerships. Advancements in enterprise technology and collaborative operating models have made strategic business partnerships increasingly important to stay ahead of competition. Done well, strategic partners can lead to improved products, services and distribution, and result in higher profitability, focus and customer experiences. Done poorly, these engagements lack clarity, efficiency and results, and can lead to disjointed customer experiences. The key is focusing on the right business opportunity, selecting the right partner to complement your strategies and establishing the right execution model.

Stand for something, but partner outside your core.

Understanding your company’s core expertise allows you to focus on making that value proposition the best in its class. No business can specialize in everything, leaving the door open to partnerships that support and enable capabilities that supplement a company’s core offerings. Whether your business is embarking on vertical or horizontal integration, the considerations are the same. The enterprises that come out on top will be those that explore strategic, mutually beneficial collaborations that differentiate service offerings, make operations more efficient and improve the value proposition to their customers.

Combining forces with partners can optimize operating models and differentiate service offerings to propel a business forward. Oftentimes, this process requires expanding distribution channels, appealing to new target markets or reducing expenses, and can take form in several ways.

Shopify, which supplies the digital tools that have enabled countless companies to launch their business online, provides the infrastructure to efficiently scale online. An affiliate marketing engagement can add value for customers and promote loyalty, such as Lyft and Delta, whose partnership gives ride-hailing passengers the ability to earn one airline mile for every $1 spent on a car ride if they link their SkyMiles and Lyft accounts. Beyond enhancing services, partnerships can prove valuable in meeting marketplace challenges. The restaurant industry recognized this when it partnered with DoorDash, Uber Eats, Grubhub and others for widescale food delivery. This not only brought new value to customers but aided many restaurants financially when they were otherwise forced to close during pandemic lockdowns.

Seek partnerships with a clear alignment of incentives.

Many companies have been built with the intention of being strategic partners to other businesses, whether that is a cloud-based service provider, ticketing system, CRM database or retail marketplace. There is already an entire economy built with the mindsight of enabling partners to innovate or operate more efficiently.

A large number of businesses serve the same audiences, but with different strengths. Together, they can create natural partnerships for mutual benefit, such as with event venues and food service companies, technology providers and system integrators, or content owners and distributors. The key is to seek out those that deliver on business objectives and drive improved customer experiences.

The best partnerships are built around a common mission that is well understood and roles that are well defined. The shared pastimes of reading and drinking coffee converged in 1993 when Barnes & Noble began exclusively offering Starbucks coffee in its stores. More recently, buy now, pay later platform Affirm entered into a strategic payments partnership with Amazon, giving Affirm an influx of new customers and Amazon another value-add for online shoppers. Yet, even seemingly unrelated partners can mutually benefit. After declaring bankruptcy in 2017, Toys R Us found new life in a partnership announced with Macy’s last year. The store-within-a-store model outfits more than 400 Macy’s locations with a Toys R Us-branded shop as the retailer looks to grow market ownership in the toy business.

Recalibrate regularly.

As the pace of change continues to accelerate, partnerships will mature, and with that comes the need for regular checkups on each party’s objectives, performance and satisfaction. Partnerships fail when there is mistrust or the joining of two companies requires a change to the focus or intent of one of the parties. Neither should have to perform unnatural acts in order to be successful. One of the greatest values of a partnership is that it is flexible—when it doesn’t work, it doesn’t mean all is lost. A business can always reassess alternative partners or its build vs. buy strategy.

For example, eBay and PayPal at one point greatly benefitted each other as an e-commerce site and payment platform, but the two companies eventually outgrew formerly shared objectives. AOL and Time Warner—once the biggest merger in history—disintegrated in less than a decade as differences in corporate culture, aspirations and missions made the combined operations of the two companies simply untenable.

As with any long-term relationship, it is important in a partnership to define the mission and each party’s role and responsibilities, and to regularly assess the partnership’s value using measurable goals with well-defined criteria.

Whether your company’s goal is to grow revenue, expand its customer base, increase brand loyalty, enhance CX, spread out geographically or something else entirely, the demands of today’s landscape require new approaches to navigate increasingly fragmented and evolving channels. Strategic partnerships, when operating in service to shared objectives and goals, can achieve these business outcomes. The time is now to transform together to ensure your business is competitive, sustainable and scalable.

Read the full article at: https://bit.ly/3OLnGGa

 

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Alorica Inc. (“Alorica”) is the holding company of various direct and indirect subsidiaries, including Systems & Services Technologies, Inc. (SST). Many of Alorica Inc.’s subsidiaries operate under the brand, Alorica, but all remain separate legal entities.