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Strategic partnerships
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This story appears in the March 2000 issue of Startups. Subscribe »

The Internet makes it faster than ever to communicate with others--and easier than ever to build strategic partnerships. For entrepreneurs, strategic partnerships are a serious marketing tool that enables you to play alongside the big guys. An online partnership might be anything from a co-branded, co-hosted site to a two-way referral agreement to an exchange of products or services. But the key is for both sides of the partnership to gain access to something previously inaccessible.

For many entrepreneurs, the payoffs include an increase in site traffic from a link on an industry leader's Web site. Shannon Anderson of Albuquerque, New Mexico, owns Babies Online LLC, a site devoted to new and expectant parents. The e-commerce site Baby Universe contacted her about a partnership agreement in which they would become the exclusive recommended baby store on her site. "In return, they placed links back to Babies Online," says the 31-year-old entrepreneur. "I've experienced increased traffic, revenue and respect since we began this arrangement." Are there opportunities for your company to partner with a larger industry player? Possibly. The key is figuring out what you'd like to accomplish and what you have to offer before you approach a potential partner.

Mark Florence, 34, is president of CrossMarket Corp., an online business-to-business marketplace site for the giftware, housewares, tabletop and home-furnishings industries. He says the first step when forming a partnership plan is to come up with a list of objectives. What benefits will your company get from the partnership and what are the benefits for your potential partner?

"Benefits include increasing traffic, leveraging the partner's position in the market, providing additional products or service offerings to customers, and generating additional revenue streams or financial gains," says Florence, whose Medford, Massachusetts, company recently partnered with the portal Lycos to offer a complementary product to Lycos' online store creation tools.

Step two is to come up with a list of partners that fit the bill. Where can you find partners? "Potential partners could be current or potential suppliers or customers, competitors, or firms that provide additional value to your customers," says Florence. "The partnerships that succeed long-term are those that provide a win-win relationship for the small business, the partner and their customers." The last step is to make contact with the companies you've identified. The Palo Alto Site Network has seen such benefits from actively seeking out partnerships with such sites as WSJ.com and Yahoo!; in fact, they've added a full-time employee for this purpose alone. "You have to actively seek out the site's producers, partnership-marketing people or business-development people and explain the possibilities," says producer Paul Berry, 24, who set up the successful partnerships for the Eugene, Oregon, start-up.


Shannon Kinnard (shannon@ideastation.com) is president of Idea Station, an e-mail marketing agency in Atlanta, and author of Marketing With E-Mail(Maximum Press, $24.95, 800-989-6733).

Hear Ye, Hear Ye

If your partnership is newsworthy enough to generate press coverage, both sides gain added publicity. And while the publicity potential alone isn't enough to sustain a partnership, it certainly is one benefit of forming one. "There are occasions where the public relations opportunity is 90 percent of the reason for creating a strategic business partnership," says Cynthia Hollen, 36, president and co-founder of Knowledge Strategies Inc., an Internet consulting firm in New York City. "After all, if the story is that good, the likelihood that there is no benefit from the relationship is very low."

How can you get the word out about your deal?

  • Create a press release to post on both partners' sites. Focus on the benefits your partnership offers each side and its implications for consumers and the industry.
  • Send your release to members of the press who cover beats specific to your industry and your partner's.

Contact Sources

Babies Online, http://www.babiesonline.com

CrossMarket Corp., (781) 393-4411, http://www.crossmarket.com

Knowledge Strategies Inc., http://www.kstrat.com

Palo Alto Software Inc., http://www.paloaltosoftware.com

Edition: December 2016

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