ICYMI– Building and Facilitating Business Partnerships
For our August Bank & Brews workshop, we were joined by Tim Hayden, CEO of Brain+Trust Partners, a strategic consultancy based out of Austin, Texas. Brain+Trust Partners helps brands personalize their products, services, and customer experience by leveraging their existing data and resources. Tim's focus for the August workshop was how businesses of any size can create partnerships with other organizations for a mutual benefit.
Tim and his team have defined three main levels of strategic partnerships:
Level 1: Building New Channels
Building alliances with entities that serve the same type of audience as you, or just the type that might be interested in what you have to offer, is a great way to create a basic partnership. An awesome example of this is the 2020 partnership between Bumble (a dating app) and Babe (a wine company). Their campaign included joint marketing on moving trucks that said, "Your ex is canceled. Babe and Bumble are here to help you move on. Literally." While both companies are from completely different industries, they were able to find a common customer and build an affiliate campaign around them.
There has never been a more pivotal time in history in terms of technology and information, according to Tim. Businesses should take advantage of the unique ways that people currently absorb information. One of Tim's favorite ways to do this is to be a thought leader for your industry or a relevant topic. Think about participating in mediums like podcasts, newsletters, or webinars to share your expertise on a topic or issue. You may be able to find the answers to some of your business questions or problems outside of your industry by collaborating with people outside of your typical environment.
Developing new channels for your product or service is not limited to just retail. These types of relationships can be as specific as a third-party store selling your product or as expansive as completely shifting the way customers experience your product. Tim's favorite example of this was an Austin restaurant and bar shifting from only selling their products at their original location to selling at hundreds of grocery stores. What was once a unique experience that required visiting a single location has developed into that brand delivering the same beloved experience to their customers neighborhood grocery stores.
Level 2: Strategic Partnerships
When businesses want to increase the complexity of their partnerships, Tim has defined three critical steps.
- Determine the sharing of operational expenses & resources
Take a deep dive into the logistics of your partnership. How will revenue be shared? Who will cover what expenses? These discussions are necessary up-front to create a strong and equal relationship.
- Define the terms of the relationships
Partners need to think through what type of relationship makes sense for each of their businesses. Is it an alliance or a formal partnership? Is this partnership requiring e-commerce or just a joint-marketing strategy? What is the capacity of each partner?
- Alignment of purpose
Successful partnerships are built from businesses with aligned values and mission. It's important to think through not just what the goal of the partnership is, but also what the purpose, mission, and goals of each individual company are. An example of this would be a for-profit business partnering with a non-profit organization. Customers often will spend more if they know their purchase supports a good cause. Evaluate how your partnership can build goodwill for both organizations.
Level 3: Joint Ventures and Limited PartnershipsÂ
Before taking a partnership to the highest level, partners should formalize their agreements with their legal counsel and banks. Tim recommends speaking to your bank prior to creating a legal relationship with another organization. By changing the structure of your business, you may impact your access to capital later on. The advice of your bank and attorneys may help you avoid a long-term partnership that might not benefit you later on.
Partnerships can create unique development opportunities for businesses. Whether they are simple relationships or complex ventures, well-executed partnerships can strengthen any size of business
Information about Bank & Brews
In partnership with Startup Waco, Bank & Brews is designed for anybody who wants to learn more about starting or growing a business! These monthly events are free and are now hosted virtually via Zoom Webinar. Visit Extraco's Facebook page to learn more about upcoming Bank & Brews!
About Extraco Banks
Extraco Banks and its affiliate companies are dedicated to building people, businesses and communities. Since the Great Recession, Extraco has extended over $2.5 billion in loans to 25,000 customers, while financially supporting over 1,275 community organizations working to create economic vibrancy, job growth and overall quality of life to our communities across central Texas. Founded as a cotton warehousing company, Extraco, at $1.5 billion in assets, is the largest and most comprehensive locally owned bank between Dallas and Austin, serving over 120,000 customers banking, mortgage, insurance and wealth & trust needs with creative and innovative excellence.
Learn more at: https://www.extracobanks.com/.