Why big brands going crazy for business partnership?
Some of the headlines in last few years (not in chronicle order)
Tinder and Lyft Announce Partnership Including New Features for Post-Lockdown Daters
Starbucks Coffee has announced a partnership with Spotify
Smartphone taxi app company Uber and music streaming service Spotify have announced a partnership
Taco Bell and Frito-Lay put together one of the most successful products in fast-food history
Adidas and Spotify teamed up to devise personalised playlists for runners.
What is happening?
We called it strategic partnership, a new way brands are partnering up to extend their audience reach (possibly reach twice as many people), encourage innovation and increase their revenue. As both parties shared vision and shared objective of providing a more personalised experience to their customers and creating a mutually advantageous environment for their business.
Let's take the case of the Spotify & Uber partnership. The partnership means that users will be able to link their two accounts within the Uber app and build music playlists for their journeys.
How will Spotify be benefited?
Spotify might be able to persuade more people to upgrade to premium despite having a very generous freemium offer as well increase their global reach.
How will Uber be benefited?
Uber users will be able to play Spotify playlist for their journey.
One thing is clear that strategic partnership provides benefits that are beyond traditional marketing and it is a win-win situation to everyone, if executed correctly it can be a great asset for the company.
Following are the immediate benefits:
Custom personalised experience for their customers i.e more happy customers, more business.
Create mutually advantageous environments for their respective business.
Reach out to more audience and increase revenue i.e higher growth rate.
Big companies have funds and teams to execute such partnerships but small & medium businesses don't have such luxury to leverage on strategic partnership benefits. It's not small & medium businesses don't do partnerships, however the existing methods are not scalable (mostly using physical coupons) therefore they need technology driven tools which can help them to build partnership, execute it more efficiently and help them grow their business.
To conclude, small & medium businesses can also benefit through strategic partnerships, as business owners need to learn from bigger brands who have successfully demonstrated the power of partnerships.