Additional products and services give as the chance to extend our customer relationship and reengage with our customer. If we can provide one good customer experience, we should be able to provide more. The more we provide, the stronger the relationship and the more likely they are to stay loyal.
A wider portfolio of related products and services can also be a competitive advantage. Most customers prefer to deal with fewer suppliers thus the one who can satisfy a wider range of needs is often preferred. Once the relationship is made, the concepts of switching costs and satisficing act to keep the customer engaged. You still have to deliver good customer experiences but the advantage is with you, the incumbent supplier.
We can also be the conduit to other suppliers who offer complementary products or services or even just recommended suppliers who we know offer a quality product or service. We enhance our own relationship and reputation by assisting the customer to solve other problems.
Strategic partners make great logic for the vendor if they can complement the capacity and capability of the vendor. Access to a larger customer base, distribution facilities, marketing resources, other complementary partners and co-branded and hosted events which spread the risks and costs are all reasons for using strategic partners. However, we need to look at this from the viewpoint of our customers.
Through strategic partners, we can access some of the complementary products and services which the customer is seeking. We reduce the risk perception of the customer by helping them in their selection and evaluation process by nominating a supplier which we are willing to work with. Since our reputation is at risk through the partner, it is in our interests to be careful in selecting them and this helps the customer screen potential suppliers.
We also help the customer by selecting strategic partners who have complementary products and services which work with our own. Rather than the customer seeking out suppliers and having to worry about whether products and services work together, especially with electronic interfaces, interface standards, database and operating system compatibility and so on, the vendor can preselect these. This way the customer knows that compatibility problems have been resolved. The same consideration may also occur with quality and form of service, availability and culture of the partner organization.
By selecting and working with strategic partners you have the possibility of accessing a much wider customer community but you also assist in providing an additional value added service to your own customers.
Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia. A series of free eBooks for entrepreneurs and angel and VC investors can be found at his site here.
