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The importance of partnerships in a downturn 🔄
Companies just getting started with channel partnerships should focus on getting a strong referral program in place. There are generally two common channel partnerships, which include both referrals and integrations, where integrations are no doubt more difficult to achieve.
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Welcome to "note to self" #17 focused on marketing & growth. đź’»
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Today we're discussing partnerships in an economic downturn. Let's dig in 🍽
The importance of partnerships in a downturn - an overview
Partnerships can be a powerful tool for businesses looking to grow and succeed, especially during an economic downturn. One of the biggest benefits of partnerships is the ability to share resources and expertise with other companies. By partnering with other businesses, you can access new markets, customer segments, and expertise that may have been out of reach otherwise. This can be particularly important in a downturn.
There are generally two common channel partnerships, which include both referrals and integrations, which I'll discuss below.
"You want to look at all the complementary goods that people are buying when they might be buying your product. That’s the best place to think about channel partners or prospective channel partners"
Channel Partnerships
1. Referrals
Referral partnerships involve one company recommending the products or services of another company to its customers. This can prove to be a low-cost and low-risk way for a startup to tap into new markets and generate leads. For example, an e-commerce store that sells natural beauty products partners with a wellness blogger who has a large following. The blogger can refer her readers to the e-commerce store's products, and the store can offer a discount to the blogger's followers as a thank-you for the referral. The best channel partnerships are those that get users turning up at your front door to use your product.
The important thing to remember is that you must extract and build more value for your customers and by partnering with a company that aligns with the growth rate you can achieve that. You don’t want to be sending customers to a smaller company if you're growing quickly, as there won't be much value there for customers. It's difficult to build a successful channel if it turns out your partner is offering different terms to the end user.
2. Integrations
Integration partnerships involve integrating one company's product or service with another company's offering and are almost always more difficult to achieve than referrals. This type of partnership can create value for both parties by providing a more comprehensive solution for customers. For example, a startup that provides a payment gateway could partner with an e-commerce platform to integrate its services, allowing merchants on the platform to accept payments through the gateway.
This should be a win-win for both partners, and not result in one partner extracting the majority of the value, and ideally, you want to move the needle for your partner. If accelerating your partner's success, also enables you to win at the same time, then you’re in a good spot.
Case Study: Dropbox x Samsung
Dropbox for example, by syncing with Samsung, was able to utilise this partnership against competitors like Box and any other cloud storage competitors on the most popular mobile devices in the world. Even being a “default” app can have value, since it’s what most consumers will try first.
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