Using Strategic Partnerships as Multipliers
When Sony realized that the action camera market was growing bigger due to Go Pro, they launched an action camera with much better features (image stabilization, more megapixels) than Go Pro at 1/3rd the price, had bigger marketing budgets and brand recall. Go Pro beat them by building offerings around their core products including mounts and holders to make it easier for users to use their cameras. This is something Sony never focused on since their engineers were busy building the next better camera. Today Go Pro sells 7x times more action cameras than Sony. Referring to the “power of little ideas” by Wharton professor talks about “creating a family of complementary innovations around a product or service, all of which work together to make that product more appealing and competitive; The complementary innovations work together as a system to carry out a single strategy or purpose”.
The world is increasingly shifting from products to solutions. How can an offering solve a customer need or problem? Often, it is not a single product but an “ecosystem” that solves or addresses that need. Instead, there are a few interdependent products and services that need to work together for the customer. Example being, a Smartphone alone cannot address the needs that it addresses today without the ecosystem of apps, good data connectivity etc.
This has led to a growing “solution marketing” approach which makes marketers think about “benefits” of the overall offering rather than the tech-specs of individual products.
This is where it is important for organizations to think about strategic alliances and partnerships. The reason I emphasize on the word “strategic” is to differentiate between partnerships that are of the reselling/distributing nature. Having channel partners is imperative to selling products in the market and add to the company own sales team.
However, for this article, we are focusing on “augmenting” the offering through ecosystem partners and complimentary needs around the product.
Strategic partnerships act as “multipliers” for your organization and offering. There could be multiple kinds of such strategic partnerships:
- Technical product integration: This is like mobile apps made for iOS or Androids. Here the developers work together on the APIs and make the products work together. This makes it easier for users to buy several “plug and play” products which are very easy to put together and everything simply works.
- Go to market partnerships (bundles): This is relevant when there are potential cross-sell and up-sell opportunities. Examples are when buying a Dell laptop online, users get an option to buy keyboards, backpacks, headphones etc. Some of these products might be white labelled or just sold together as independent brands. These are examples of soft bundles. There could also be “hard bundles” when the users are given an option to buy two separate products or buy them together for a certain economic benefit. An example of this is bundling printers and inks together or shaving razors and blades together. These bundles could be from the same company or different companies.
- Joint marketing activities: These could vary from local marketing activations or global brand partnerships. An example is two sports brands announcing partnership and going to sporting events together. Things like bundling fitness devices along with running apparel and shoes. An athlete would typically buy these two products anyway, and a handshake between two complimentary brands send a message of being “better together” and a reassurance for the user. Another approach, especially if you are a SMB but have a complimentary offering to a large organization, is to invite senior execs from the larger organization to come and speak at your events. This builds a lot of confidence for the customers and partners about the partnership.
To be able to build an ecosystem with any of the options listed above, a CEO/CMO needs to have the following strategy:
- Understand the user personas, the use case scenarios where your product is being used.
- Identify the complimentary offerings around your product.
- Approach partners with a clear vision on the “joint messaging”
- Involve channel from both sides of the business and if possible customers to do message testing
- Illustrate the benefits of the joint offering and how is that solving a problem for the customers
The above strategies can be applied to any business that is trying to make their offering larger than the offering itself and really trying to solve a problem for the customers. They will love you for it.