Co-Branding During the Economic Downturn: Building Partnerships That Work
As the economic climate remains grim, have you noticed that more people are jumping onto the ‘relationship' bandwagon? This recently came to my attention while meeting with a new company to discuss how our businesses could help each other. All they talked about was their business, and after about an hour they finally asked; "Well what do you do?" That was the wakeup call for me.
It's great to know that many people are reaching out to work with you, and connecting and networking with other businesses are essential for building a successful business. However, I wonder that if the economy was in a better state, would people still be willing to work together? Once we are out of the recession, will those same businesses still see the value in forming relationships and networking with other companies?
It seems that everyone is using the word relationship, (the "R" word) these days, but I don't think many businesses really get it. Building a relationship with other businesses isn't simply about saying it, but that there is real, genuine effort behind it. Relationships that are built on mutual agreements, understanding and an honest connection that benefits both parties involved are the ones that survive through both bad and good economic times. Nurturing a relationship takes time, and it doesn't happen with just one phone call or one meeting.
Another situation where I witnessed the "R" word phenomena was during an event to showcase businesses in the event industry. One of the vendors there was clearly upset and after about 15 minutes of ranting and complaining, she says, "We need to work together and build a strong relationship." It left me wondering if she really meant it, or was just saying it for the sake of ‘relationship building.'
The reason my business has been so successful so far is because of the sold business relationships and connections I've made with other vendors and business owners. While I do agree that we should be working together, pooling our resources and collaborating on projects and ideas, I also think it's important to team up with companies that aren't just looking for a quick fix. Companies that are looking for a partnership through the long haul will be the ones that truly are the best fit for your business. If you are the type of business owner who keeps hearing the word ‘relationship', you need to step back and take a real look into the other company's approach and genuineness behind it. You must also share some of the responsibility of this relationship. Ask yourself if you feel a solid connection and are truly engaged with the other business owner, and interested in what they do. If you are not, this won't be a relationship that will be worth pursuing for the long-term.
Business relationships must be seen as long-term investments. Both parties must be willing to invest the time and effort into promoting and helping the other business as needed, and sometimes, the other company may simply not be the right fit. If the company's objectives and goals are similar to your own, there's a good chance that the relationship will benefit both parties.
A few important questions to ask, include:
· Do you have similar target markets?
· Will the relationship be short or long-term?
· How can both businesses benefit from working together?
· What are your short and long-term goals?
· Are expectations for the relationship clear?
Importance of Co-Branding and Partnerships
Co-branding in this economy increases your chance of business success because it prompts both parties to work collaboratively in order to reach their goals. A 2005 survey of 154 senior marketing executives underscored the findings of the McKinsey study "Turning Adversity into Advantage: Does Proactive Marketing during a Recession Pay Off?"that was published in the International Journal for Research in Marketing. The report pointed out that companies who took the initiative to develop solid marketing strategies had a significant competitive advantage. Co-branding is just one proactive marketing strategy that could help your business succeed for the long-term.
If you are a small business, partnering with a bigger company is essential for long-term success. The advantage you provide for the bigger company comes down to the fact that you don't have the big budget, and have a very out-of-the-box, even grassroots approach. They can help you get the increased visibility you need for your target market, while leveraging your team for resources they may not have in house. If you partner with a mid-large size company, their reputation and status will help you push your business forward. In both cases, your goal should be to provide the larger company with creative ideas on ways to cut costs and be more efficient with their time and resources. Give them a chance to see your passion for the industry and your ability to look past the economic climate as you reach out to your core customers in a way that is most desirable to them. You need to work on convincing them that working with you will help cut costs and provide value for their organization.
If you are the mid- to large-sized company, you have the upper hand because of your resources, reputation and brand name. Working with a small business can help you gain a fresh perspective and insight on finding quality leads instead of quantity, and fine-tuning your business operations so that you are using a more personalized approach. In most cases, a small business has fewer clients than a mid to large-sized business, has smaller funds, and may be much more focused on nurturing intimate relationships with your target market. This is an excellent opportunity to learn about your target customers from the perspective of a business who truly understands their clients on a personal level.
To Partner or Not to Partner?
Here are some more tips when considering if you should or shouldn't build a relationship with another company:
1. Do some research. Learn as much as possible about the company you are interested in working with, or any companies that are pursuing you for a partnership. Find out what their goals are, how they have cultivated leads so far, and what type of track record they have with customers and clients. Remember that any business that has a poor track record will reflect negatively on your own business if you chose to partner with them.
2. Prioritize your goals. Define exactly what you hope to accomplish by working with this other business, and what they may want from you. Make sure they truly are the right fit for your company, because you will need to work on aligning your goals and objectives with theirs in order for the partnership to be a successful one.
3. Develop co branded events. Joining forces with another business to organize events and initiate event marketing strategies is an excellent way to promote both companies and expand. There's definitely strength in numbers, so consider ways in which you can develop a strategy for event promotions.
4. Make sure the other business is ready to actively promote your business. Both businesses must have a clear understanding about expectations of the relationship or you won't be able to reap the benefits of the partnership. Map out the details in writing if you need to as an informal agreement so you are both clear on what you both need and want.
5. Make sure you have the resources to manage the process internally. You may need to restructure some parts of your management program or marketing strategy to accommodate for the partnership. Make sure your company is prepared for the change, and restructure parts of the organization as needed.
Partnerships can be very beneficial during an economic downturn, and you'll need a strategy to initiate and maintain the relationship for the long-term. Take the initiative to seek out business relationship that are built with solid goals and are truly genuine. Doing so will increase your chances of business success and provide you with much more leverage and resources in this competitive marketplace.