Below is an example Strategic Partnering Plan for a brewery looking for referral partners to accelerate the awareness and adoption of their mobile application.
1: Executive Summary
*This section provides a general overview of your partnering strategy. This portion of your SPP should be one paragraph in length and provide the reader with key points of your partnering initiative.
Wild Child will launch a referral partnership initiative to form relationships with liquor distributors, brewery equipment manufacturers, technology companies, and beer ingredient suppliers in order to accelerate the awareness and adoption of the Tapped Out app. Wild Child will offer a 15% revenue share to partners for the first three years of revenue collected from breweries that subscribe to the Tapped Out solution. The “game changer” goal for this initiative is to achieve an annual recurring revenue (ARR) stream of $500k in year 1 and $1.5 million in year two, then accelerate thereafter.
2: Problem Being addressed
*This section outlines the key issue(s) in the market that your partnership initiative will address.
The brewery industry has a massive communications gap between the rapidly expanding network of craft breweries and their end customers, the beer enthusiasts. Unlike most restaurants that have static menus, breweries constantly create new beers in search of the next “break out” prize winner. The lack of a convenient and consistent communications channel between breweries and beer enthusiasts diminishes the overall experience potential. An additional problem is the low average ticket of brewery visits. The majority of craft breweries do not offer food, which forces the patron to bring food, order direct food delivery, or simply leave the brewery. If breweries offered a convenient way to provide food to their patrons, one study showed average patron tickets increased by one beverage per person.
3: Purpose of the partnering initiative
*What capabilities or solutions will be born through your partnering initiative?
The purpose of this partnering initiative is to create a referral program that includes relationships with liquor distributors, brewery equipment manufacturers, technology companies, and beer ingredient suppliers in order to accelerate the awareness and adoption of the Tapped Out app. By forming successful partnerships with these collaborators, Wild Child will more efficiently drive awareness, adoption, and revenue to its Tapped Out solution as opposed to an organic (direct sales) growth strategy. When successful, this program will deliver greater awareness and eventually revenue needed to further expand the Tapped Out app across North America and globally.
4: Approach
*Which partnership type(s) are you looking to execute and what are the major deal terms your executives are interested in achieving in each partnering agreement? It is possible what is listed here may be quite different from what is negotiated in your final agreement. However, the process of documenting key deal terms here first creates clarity on intent and you can use this section to create your initial Term Sheet.
Wild Child intends to form referral partnerships with 30-40 top tier liquor distributors, brewery equipment manufacturers, technology companies, and beer ingredient suppliers across North America that will refer breweries to Wild Child’s direct sales team, eventually become Tapped Out subscribers.
- Wild Child will offer a 25% revenue share of the initial setup fee ($500) and 15% revenue share of the monthly subscription fee ($100) for the first three years.
- Wild Child will not share any other revenue streams, including food ordering or advertising revenue that Wild Child may sell on the app.
- Referral partners must provide at least one qualified lead each quarter.
- All agreements are non-exclusive and each party has a right to compel an immediate termination for convenience.
- Each partner agrees to participate in monthly Partner Business Reviews.
- Each partner will receive bi-weekly reports showing their referral performance, including an anonymous comparison to other referral partners. For example, ACME Hops provided 4 Partner Qualified Leads last month which was 7th most of the referral partners in this SPP program.
5: Strengths
*Identify the strengths that your company has that will make your company an attractive partner with respect to this partnering initiative. Each of your strengths will be “power” that you possess in a potential relationship. That is, your strengths are unique capabilities that can add value to prospective partners.
- Wild Child is regionally known for their award winning sours and meads.
- We have a very strong culture of innovation and strategy execution.
- We built and own the Tapped Out mobile app which is a first-of-its-kind communications platform connecting beer enthusiasts and breweries.
- The Tapped Out app already has 200 breweries registered and 75,000 active users.
- Wild Child has an industry recognized “partner-centric” culture and they have already leveraged partnerships to include a powerful food delivery service integration in the Tapped Out app.
6: Weaknesses
*Identify areas for improvement with respect to this partnership initiative. Recall that weaknesses that your company has are open invitations for other organizations to partner and shore-up your company’s deficiencies.
- Wild Child is only 5 years old and the Tapped Out app is just over 1 year old. Larger breweries may be hesitant to form partnerships because of their relatively short track record of performance.
- Wild Child has approximately 100 employees and only a few work in the business office. Because of the limited business office resources, they have limited capacity to operationalize large scaled growth initiatives.
- Breweries, like other food services companies, are traditionally a low margin company. This limits the amount of innovation investments Wild Child can make, given their owners want to run a debt free and profitable business.
