3 Types of Strategic Partnerships | Tory Burch Foundation

Businesses can do a lot on their own, and careful strategic partnerships can help two companies go further together. Strategic partnerships are agreements between non-competing businesses in which both parties share risks, rewards and decision-making power. Partnerships are often an underestimated way that founders and CEOs can grow their businesses. They can help to expand a customer base, increase brand awareness, and can help overall reach and service functionality. I will share the three kinds of partnerships that have been impactful for my talent development company Reimagine Talent. 

WHEN IS A COMPANY READY FOR STRATEGIC PARTNERSHIPS?

Founders may ask themselves, at what point do I consider a strategic partnership? My thought is, whenever you deem that a partnership could support your organizational efficiency. When I think about organizational efficiency, it’s whatever partnerships can help to save costs, drive revenue, or support your team. I think a lot of times we focus on sales or cost efficiency, which are very important when you’re leading a business. But as you start to build a team, I think the concept of strong culture and keeping your people engaged and connected could also be a great reason for forging a partnership. 

The first step in nurturing a partnership is knowing what service or product could complement your business or offer an opportunity for increased revenue. Then, assess your potential partner’s organizational values to see if they align with yours. You want to make sure you deeply believe in what you are vouching for, directly or indirectly. The next step is a conversation where both parties lay out what they are hoping to get out of the relationship. You want to make sure there is mutual benefit. To get started, ask questions about existing partnerships and request any case studies on the impact of those partnerships. You should also ask about their business goals for the year and how this partnership will support those goals; the appropriate communication cadence (will you meet on the partnership monthly or quarterly?); and what type of PR, if any, will help both organizations amplify the opportunity i.e. press release, social media posts, emails, etc. If you want more detail, consider this loose script for your first brand partner meeting. 

AFFILIATE PARTNERSHIP 

Affiliate partnerships are ones in which a company receives a fee for referrals from their partner. This payment can be a flat fee or a percentage of the partner’s contract. The details would be outlined in a contract or memorandum of understanding. For example, we typically will provide training and development or consulting services that help organizations with their people, so that they can drive business growth. We teamed up with a tech partner to help amplify the learning and development that we offer to companies. In turn, they refer us to their other clients. For any business that comes through the partnership, we give them a percentage of the sales. They’re also getting branding by being affiliated with us. 

PRODUCT PARTNERSHIP

Reimagine Talent doesn’t yet have a product which allows us to collect assessments from the thousands of employees we may serve at a particular company, so we partnered with a tech company. We embedded this assessment into our programs in order to enhance our program experience and collect data that supports our program outcomes. 

Another product partnership you might be familiar with is between American Express and Amazon. They teamed up to offer a co-branded credit card for small businesses to use in the marketplace, with point and cash-back benefits for entrepreneurs using Amazon services. 

REFERRAL PARTNERSHIP

The final type of partnership that we’ve found really beneficial is referral partnerships, like the one we have with a professional association. We are one of their go-to partners for talent development and diversity, equity and inclusion solutions for their members. 

Now, this happened organically. The association had seen our work and their members value our offerings. If there is authenticity and alignment, a partnership like this can be incredibly powerful long term in your business. 

AGREE ON YOUR SUCCESS.

Communication is so important to strategic partnerships. We connect with our partners once a month at a minimum, because we want to make sure that we are cross-selling, or marketing additional products to existing customers. We want to make sure we’re sharing what we’re working on and we want to make sure that we’re informed of things happening in their organization. 

Our communication includes data. We clearly state what our intended goal is with this partnership. That may be, I’m hoping $100,000 in revenue comes out of this by the end of the year, or I’m hoping to land three clients out of this. The metric you choose really depends on the nature of the partnership and the nature of the business. Remember, that goal is something that has to be mutually agreed upon. It should also feel doable. 

PARTNERSHIPS ARE ALL AROUND YOU.

Many founders probably already have partnerships, or they have people they work with; they just haven’t formalized it. Business owners you meet through accelerators, your local chambers of commerce or programs like the Tory Burch Foundation Fellowship are also great sources to tap for partnerships.

I recently attended a program on building a strong diverse business. One supplier diversity leader challenged us to think about how strategic partnerships could be connected to supplier diversity and advancing underrepresented businesses. She asked us to list all of the vendors and suppliers that we use in any given year. Then, she asked us to go through that list and to asterisk all of the private companies founded and led by people of color, women, LGBTQIA people and veterans. It was almost like pointing the light to how we as small businesses can differentiate our current suppliers, diversity stats and metrics. Try to always be on the lookout for opportunities to forge partnerships that help you go further, faster.

In the end, partnerships are most effective when both parties have aligned values. It’s so important to have partnerships only with people whose businesses you fully respect. If a partner puts your logo on their website, and is talking about you at a conference where you’d be proud to be referenced, I think that is huge. However, it is something that often takes conversation and takes time. Don’t rush. I recommend being observant and pursuing the opportunity when you feel like you have all the information.