The Partnership Economy

How Modern Businesses Find New Customers, Grow Revenue, and Deliver Exceptional Experiences

David A. Yovanno

• Publisher: Wiley
• Year: 2022
• ISBN:
  9781119819714
• Edition: 1
• Topic: Economía
• Subtopic: Teoría económica

Unlock the enormous potential of strategic partnerships

You think you know partnerships, don't you? But the nature — and growth potential — of partnerships for business has transformed in recent years. In The Partnership Economy, partnership automation expert and impact.com CEO David A. Yovanno delivers an insightful, actionable guide to navigating this newly defined era and growing your company's revenue far beyond expectations.

Using real-life examples from well-known brands such as Fabletics, Target, Ticketmaster, Walmart, and more, the book offers practical frameworks on how to unlock the value of modern partnerships. Along with showing how partnerships build brand awareness, customer loyalty, and competitive advantage, Yovanno reveals the tremendous possibilities for growth when partnership agreements work in concert across all partnership types, such as influencers, commerce content publishers, business-to-business integrations, and affiliate rewards.

In this book, you'll learn:

• Why and how the most innovative companies, both large and small, and across industries, invest in their partnership programs and consequently drive up to a third or more revenue for their organization
• How a variety of partnership types, including influencers, commerce content, traditional affiliate programs, and more, operate and how each can make a difference in your business
• Why you don't have to wait — you can begin your partnerships strategy today, either in-house or through agency partners, with a point-by-point startup plan and roadmap for growth
• What partnership maturity means and how to diversify and grow your partnerships program to fully unleash your organization's growth potential

Perfect for founders, executives, managers, and anyone responsible for revenue acquisition in any industry or sector, The Partnership Economy is an indispensable guide for anyone planning to grow their business and its revenue.

PART I
Welcome to the Partnership Economy

CHAPTER 1
Unlock Unexpected, Lasting Growth with Modern Partnerships

Every so often a game changer takes place in the business world that causes a fundamental shift in how things are thought about and done. We've seen game changers in supply chains, production methods, and marketing strategies, to name just a few. Companies that see and embrace relevant change have the opportunity to understand, shape, and benefit from the disruption. Over time they generate new forms of competitive advantage that enable them to thrive when others fail.

Modern partnerships are today's game changer.

Partnerships of one sort or another have been around since the beginning of commerce, but today's partnerships are a game changer because they enable companies to achieve significant and sustainable growth in today's fast-changing, highly competitive, and consumer-led marketplace. By harnessing the talent, resources, and market presence of hundreds, if not thousands, of partners, enterprises are able to expand their capabilities far beyond what they can achieve on their own.

These are not just any partners. These are partners that share the same or similar target customers and are passionate about meeting those customers' needs and desires. Partners come together to create value for their customers and they do so in a collaborative, transparent, and mutually rewarding way. They ask themselves: How might we create experiences that will delight our shared target customers? What can we create together that we couldn't do on our own? What information can we provide customers to add value to their daily lives?

Building on their combined understanding of the target customers, partners then translate these ideas into useful, interesting, and often remarkable products, services, content, and experiences. When these collaborations are truly a reflection of customer need and desire, the value these partnerships create is meaningful. They catalyze the reach, sales, and loyalty that companies need to generate significant and sustainable revenue growth.

Modern partnerships are making it possible for many of today's fastest-growing businesses, including Spotify, Uber, Airbnb, BarkBox, Harry's, Stitch Fix, and Casper, as well as established enterprises like eBay, Lenovo, and Walmart, to meet—and exceed—their revenue goals. Indeed, in a recent study Forrester found that companies with mature partnerships programs generate an average of 28 percent of their companies' total revenue through their partnerships efforts.¹ That is a fecund source of growth by any measure.