- The majority of breweries using the Tapped Out app are concentrated in their local region. Therefore, Wild Child and Tapped Out are mostly unknown brands outside of their 6 state territory. They need a stronger national marketing footprint in order to grow the Tapped Out user base.
7: Opportunities
*Identify the external market forces that are favorable to your partnering initiative. These items will highlight your strengths and be reasons that other organizations would want to partner with your company.
- The quantity of breweries in the US has increased from 49 to 13,380 in less than 40 years.
- Today there are more than 19,000 breweries across 209 countries and 94% are classified as “craft” breweries.
- Industry analysts predict the volume of craft beer sold will continue to grow at a rate of 13% over the next several years.
- New breweries experience, on average, a three-year survival rate of 60%. One of the leading causes of failures breweries is a lack of customer awareness and engagement. Breweries with customer loyalty and communications programs are more than twice as likely to survive the critical 3-year milestone.
- Wild Child has an opportunity to create a global network of referral partners to reach up to 19,000 breweries across the globe through the Tapped Out growth initiative.
8: Threats
*Identify the external, market forces that may challenge or derail your partnering initiative.
- Some economists are predicting a recession in the near future. If it occurs, consumers are likely to reduce their discretionary spending, such as visiting craft breweries, which will put a financial squeeze on breweries.
- A larger, better funded tech company could build a competing app that would have greater functionality and a faster launch plan than Tapped Out.
- A global beer brand, such as InBev, could leverage its powerful global network and either create a competing app or partner with a competing app, resulting in massive headwinds for Tapped Out.
- The craft beer crazy may just be a fad and demand could plummet in the future, which would severely reduce the demand for the Tapped Out app.
9: Assumptions
*Assumptions are significant factors that could impact your deal that needs to be verified (where possible).
- Targeted brewery industry companies will be willing to participate in a referral partner program to help grow the Tapped Out business.
- Targeted brewery industry companies will have the influence necessary to get their brewery customers to purchase a license to the Tapped Out solution.
- Craft breweries will generally prefer to offer a food delivery service as opposed to adding their own kitchen or food truck service.
- Tapped Out app sales to breweries made to date, along with the associated adoption and usage from current beer enthusiast app users, will translate directly to the wider US and global markets.
10: Risks
*Unlike “Threats” which are external, “Risks” are internal factors that may challenge or derail your partnering initiative. Risks are easier to mitigate as your company has more control over potential outcomes.
- The executive team may underestimate the human capital, resources, and support the referral partnering program will require.
- The marketing team will need to support the partnering function, but the messaging and co-marketing motion is quite different with partners as compared to customers. This know-how must be learned.
- The Tapped Out app has technical infrastructure that is optimized for use in North America. If the app expands to Europe and beyond, new investments be required.
- Formal referral partnerships within the brewery industry are a fairly new concept. The partner recruiting process may take longer than desired because the Wild Child partnering team will likely need to educate each partner candidate on the program and the mutual benefits that can be created.
11: Requirements
*Identify the key requirements that are necessary to execute this partnering strategy.
Requirements for your partnering initiative may include: set amount of time, investment, technical expertise, real estate, machinery, travel, hardware, software, patents/trademarks, attorneys, and/or consultants to name a few.
- Hire a full-time dedicated partnership director to lead the new partnering program.
- Purchase a PARTNERNOMICS IQ license to manage the internal operations of Wild Child’s partnering programs, including this new referral initiative.
- Acquire licenses for LinkedIn Sales Navigator, Dripify.io, and Apollo.io to expedite partner recruiting and outreach activities.
- Allocated $3,000 per month for legal, advertising, and other co-marketing opportunities with partners.
- As the referral program scales, Wild Child will need to invest in additional software solutions such as account mapping, outreach automation, and a PartnerStack PRM system to best operationalize the partnering program.
12: Goals
*With respect to your Strategic Partnering Plan, we recommend that you identify only three goals. That is, what are the 3 most significant outcomes that your executives want to accomplish as a result of this partnering initiative? Later, you will use these three major goals to construct partnership specific goals with individual partners. By limiting this exercise to 3 goals your team will clearly understand the partnership priorities.
- The “game changer” goal for this initiative is to achieve an annual recurring revenue (ARR) stream of $500,000 in year 1, growing to $1.5 million in year two.
- Increase the total number of monthly Tapped Out active users from 75,000 to 800,000 within 12 months of referral program launch.
- Add at least 30 “active” referral partners from top tier liquor distributors, brewery equipment manufacturers, technology companies, and beer ingredient suppliers across North America within 12 months of launching this SPP referral program.
