Use of Tie-Ups Across Businesses

When Spotify and Uber partnered in 2014 to offer in-car music streaming for the riders, everyone claimed it to be a marketing gimmick. But the alliance was simply too powerful to ignore.

Imagine hailing a taxi and playing your favorite tunes during the ride, as you would in your own car. This personalization of the riding experience gave Uber a hard-to-beat competitive edge in the market, while both the parties benefitted from the other's audience reach.

Today, Uber generates over $6.1 billion every year; all because of a strategic partnership with Spotify, among many other brands like Trulia, Virgin America, etc.

Closer to home, CRED's commercial starring Rahul Dravid (a personal brand in his own right!) as the "Indranagar ka Gunda" single-handedly exposed the brand to country-wide prospects. That's mass brand awareness done right.

The lesson? You cannot take your business to the top of the mountain alone. After all, like humans, no business is an island. It takes strategic alliances and partnerships to thrive despite the maddening competition.  

Especially in today's business world, strategic tie-ups can do wonders for your business like no other.

1. They require the same efforts and resources as single customer acquisition, but deliver a ton of customers for a long, long time.

2. With credible partnerships, you'll gain recommendations from well-established people and brands who enjoy a fair bit of influence on the community you're trying to reach. Now that's easy, targeted access to your ideal demographic.

3. If you lack expertise in a specific area, you can start outsourcing partnerships to delegate such related operations to the "experts." Not only does this get the work done effectively, but you also save time and costs.

Where to Seek Strategic Partnerships?

The idea behind corporate partnerships is pretty simple. Mutual benefits!  

But who can be a partner? Literally anyone who comes close to your total addressable market.

Think industry leaders, local shop owners, trade associations, brands offering ancillary services to yours, NGOs, former employees and employers, product manufacturers, outsourcing firms, among many others. And how do you birth such collaborations? Two ways: 

a. Romance the Sharing/Gig Economy

When in a business dilemma, always turn to the gig economy, especially if you're a small business.

Today, there's a robust network of freelancers and solopreneurs you can tap into. With their field expertise, flexibility, prompt response, niche skills, and variety of business experiences, they're often the perfect fit for the job.

Now, although freelancers make for great partners, you don't want to hire them only for circumstantial needs. Instead, take time to nurture their growth like you would your employees'. This will translate to better service and loyalty for the longer term.

b. Find the Bigger Fish

Large corporations partnering with startups have been growing recently, but do you need it? Well, it depends. Not all industries are alike, after all.

So, when on the lookout, ask yourself: Do you share common interests? Who are you both targeting? What are the value bargains? If everything sounds good, you should communicate your proposition and take it ahead. But can a small fish team up with a big fish without getting swallowed?

Yes, there's a good chance of such relationships derailing in the future, but if there is honest two-way communication, there's a lot more to gain even after losing common ground. 

Still not convinced a tie-up is in your best interest? Let me break it down for you.

How Tie-Ups Can Help Your Business Grow 

Here's why you shouldn't shy away from starting a corporate love affair.

1.       Mutual gains through value alignment 

All the value bargains in a collaboration should be complementary, where each company benefits from the other. This is also a smart way to turn your competition into a trusted ally, particularly in a saturated segment. 

Take H&M and Myntra's 2019 tie-up, for example. Amid the pandemic-induced decline in footfalls, the retail fashion giant faced fierce competition from India's exploding network of online apparel stores. 

Seeing the poor performance of its own website in the country, the Swedish brand partnered with Myntra to bank on its consumer network.

And, in doing so, killed two birds with a single stone:

·         Enhanced its local presence

·         Increased sales  

Myntra, on the other hand, earned its share of commissions; clearly, a win for everyone involved. 

2.       Provide additional value to existing customers

Joining forces with another brand is a great way to provide additional value to your customer base, provided their services/products complement your offerings or have a similar value prospect.

It could be a smaller or a bigger business than yours but sharing similar beliefs and goals. Like the recent collaboration between H&M and Sabyasachi, which sold out in a few seconds worldwide.

It was a first for both the parties; H&M retailing sarees for the first time and Sabyasachi selling online. 

Following the collection's release, the backlash did rain on their parade; nevertheless, this was a masterstroke in partnership marketing and one we could all learn from.

Parting Thoughts

Now that you know how strategic tie-ups can create lasting value propositions for your brand, the next step is forming one. So ask around your network, scout for like-minded partners, and start building relationships on mutual trust and understanding.