What's more, this is real revenue growth, not fluff. It's growth that comes from successfully reaching and converting new prospects into customers, expanding into new markets, increasing the lifetime value of customers, enhancing current value propositions and creating entirely new ones, and being able to quickly make strategic pivots that keep companies afloat during periods of market disruption (Figure 1.1). These are tried-and-true ways of making money; partnerships simply enable enterprises to achieve these business goals with a much broader palette of resources—perhaps an infinite palette.

FIGURE 1.1 Partnerships drive real growth, not fluff.

Source: A commissioned study conducted by Forrester Consulting on behalf of impact.com, April 2020. © 2020 Forrester. Reproduction prohibited.

The magnitude and sustainability of this growth is why more than 75 percent of leaders from companies of all sizes, stages of growth, and business models, and in every industry and vertical, see partnerships as central to their sales and marketing strategies and to delivering their revenue goals.²

How do these percentages translate into absolute numbers? Consider that North American companies currently have an average of 173 partnerships in their portfolios³ and the average partnerships program is forecasted to grow by 10 times over the next five years.⁴ That means that over the next 20 quarters, the average North American company will build and manage 1,753 partnerships. Some companies are preparing to far exceed that goal. Salesforce, for example, is recruiting 250,000 new partners to meet its goal of doubling its business in four years.⁵ Similarly, Microsoft is onboarding 7,500 partners a month to meet its growth goals; this is in addition to its 355,000 existing partners.⁶ Partnerships are now more than a growth strategy for a handful of companies—they indicate the emergence of the partnership economy.

Modern Partnerships at Work

Partnerships as a concept aren't new. For some time, enterprises have built complex webs of partnerships to effectively develop, distribute, market, sell, and service their products. Their partnerships have included retailers, value-added resellers, exclusive dealers or agents, and managed service providers—think grocery stores and car dealerships. Under this reseller partnership model, partners typically transact directly with end users or downstream partners, acting as enterprises' indirect sales and marketing and customer service teams.

Today enterprises are increasingly moving toward a new partnership model, the referral partnership, otherwise known as nontransactional partnerships. This new type of partnership reflects the reality that more transactions are happening within enterprises themselves, rather than with resellers—think subscription and direct-to-consumer (D2C) approaches. Like the reseller partnership model, referral partnerships are customer-facing. However, rather than transacting directly with the buyer, in referral partnerships partners simply refer and recommend an enterprise's products to its target customers. These referrals and recommendations can take many forms. They can be a simple email to the enterprise's target customers recommending an enterprise and its offerings. Or, at the other end of the spectrum, they can be a mobile app or website integration that incorporates an enterprise's offering directly into a partner's own platform, creating a permanent and ongoing referral. Two actual referral partnerships that represent both of these options are explored next.

Sunbasket and Rastelli's Partnership: Several Thousand Percent Revenue Growth in One Week

Sunbasket is a leader in the $7.60 billion global delivery services market. The company's healthy meal kits, which provide all the ingredients necessary to create delicious, home-cooked meals, simplify people's lives by eliminating their need to plan meals and go to the grocery store. What's more, Sunbasket's meals are considered healthier than commercially prepared food, and can be configured for any dietary preference: paleo, gluten-free, diabetes-friendly, pescatarian, vegetarian, vegan, carb-conscious, and more. Its meats are antibiotic- and hormone-free; its seafood is wild-caught; its eggs organic.

The meal kit industry as a whole was on a roll, enjoying compound annual growth rates of 12.8 percent before the coronavirus pandemic outbreak in 2020.⁷ As people's lifestyles changed during the pandemic, the demand for meal kits skyrocketed. Outbreaks of the virus at meatpacking plants further increased demand, as consumers facing empty meat coolers at supermarkets looked for other options. Sunbasket answered the call.

The company soon realized, however, that while it was providing families with three to four meals per week, it was not providing all of the food that a household needed. To help its customers access high-quality foods for the 15–20 other meals they ate in a week, Sunbasket worked with one of its long-time suppliers, Rastelli's, a purveyor and supplier of meats and seafood, to build awareness and interest for Rastelli'...