Technology has made it is easier than ever to connect with family, friends, co-workers and business associates. Many business executives have taken advantage of this connectivity to build strategic partnerships with other companies to help grow their businesses. By considering partnering with another organization, you may take advantage of opportunities that will strengthen your business by sharing product development risks, technology and a range of resources.
Partnerships can range from a strategic relationship to a vendor-buyer arrangement. In a strategic partnership, two companies combine resources to gain market share or create a competitive advantage. In a minor partnership, businesses work together to complete a shared goal such as filling a gap in the product line or gaining efficiencies in scale. There is no guarantee that partnerships will succeed, but having a common purpose—such as providing the clients of each company with a better product—helps set the foundation for a mutually beneficial relationship. A strong partnership should benefit both companies, their employees and their customers.
The Chief Marketing Officer Council and the Business Performance Innovation Network surveyed businesses to find out why executives felt a partnership could help their business. Let’s explore the top four reasons from the survey.
1. New Ideas, Insights & Innovations
One of the greatest needs—and opportunities for success—is when partners can identify a specific challenge they can solve. Collaborating with a business from another channel or sector can reshape the direction of both companies. When looking for a partner, consider:
- Do you work with the same customers?
- What issues do your customers share?
- How can you work together to make your customers’ lives easier?
Each company may have great products individually, but together they could create an even more desirable solution. Take fitness trackers as an example. Fitbit is partnering with health and wellness plans or health systems to design products that focus on health and wellness coaching. In another example, Cerner Corp. recently announced (as reported in the Kansas City Business Journal) that Amazon Web Services is its preferred cloud provider—allowing them to leverage Amazon.com Inc.’s infrastructure to drive health information technology innovation and interoperability. In the article, Cerner COO Mike Nill said, “You will see new solutions and capabilities as early as this fall being announced out of this relationship that are going to be pretty disruptive to the industry.”
2. The Complexity & Pace of Business
The home medical equipment (HME) industry has many moving parts that make it challenging to keep current: authorization requirements, code changes, denials, Medicare revalidation, resupplies and staff certification are just a few. Providers have started outsourcing due to high overhead or because the process is too time consuming to keep these functions in-house.
In fact, industry surveys show that more than half of HME providers contract with companies that specialize in patient collections, deliveries, medical billing and regulatory or compliance processes. Outsourcing can help improve your bottom line by taking time-consuming tasks off your plate. This allows you to focus on your customers and the areas of your business you want to manage internally.
3. A Broader Customer Base
If you have selected the right partner, you will be able to cross-market to their clients. This is an incredibly effective marketing strategy, especially when you can demonstrate that your products and services work together seamlessly.
In the fitness tracker example, the new monitors are not always sold to the public but instead are offered exclusively to the employees of the partner organizations. This opens a new “warm” target market for Fitbit, especially if the partner offers their employees an incentive to use the device.
Referral sources can also be a great example of a win-win scenario. In addition to sending you customers, referral sources can provide marketing opportunities on the screens in their offices or through their website. In return, you can send them customers who come into your store seeking a piece of medical equipment. Perhaps they need a prescription to have the equipment covered by insurance or are looking for a doctor who can relieve pain. You can also distribute your referral source’s contact information in your newsletter. Because the customer already has a relationship with you, they will be more likely to see your partner as a trustworthy vendor.
Providers are also increasing their market share by expanding the number of products they carry. In order to survive in today’s market, around 40% of HME providers are now offering more accessories or new product lines. There is a cost to carrying more inventory, so instead of warehousing several new items, you might look at forming a partnership.
For example, if your company designs ramps for wheelchairs, partnering with a wheelchair supplier could get you a few samples for your showroom as well as information on prospective customers.
4. Boosted Bench Strength
Strategic partnerships enable teams to engage the best talent to move forward. As a business leader, you have many roles to oversee: human resources, compliance, operations, marketing, customer service, delivery logistics. You and your staff probably have more expertise in some areas than others. How can you fill in the gaps without hiring more people?
Consider creating an advisory board of three to five experts who can serve as a sounding board for your company. Once you have determined the challenges or opportunities you want to address, choose members who can help you in the areas of marketing, deliveries, mailing, etc. For your advisory board to be helpful, they will need relevant information such as business plans, financial statements and other reports well in advance of board meetings. This way, your board can help you discuss the opportunities, challenges and next steps to help your business grow. As the needs of your company change, rotate your advisors so you always have the skills you need.
Overall, the right partner will spur growth and gain attention for your business.
When you are associated with a company that has already proven itself in the local community, partnerships will connect you to new people who can help you grow when you need it most.
