We’ve been in this loop before: inflation, layoffs, and a highly volatile stock market. A recession isn’t good for most businesses, except essential ones, and causes them to reconsider how they allocate funds and resources very carefully.
Technology partnerships have helped many companies survive recessions in the past. It is with technology that businesses are able to join the digital landscape and position themselves amongst the top players in the field.
And many of the top companies, including Microsoft, Hubspot, and Atlassian, report that a large portion of their revenue today comes from partnerships.
Partnerships can help in many different ways, especially during a recession.
If you’ve never thought about how partnerships can help save your business during a recession, keep reading.
Partnerships help reduce the cost of sales & marketing
Hiring and training sales and marketing staff on a whole new product means dishing out a pretty penny that you might not have during a recession. With a white label tech partnership, you can leverage your partner’s team and have them do the heavy lifting. There are many different types of white label partnerships so the capacity at which your white label partner helps you is up to you. Your white label partner can sell on your company’s behalf, or train your own sales teams to sell on their own.
In addition, your white label tech partner can offer your business marketing materials in the form of sales enablement kits or other marketing materials you’ll need to succeed. Getting it all from your white label partner means you save on producing, training and hiring the staff yourself.
Partnerships lower your CAC
Customer acquisition costs (CAC) are usually quite high during a recession, leaving businesses to wonder if they want to even try spending their waning budgets on leads that might not convert. Intent is usually low, and consumers’ funds are low bringing negative effects on ROI. Your partner can help you build a buyer’s persona and get you in front of the right leads. We’re talking about warm leads that have actually expressed an interest in your product or service. In addition, if you go to market together, this will lessen the strain on your marketing budgets and allow you to leverage their extended network of clients.
Partnerships increase your ARPA
Since CAC is high during a recession, you want to do everything in your power to increase the value that you’re getting from your existing clients. Tech partnerships that answer your clients’ needs help create a sticky solution that your clients will love, and want to return to. This increases your average revenue per account (ARPA) and reduces the dependency on generating new business.
Partnerships enable you to expand your market share
Different markets experience different types of stress during an economic downturn. Depending on the market you cater to, you could be feeling a higher level of strain on budgets and the intent of your clients to do business with you. Your tech partner can introduce you to new markets that have the capital and interest in your product or service to keep your business afloat during a recession.
Partnerships give your business credibility
Partnerships help you gain access to markets you weren’t initially privy to. With an expansion in your product or service offering, you can now extend your business operations to include those markets and consumers that weren’t interested in what you were offering previously. Partner with a reputable company and see how your credibility will increase in your customers’ eyes. You’ll be able to attain better reviews of your business, more satisfied customers, and likely more referrals.
Partnerships let you focus on your core business
Partnerships reduce the time you spend on marketing, sales, and tech development, allowing you to focus on other parts of your business. During a recession, there may be urgent aspects of your business that need attention and a partnership can free up the time you need to attend to them. Further to that, your partner can give you insights and feedback on elements of your offering that will help you beat out your competitors. Things like features you need, bugs to expect, and integration processes will all be laid out for you, paving the way for smooth integration and launch.
Recession-proof your business using partnerships
A recession can hit a business hard. Laying off employees and determining where budgets will go is a difficult decision. With partnerships, you can alleviate some of the stress and assist your business in remaining above water and powering through the storm.
Partnerships can lower your CAC, sales, and marketing budgets, and increase your ARPA. They also have the potential to expand your business and your market share, give your business credibility, put you in front of the right people, and allow you to focus on growth.
By embarking on a partnership with a tech provider, you are setting your business apart from others in the field, and creating a lucrative opportunity for yourself during a time when other businesses are scrambling to survive.
vcita partners with leading organizations that serve SMBs to propel forward a joint vision of empowering SMB digital transformation. To learn more, check out vcita’s partnership program.
