Bredin Report: Partnering for SMB Acquisition

At LEND360 in Chicago on Monday 9/12, Bredin CEO Stu Richards will moderate a panel on partnering to acquire SMB customers. While the specific focus will be on acquiring borrowers, the principles of partnering for SMB customer acquisition apply to any industry.

For a preview of the panel discussion – and to bring you hard-won lessons on partnering successfully – we interviewed our panelists Jim Granat, Senior Vice President and Head of Small Business at Enova, and Michael Tryon, Director of Strategic Partnerships at Biz2Credit.

What are the top three criteria you should consider in a partner?
JG: First, you need to consider the product need and fit with the potential partner’s customer base. Second, you need to think about the type of commitment the partners are willing to make to a program, both in a short-term test and in the long term. Third, you have to assess whether the partnership have scale where the effort from both sides has a material impact on the goals of both companies.

MT: It’s important to understand how the partner plans and executes their marketing and communications to drive in prospects or existing customers. This will help you to set program goals and plan the level of support required to manage the partnership.

What makes a partner channel efficient is the ability to reduce up front marketing expenses, campaign cost, and plug into their existing base of small businesses immediately. So, it’s important to assess how a potential partner contributes scale and the ability to access a larger audience then what we reach in our channels today.

Finally, you need to consider how technology will be incorporated. For example, using an API experience results in a 50% improvement in pull-through and conversion over a URL-to-landing-page experience. This capability also offers additional placement and marketing opportunities as the partnership grows and scales up to measure, track and report on results.

How should you think about partnership terms?
JG: If you need to boost your unit economics, processes, or product to win or participate in a partnership, it is probably the wrong relationship for your company. It has to be a mutual win-win-win for the lender, partner, and the customer. High levels of communication and goal setting are key.

MT: The Biz2Credit model offers both a pricing discount to the customer and a revenue share component for the partner. We promote our program on its ability to close loans efficiently and in a timely manner. For many partners, we can create value by offering reciprocal referrals back to them from Biz2Credit. Our ability to target our customers with offers throughout our customer journey using technology results in a higher conversion rate for the partner.

We also strive to create a best-in-class customer experience. Once a small business becomes a Biz2Credit customer, 50% of the time they refinance with us again. This creates an ongoing revenue stream for the partner.

What are the biggest watchouts/potential pitfalls in a developing a marketing partnership?
JG: Spending too much effort on bad unit economics or partnerships that aren’t going to work, and having a partner who isn’t invested – and thought one email to their customer base would work.

MT: Overpromising and underdelivering. Make sure you understand actual results that your partner has achieved, not concepts or tests that project what they think they can deliver.

It’s also essential to monitor performance and results closely. Use data to optimize and create efficiencies that improve conversion and create a good customer experience. Don’t set it and forget it; have a plan and expect to make changes.

Finally, stick to your business model. If you find that a partner may not be a good fit for your company, don’t be afraid to exit the agreement.

Need help understanding and/or engaging SMBs? Bredin can help you understand SMB needs and preferences quick-turn, actionable market research. We can also help you develop high value content and social media posts to boost SMB awareness, brand perception, leads, conversion and revenue.

About Bredin

Bredin was founded in 1991 by America's foremost small business expert, author and syndicated columnist Alice Bredin. From its beginning, Bredin was designed to be a breed apart: 50% research consultancy, 50% creative agency, 100% focused on SMB. Based in Somerville, Mass., Bredin helps Fortune 500 companies understand, reach and retain SMB customers through timely, targeted research and award-winning marketing programs.