Action cartoons of the 1980s knew a thing or two about the value of partnerships. Take the animated classic “Voltron: Defenders of the Universe,” for example. On their own, the characters and their awesome lion-bots were powerful. But when they teamed up, the value and ability of everyone involved increased ten-fold. That’s what happens when powerful people come together to fight the forces of attrition — I mean, evil.
There are four big ways you can make the same kind of impact and build great partnerships: Build With Buy-Ins, Offer Commissions, Engage In List Swaps, and Call In Favors. When used to the best of their abilities, these individual perks can help your partnership become the giant fighting robot it was meant to be.
1. Build With Buy-Ins
Steve Martin, author of “Instant Profits: Making Your Business Pay” defines a buy-in as “a payment made to join a business such as a partnership.”
It’s buying shares in a company or some other form of financial investment that establishes a relationship with another business. When a one company needs equity and can offer some additional value to another business, a financial buy-in can be the way to go.
The benefits of building a strategic business partnership, starting with buy-ins, can be seen in the story of the startup Reserve.
Reserve is an app for finding restaurants, making reservations, and paying the bill, all in a quick and convenient fashion.
When attempting to “improve the dining experience,” one has to connect with the dining establishments. Reserve co-founder and CEO, Gregory Hong, has done just that, partnering with hundreds of restaurants in major U.S. cities, from New York to San Francisco.
When presented with a tool to help better their own businesses, the restaurants bought in financially to help get this start-up off the ground. And through their personal support, Reserve had access to a wealth of feedback. Gregory Hong and his company were able to develop an app that went beyond even their wildest dreams.
2. Offer Commissions
Back when I was a kid watching the heroes of Voltron teaming up to form their giant Super Robot on Saturday mornings, my dad owned a used car dealership. After some years in the industry, my dad struck up an arrangement with a local mechanic.
The mechanic — Jose, if I remember correctly — often saw clients bringing in cars on their last legs, er … last wheels. Now, Jose was a good mechanic, but sometimes it’s better to trade a vehicle in than it is to keep paying to have it fixed.
As part of his agreement with my dad, Jose would send clients in need of another car down to my dad’s dealership. More often than not, my dad would have a new sell and, in return for sending over good business, Jose would get a commission of the sale — or a “bird dog fee” as my dad would say.
While Jose didn’t have the same sort of system, my dad would regularly send other car dealers he knew to Jose when they were in need of a mechanic.
Taking advantage of this aspect of a business partnership can benefit you in a few ways. Your customers feel grateful to you for providing them with another beneficial resource, you’ve increased your own role as the “reliable expert” in their eyes, and you enjoy the commission on top of it. Plus your partner will always be happy to have the additional business.
3. Engage In List Swaps
Being a newsletter company, we know a thing or two about direct mail success. To start, you’re not going to get very far if you aren’t mailing to the right people, especially when you’re offering a new promotion. So, what can you do to expand that tired old list?
You could jump through all the hoops of collecting a whole new set of names, either through various inbound marketing techniques or by purchasing a list from a provider. But why go through the effort when could just request a list swap?
List swaps are one of the best direct mailing techniques for reaching a new audience. They can be mutually beneficial for businesses who share a similar customer demographic.
For example, in 2007, two nonprofits — the League of Conservation Voters (LCV) and The Wilderness Society (TWS) — engaged in an email list swap. Both of these foundations work to promote nature conservation, and their mailing lists are already full of people who they know want to do just that.
As this was a list swap utilizing email and not traditional direct mail, the two foundations didn’t actually exchange lists. Rather, individuals on the LCV mailing list received an email from LCV encouraging them to visit TWS’s website and vice versa. At this point, each nonprofit gets only the names of those who opt-in to their website, providing them with the best leads.
Worried that if another company is reaching out to your clients, even if they aren’t a competitor, you’ll miss out on business? Don’t be! When the nonprofit support company M+R analyzed the results of the LCV/TWS list swap, they found it had “no clear negative effects.” In fact, the list swap “increased activism among participants.”
4. Call In Favors
Even the mightiest of lion-bots, I mean entrepreneurs can benefit from being able to “phone a friend” so to speak. Sometimes we just need a favor.
By providing favors, you create feelings of reciprocity — a give and take situation, if you will. By “doing a solid” for someone else, you can establish a connection that encourages such a gesture to be returned.
For example, imagine you’re an event planner in charge of booking events at a local venue. The night before a big event, a pipe bursts in the kitchen, flooding the whole space. Unless someone is willing to accept an “Under the Sea” theme, you’re looking at having some pretty upset clients on your hands, with no place to hold their event.
Luckily, the bartending service you’ve partnered with has access to a party limo. Yes, it’s last minute, but you’ve done favors for them in the past — such recommending their services for several wedding receptions held at your venue. Thanks to the strong relationship you’ve created with them, saving your reputation is just a phone call away.
Of course, not every situation will come with a guaranteed return. Make sure you are creating ties with someone who can be relied on to step up when the time comes.
Still, favors are a great way to build a relationship between partners. It’s a gesture of goodwill that can be returned in the future.
Bring It Together
I guess you could call this the “secret” fifth benefit that takes all the other individual perks to the next level: Combining them.
This is when five mini lion-bots come together to form one SUPER-bot. Alone, they are great, but only together can they take on the forces of evil — by which I mean increase customer retention, revenue, and benefit your business all the way around.
Imagine you’ve partnered with a company — let’s say they create custom, professional newsletters for small businesses. They have a killer marketing crew and masterful editors and skilled writers — some of which like to write blogs referencing ’80s cartoons. For argument’s sake, let’s pretend they’re called The Newsletter Pro.
Your partnership with The Newsletter Pro has long circled around mutual exposure and customer reach, usually in the form of shared promotions. But these newsletter professionals also employ a team of talented graphic designers. Why would you not call in a favor, should you need help designing a new FSI or banner for a company event?
Strong strategic business partnerships leave the door open for multiple avenues of exchange. While each of these avenues can help your business and strengthen your partnership, only together do they form into a giant robot to defend the universe create a valuable strategy that can benefit all parties involved.
Need to know more about the value of strategic business partnerships? Start by reading last week’s blog here. And never fall behind on blog posts again by subscribing today!
