Strategic endorsement partnerships are an essential part of business operations. It works to provide your business with a secondary revenue source while helping other businesses do the same. Although strategic endorsement partnerships are beneficial, it can be difficult to establish this type of relationship in the beginning.
Create a Strategic Endorsement
A strategic endorsement works best when it works to promote and benefit both parties that are entering into the partnership. There are two primary ways to establish this type of relationship. The first one is where you are the endorsee and receive business through your strategic partner recommending you as a product or service option to their customers. In this situation, you are the endorsee.
The second type of endorsement partnership turns the tables a bit, putting you in the position of being the endorser. In this role, you send customers and potential customers to the other business you have a strategic partnership with when your business is currently unable to handle the present workload. In either case, the goal is to form a beneficial partnership with a business that complements, not competes, with your business.
You want to aim for being in the position of the endorsee as often as possible. By doing so, you gain a client base that establishes a sense of loyalty and trust with the strategic partnership business. Upon receiving a recommendation for your company from a reliable source, those customers are eager to do business with you. The operating costs are minimal and marketing is virtually non-existent outside of the word-of-mouth advertising that your strategic partner does on your behalf.
Three Strategic Partnership Situations
Strategic partnerships are only beneficial when both parties have something positive to gain from the relationship. Here are three different types of situations that can help you identify when a strategic partnership opportunity for your business is available.
1. Inability to Keep Up With Demand
In this situation, another business promotes your products and services to their customers when they are unable to meet the customer need themselves. For example, your strategic partner can’t currently handle a wedding reception due to current renovations taking place. The business then recommends your venue as an option to potential customers.
2. Secondary Purchase Requirement
In this situation, your business offers a product or service that complements what the strategic partnership business offers. For example, you are a bakery specializing in wedding cakes. You form a partnership with a local wedding dress shop. As brides-to-be make dress purchases, the store recommends your bakery as the only option to provide a cake for the wedding reception.
3. Failure to Make Initial Purchase
In this situation, your strategic partnership business fails to secure a sale from a potential customer. For example, a potential customer is looking for a certain type of landscaping design for a front yard. However, your strategic partner only handles lawn care services. That business would then recommend your landscaping business to the customer as a means to fulfill their needs.
In certain situations, you will serve as the endorser in a strategic partnership. You will then be in a position to recommend the products and services that your strategic partners offer as a way to enhance their business revenue.
Five Ways to Serve as an Endorser
By serving as a strategic partnership endorser, you can help your customer base solve a problem or fulfill a desire they have, yet you are unable to provide the product or service yourself. Here are five ways you can provide customer assistance while promoting a partnership business at the same time.
1. When You Don’t Offer a Product or Service
You will need to keep a valuable resource guide handy for those times when customers are looking for a product or service that you do not offer. It allows you to recommend a strategic business partner that can fulfill the order. By making the partnership recommendation, you save customers the time, hassle and financial burden of tracking down the product themselves.
2. Additional Purchase Necessary
You can make business partnership recommendations when customers inquire about needing a complimentary service to a product they purchase from your business. For example, if you are a furniture store, you can recommend a partner’s interior design service as a way to help a customer redesign a living room when that customer makes a purchase from your store.
3. Customer Relocation or Transfer
In situations where your customer moves to another geographical area, you can reach out to businesses in that area that mirror the products or services that you offer. For example, as an accountant, you can refer your customer to a fellow accountant in the new area. That accounting service agrees to pay you a referral fee for sending the new client to their office.
4. Failure to Make a Purchase
There are times when a customer comes in contact with your business yet fails to make a purchase. It can be because the customer couldn’t find something of interest or they are looking for something yet didn’t like what you were offering. You can still financially benefit from the situation by recommending your strategic partnership business.
5. Unable to Meet Client Demand
You may not always be able to meet client demand, despite your best efforts to try and make it happen. It occurs when your product manufacturer doesn’t have a product readily available or your sales promotion runs better than you expect, resulting in a product being out-of-stock. Making a recommendation of a partnership business prevents you from enduring a financial loss as a result of the situation.
Each of these situations where you serve as the endorser works to benefit another business, in addition to your business. In the situations where you serve as the endorser, there is likely another partnership business servicing as the endorser and sending business your way as well.
Three Endorsement Systems
Not every partnership will work out perfectly. There will be times when businesses fail to recommend your business to customers and possibly times where you will do the same. Take a look at the three endorsement systems so you know what to expect before entering into a new partnership situation.
In this type of system, you are unable to control how your strategic partner handles the endorsement. It puts a loose agreement in place that leads to a partnership business not having the necessary motivation for recommending your business to customers. You are unable to know how your strategic partner identifies situations where their customer could benefit from your business. You also have no way of knowing whether or not the recommendations are taking place.
In this type of endorsement, your strategic business partner agrees to include you on promotional materials that go out to their customers. It works to gain brand awareness for your business as customers who receive the list will make eye contact with your listing. Although you are on promotional materials that put you in front of a new market segment, the partnership reciprocation may not be very strong in the end.
In this endorsement type, you are in control of the promotional messages and the manner in which other strategic partners recommend your business to their customers. Each time your strategic business partner recommends your product or service, they provide the customer with a list of benefits they will receive as well. It is the ideal type of endorsement situation and the one you want to strive to be in each time you encounter a new partnership opportunity as it benefits the endorser and the endorsee at the same time.
Implementing A Strategy
There are several steps involved in implementing the endorsement strategy that is ideal for your situation. You want to look for the strategy that places you in the position of endorsee as often as possible. Here are the six steps to implementing a strategy that works for you.
Step One: Select Your Ideal Endorsement Strategy
Start by identifying the things that prompt customers to make a purchase from you or another business. Create a list of purchase triggers that will prompt customers to make a purchase with you or a strategic partner. Examples of techniques you can use include the following.
Step Two: Determine the Benefits for All Involved
Identify the benefits your customers will gain from the strategic partnership. Then pinpoint the benefits that your business and a strategic business partner will receive from the arrangement.
Step Three: Calculate a ‘Marginal Profit’ Level
Pinpoint the profit amount that you will receive when a business recommends your services. Then do the same for a strategic business partner over a period of one financial year.
Step Four: Select Your Ideal Techniques
Narrow your list of choices down to one strategic endorsement system that works best for you. Include a relevant technique to implement the endorsement practice for yourself and your strategic partner.
Step Five: Identify Possible Business Partners
Select the businesses that compliment your products or services as ideal endorsement partners. You may also want to look at businesses outside of your industry that could benefit from a new market segment.
Step Six: Create the Program
When creating your program, partner with businesses that offer quality products. Maintain ownership of your mailing list or other customer contact information. Establish ownership of the partnership so that you can control how and when your business receives recommendations. Set up a trial period to ensure the partnership will run smoothly.
Building a strategic partnership takes time and energy. However, you stand to receive significant benefits that include establishing a secondary income and exposure to a new market segment.