Strategic collaborations deliver a wide range of powerful outcomes. They can help drive sustainability. They can help you improve working conditions for your employees. And, most of all, they can help you grow your business in a variety of ways.
With the right collaborative partner, you can achieve much more powerful growth than you ever could on your own. By understanding how to use strategic collaborations effectively, you can dramatically improve business growth outcomes.
1. Grow Your Customer Base
Unsurprisingly, one of the main ways a strategic collaboration can grow your business is by directly growing your customer base. The businesses get a new opportunity to reach out to the audience of their collaborator, while using the strong reputation of that collaborator to “get a foot in the door,” so to speak.
Examples of this are easily seen in footwear, such as Puma partnering with The Pokemon Company to make Pokemon-themed shoes or Crocs collaborating with Mattel to make Barbie-themed shoes (to coincide with the hit movie, of course). Then there are the countless collaborations that footwear brands do with star athletes. In each case, the footwear brand has an opportunity to grow its own customer base by appealing to fans of its collaborative partner.
2. Reduce Costs
Other strategic collaborations focus on reducing costs. When selecting a logistics partner, many companies will naturally be inclined to select a partner who can proactively help them reduce costs and improve their operating budget. Reducing expenses in a core area can dramatically improve the company’s financial stability and their ability to engage in other activities (such as expanding to a new market).
Of course, many collaborative partnerships can reduce costs and create value for both parties involved in the partnership. For example, consider the Dell-FedEx Supply Chain Services strategic partnership for reverse logistics operations that was profiled in Harvard Business Review. The results were nothing short of spectacular. In the first two years of the partnership, Dell and FedEx reduced costs by 42%, reduced scrap by 67% and brought rates of defective parts per million to record lows. The win-win Vested outsourcing agreement was also good for the FedEx Supply Chain Services team, who received incentive checks every time they reduced costs or improved service for Dell. A true win-win.
3. Enhance Business Development and Growth
Strategic collaborations and partnerships are often focused on immediate needs. But they can become even more critical for growth when your organization takes a long-term view that includes using these collaborations to drive lasting business development.
As Michelle Haines, CEO of NetVest, explains, “Strategic collaborations always represent a significant opportunity for business development and growth. That’s why at NetVest, our platform focuses on helping entrepreneurs build strategic collaborations that can increase opportunities for scalability and sustainability. With the resources and insights that are only made possible through such collaborations, businesses can put themselves on the fast-track to improving these and other areas that drive growth. The right partnerships can become an ongoing contributor to a wide range of development initiatives.”
By putting in the work to build successful strategic collaborations now, businesses can ensure a lasting boost to their growth and development.
4. Solve Problems
Every forward-thinking business is willing to identify when it needs the assistance of a partner to solve problems — either its own internal challenges, or issues where it wants to impact the world at large. When you enlist the help of a qualified strategic partner, you become far better equipped to solve these problems in a way that will achieve successful outcomes that grow your business, even if company growth isn’t a direct goal.
For example, in 2011, Coca-Cola and Heinz entered a strategic partnership that enabled Heinz to use Coca-Cola’s environmentally friendly PlantBottle packaging. Similarly, Coca-Cola later entered a strategic partnership in the U.K. with plastic recycler Eco Plastics to establish a new recycling facility that would enable more plastic bottle processing in Great Britain.
Such partnerships helped drive the brands’ overall sustainability initiatives, while building goodwill among likeminded customers. Notably, the Eco Plastics collaboration also helped ensure that Coca-Cola could use high-quality rPET plastic bottles in the U.K. at a lower cost.
5. Build Trust
Finally, strategic collaborations can help grow your business by building trust with consumers — and your industry as a whole. When your brand becomes associated with a partner that others already know and trust, your brand benefits from the positive reputation your partner carries. This in turn makes potential customers who learn of your partnership far more willing to consider doing business with you.
The importance of trust can be seen in the rise of influencer advertising and its impact on how brands try to reach consumers. Companies partner with athletes, bloggers, niche influencers and others because of the trust and credibility they’ve already built with their own audiences. Marketing collaborations and other partnerships offer a sign that your brand can be trusted and that you offer quality products or services.
Many Ways to Grow
Whether your collaborative efforts are designed to improve your supply chain operations or reach a new customer base, they are sure to help you (and your partner) achieve financial growth. By giving these strategic collaborations the level of attention and care that they deserve, you will generate true win-wins that drive lasting success for your business.
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