In increasingly competitive market spaces, small businesses need to innovate and discover new, exciting ways to attract and retain customers. Discounting is still often the knee-jerk reaction when you need to gain sales or win contracts, but slashing prices may not attract the right customers and can in fact harm a brand. How then can you look to increase margins, average spend per transaction and enhance your overall value proposition?
The answer? Value added partnerships. By partnering with companies willing to offer your customers something ‘extra’ when they purchase from you, you can stand out from the crowd and improve your brand image without breaking the bank. While you focus on what you do best, whether that’s producing coffee or providing web development services, you can tap into the expertise or quality products of your partners to draw in more customers by giving them something extra. It can work for any type of ‘transaction’ whether a sale, request for a referral or invitation to opt in to your newsletter.
By partnering with companies willing to offer your customers something ‘extra’ when they purchase from you, you can stand out from the crowd and improve your brand image without breaking the bank.
The something ‘extra’ on offer can be as simple as a discount, free trial or sample. The benefit for your partner is that they will reach a new group of potential customers – yours. For both brands there is also the opportunity to enhance their credibility by being associated with the right partner brand. Depending on the deal, you may even succeed in generating additional revenue for your business as well as creating sales or generating leads. For example, a popular online imagery company gives its partners exclusive credit packages to distribute as incentives and then pays them when someone uses the package. It’s a win-win scenario.
Value added services and products are a great way to separate yourself from your competition, this strategy has been successfully implemented in the insurance industry in particular where forward thinking companies are using value added offerings, including cash back bonuses, road assist solutions and even business and IT advisory services to set themselves apart.
Added value in action
Looking at another example, a footwear business; call it Filippa’s. The brand is looking to encourage customers to purchase two pairs of shoes instead of the usual one pair. Rather than offering a discount, Filippa’s decides to partner with an events brand and give customers a 2-for-1 voucher to a popular two-day outdoor festival. Importantly, Filippa’s chooses a brand which is credible in the eyes of its target market and which brings with it a sense of being ‘cool’ by association. The offer makes sense because many women buy new outfits for these types of events and may jump at the opportunity of getting a new pair of shoes at the same time.
The events brand is willing to partner with Filippa’s because customers are required to carry out a reasonable action before receiving the voucher. At the same time more people will attend the event and spend money generating incremental revenue, or income that may not have been earned otherwise.
If the events company promotes the offer to its database, the Filippa’s brand will also receive some great exposure to a large and relevant audience.
Here’s how you can offer value
Potential added value partnerships could include working with other businesses to:
● Provide exclusive content with a purchase. For example a recipe from a cooking website, a book chapter from an experienced author or a piece of related research.
● Offer an accessory or sample from a partner that complements the product you’re selling. For example, headphones from a new manufacturer, an eBook chapter downloaded from a knowledgeable speaker or a relevant software trial.
● Build an additional feature into your actual product, which essentially becomes an ingredient or component of your offering. For example, roadside emergency assistance in an insurance product, a premium ingredient in a food product, a popular app into your cloud solution or an artist’s design into your clothing.
Value added partnership marketing can be as complex or as simple as you want it to be. I’m a big fan of running trials, or ‘first dates‘, to analyse the effectiveness of these partnerships. Trialling provides insight into potential user response and potential stumbling blocks before you roll out a larger campaign.
Here are some pointers to help you get started:
1. Set objectives: Work out what it is you want to achieve with your value added partnership, whether it’s customer loyalty, newsletter subscribers, social followers or trial sign-ups. Then outline some performance indicators you’ll use to measure the initial performance. You may look to gain 20 new subscribers or followers for example.
2. Keep your brand in mind: When you start to shortlist and eventually approach potential partners, make sure that what they do and how they present themselves is in line with how you portray your business. Big customer numbers may be attractive, but a poor reputation or customer service set-up can do more harm than good.
3. Set up a communication plan: You’ve got your partner, you’ve agreed upon an offering to trial. You now need to agree how you are going to communicate this and track it. It’s important to set dates, volume and what you’d both expect to see as a response rate, even if it’s conservative.
4. Launch and refine your offer: An important exercise in any partnership, even if just a trial, is to stay on top of what is happening and refine your offering where necessary. For example, if you’ve sent out a mailer and the bounce rate for the landing page is high, change the wording on the page before the rest of the traffic arrives.
5. Exchange honest feedback: Give open and truthful feedback and evaluate what could have been done better, what went well and what opportunities are ahead. Importantly, it was a first date and there doesn’t have to be a second, but you can still be cordial.
Start with these five key areas and don’t be afraid to aim high. You could catch that awesome brand at the right time, say during a product launch, and if you can prove you’ve considered the points above, you could negotiate a stunning deal for your customers. I landed a popular health food franchise when launching my retail website two years ago, which helped my start-up get off to a strong start.
The information provided in this article is for informational purposes only and do not constitute professional advice.