5 Ways Collaboration Saves Your Customers Money (and Why It Matters)

When it comes to collaborating with strategic partners, most businesses have a mindset of using the partnership to grow in a way that helps them maximize revenue or reduce costs. While this is good, the best strategic partnerships also consider how you can save your customer money, too.

Demonstrating that you are trying to help your customer save money will ultimately engender greater customer satisfaction and loyalty. This can deliver a higher lifetime value for each customer, creating a highly desirable win-win-win for you, your partner and the customer. With the right approach, you can save customers money, while also strengthening your bottom line.

1. Deliver Savings That You Can Pass on to Customers

When you lower your operational costs through a strategic partnership, it can be tempting to simply pocket the difference to gain an immediate boost to your profit margins. And while you shouldn’t sacrifice all of those newly-gained efficiencies, it may be worthwhile to consider how you can pass on at least a portion of those savings to your customers.

Increased efficiency in your logistics or back office operations should naturally provide immediate value to your customers by improving customer service or delivery reliability. If you are able to also lower prices, you create a pleasant surprise that encourages repeat business.

2. Drive Sales Volume to Maximize Growth

Strategic partnerships can also be used to increase sales volume. For example, a strategic partnership that allows you to provide targeted discounts on products or services — such as by pairing your offerings with those of a complementary service provider for a lower price — can drive sales volume for both you and your partner, while buyers save money compared to buying them separately.

One current example of this comes from the streaming industry, where brands that would normally be considered rivals are partnering to bundle their services in an effort to reach more customers. Disney and Warner Bros. Discovery’s bundled streaming services save customers money in comparison to buying the services separately, while also increasing their sales volume by making the services more attractive to budget-minded viewers.

3. Increase Demand During Off-Peak Periods

The right strategic partner can actually help boost demand for your products or services during periods when there might not be as much organic demand. A great example of this comes from Bryan Rand, president of Carefree Destinations.

As he explained during a recent conversation, the company partners with luxury resorts to help them sell unsold rooms at a discounted rate to Carefree Destination's clients.

"Quite often, these are rooms that the resorts would not be able to fill through their own sales channels, and certainly not at the standard price,” Rand says. “Our partnership helps create demand for rooms that would otherwise go unsold, in large part because of how much money our customers are able to save. At the same time, this creates a win for our resort partners by ensuring that they are able to maximize occupancy.”

4. Improve Customer Retention

Improving customer retention is a well-known way for brands to lower their expenses and increase their overall profit. But in many cases, efforts that improve customer retention can also help customers save money, too.

As Investopedia explains, customers who switch from one brand to a competitor may experience several different types of switching costs, including convenience, emotional costs, exit fees and time-based costs. The more unique the product or service, the higher the overall switching cost. This is perhaps most easily seen with cell phone plans, where major carriers often require users to pay out the owed balance on a phone before they can switch plans.

Ideally, your strategic partnership will create a compelling reason for a customer to continue to use your products or services. As you deliver improved value and service that keeps them loyal to your brand, you create hidden savings by helping them avoid switching costs.

5. Expand Your Service Offerings

Usually, when an organization partners with another business to expand its services, it will also charge for these new services to create a new source of revenue. But you don’t necessarily have to do that. Depending on the nature of your partnership, it may be more beneficial to offer the new service as what is essentially a “free add-on” to the services your clients already receive.

In this case, your customers save money because they don’t need to go to another provider to access the support they need. At the same time, you stand to improve their lifetime value by increasing their retention rate and overall satisfaction with your offerings.

When Your Customers Save, You Win Too

Helping your customers save money when they do business with you can be a powerful strategy for long-term growth. When you are mindful of their financial needs, they will take notice.

And as these examples illustrate, more often than not, the same strategies that help customers save on individual transactions can actually help grow your own business revenue. Be creative in working with your partners to help customers save, and you’ll enjoy a more positive brand image and repeat business.

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This article was written by Kate Vitasek from Forbes and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.