by Iris Dorbian.
Sometimes the best small business partnerships can be fortuitous, born in ways that have nothing, at least, outright, to do with commerce. For Matt Forsman, a San Francisco-based running coach, that was the case. As owner of Marathon Matt, a coaching program he launched in 2005, his company’s fruitful partnership with the nearby PSOAS Massage/Bodywork, a massage clinic, had nothing to do with instigating huge profit margins. Says Forsman: “I engaged them primarily to provide some stretching clinics for my runners.”
The affiliation has become a positive community mainstay that has benefited both operations. Marathon Matt’s clients, who Forsman says have quadrupled from 30 to 40 per year to between 150 and 200, are referred to PSOAS, which as a courtesy, extends a 20-percent discount to Forsman’s customers. “They've told me I generate more business for them than any other training organization or club in the San Francisco Bay Area,” says Forsman.
In addition to providing discounts to Marathon Matt’s clientele, PSOAS reciprocates their end of the deal by promoting their partner’s programs via e-mail newsletters and in other collateral pieces posted in their neighborhood. They also co-sponsor the shirts Forsman provides runners in his programs.
Though the ROI is hard to quantify in terms of dollars and cents, according to Forsman, each party in this symbiotic pairing has reaped enormous dividends nonetheless: Marathon Matt gets increased visibility through PSOAS’s promotional efforts, while the latter enjoys a larger customer base as a direct result of the relationship.
In other words, both companies get the best of all possible worlds. So, for small business owners looking to broaden their reach and attract more consumers, what are some best practices to find the right fit for a such a symbiotic relationship?
Seek out related businesses
If you’re seeking to carve a niche in your community or seize a healthy market share of your specific sector, then working in tandem with a rival business would probably not be a savvy business move (unless of course, you’re planning on buying that business and taking ownership of the existing clientele). However, if you team up with a business that can complement your own while filling a void (such combining a caterer with a wedding planner), then it could be the makings of a win-win situation.
This is a key lesson learned for Jane Coloccia Teixeira, president of JC Communications LLC, a small Pennington, New Jersey-based PR and marketing communications for the hospitality industry. “I have friends who have complementary businesses and we have teamed up so that we can go out and offer a complete resource for potential new clients,” she explains. “My graphic design-agency friends tell their clients they have someone who can do copywriting so I get the work and then I can tell a prospective client I have [about] someone who can do web design or ads so my other friends get work.”
Find a company whose marketing and messaging mesh with your own
Justin Lee, a co-founder of TheSquareFoot, a commercial real estate leasing firm in Houston, Texas, which targets small to medium-sized businesses, says a prime takeaway to widening his customer base is to leverage the networks of other small businesses that also serve his market. Because TheSquareFoot has been in operation for only 18 months, Lee and his small staff know efforts to promote their nascent company would only take them so far.
After admiring from afar the marketing and social media campaigns of Bounce Energy, a Texas-based electric company that focuses on smaller commercial users, Lee contacted their marketing directors via LinkedIn to broach a possible partnership.
“They loved our platform and our vision,” says Lee. “And they certainly saw the parallels between our two business models and who the target customer was. [As part of the exchange], we did things like trade blog posts [on our respective company’s sites] pertaining to commercial lease language about energy consumption and how to be more energy efficient at work. We have leveraged all of the small businesses who are part of their network and have let them know the value we provide.” The strategy has resulted in a surge of leads for TheSquareFoot.
Think of the synergistic value a partnership can provide to customers
This idea may sound counterintuitive, but if you place a higher premium on offering quality service to customers as opposed to brainstorming a “what’s in it for me?” scenario, then profit is inevitable, says Jeremy Fitzgerald, owner and operator of Bar 145, a restaurant in Toledo, Ohio.
To promote culinary arts in the city, Bar 145 invites guest chefs from other restaurants for their "Pinot on the Patio" events on Tuesday evenings. The guest chef partners with Bar 145's chef to mix up the weekly specials, which go beyond the menu’s traditional dishes. Fitzgerald and his partners feel that cross-promoting local restaurants will help the restaurant business as a whole. They also utilize social media to promote the event, tagging the guest chef in posts to reach more people. Since starting this event, Fitzgerald says Bar 145’s sales have swelled up to 40 percent on Tuesday evenings, a typically slow night of the week.
“Small businesses need to consider why they [want to team up with each other] first,” says Fitzgerald. “They should team up with others with the intention of helping the customer by filling a void or offering something original and unique. If this approach is taken when teaming up with other businesses, all parties involved will be successful and the overall customer bases will increase.”
Pair up with reputable businesses
Teaming up with a company that has a dubious reputation or offers shoddy services will only end up hurting the way your brand is perceived in the marketplace in the long run. Don’t do it. Make sure the company is your equivalent in service.
“Look for quality rather than quantity,” says Forsman. “I'd much rather have five to six quality partners than 10 to 12 mediocre partners.”
Don’t be afraid to negotiate specifics
Be very clear on how the partnership with work, counsels Teixeira. “Will you pay them commission for work they forward to you or will they [want you to bill directly to a client]?” she asks. Make sure everything is spelled out before you shake hands and call it a deal.
For small business owners seeking to broaden their customer base, pairing up with complementary companies might be an excellent move. But like a marriage, exercising caution and care is imperative before you proceed into an arrangement that may end up splitting prematurely due to irreconcilable differences.