For businesses hit hardest by the pandemic such as travel brands, live event promoters, in-location retail, gyms, and salons— cutting back is a matter of survival. Many have responded with layoffs, reduced hours, discretionary cost-cutting, and aggressive tactics to manage cash flow. Some panicked businesses looked anywhere they could for cost-reduction opportunities, including partnership programs.
Even a few businesses with higher-than-usual demand have cut back on partnerships because they are seeing less incrementality from referrals. The problem with this approach is that it overlooks both short-term opportunities and long-term consequences. Targeting partnership programs is in most cases counterproductive in terms of immediate revenue, cash flow, and long-term business health.
How to be flexible, creative, and smart in your partnerships
The trick to protecting their value is to be flexible, creative, and smart. Here are some do’s and don’ts we recommend to help you preserve your valuable partnership investments, leverage partnerships for immediate revenue, and ready your business for a strong start when the time comes.
- Do provide a reason to spend
When consumers are being careful with every dollar, you’ll need to provide strong motivation to spend now versus later. Use your content and deal-based partners alike to promote coded discounts, free shipping, flash sales, limited-time offers, and double points to encourage buying. Also consider flexible policies like extended, no-risk returns that let consumers buy or book now with the freedom to return or cancel later without penalty.
- Don’t be a jerk
Be sensitive, mindful, and transparent, even when you have bad news to share. A curt one-line email telling a partner you’re pulling the plug is both insensitive and short-sighted.
A thoughtful and personal phone call is more humane and more likely to preserve partner loyalty for the future. Most importantly, a caring approach leaves the door open for ideas and creative solutions your partner may have for keeping the partnership operating. A conversation handled with tact could turn into a great opportunity.
- Don’t sit on inventory
Aging inventory stuck in closed stores is money left on the table. Deal-oriented partners can be very effective at moving shut-in inventory out of your stores. Even if you are selling at or below cost, cash is cash, and last-seasons SKUs won’t move any faster next year. Call on those discount sites that specialize in moving inventory fast to consumers looking for bargains. Your CFO will thank you.
- Do embrace your community
When communities are in need, establishing social-good partnerships can help nonprofits or small businesses stay afloat, and it can provide your customers with a reason to buy. On the flip side, a crisis may be the time that the loyal relationships you’ve built with partners and consumers see you through. For more smart tips for partnership survival, read our ebook Navigating partnerships in a crisis or reach out to an Impact growth technologist at email@example.com.