We started Ackroo, a gift card, loyalty and rewards technology and services provider, in 2012, after acquiring a gift card and loyalty company from Vancouver, B.C.
Once acquiring that company, we didn’t stop there. After trial and error and some theories not working out, we’ve since acquired several more companies and partnered with others, and it’s turned out to be the secret to our success.
Here are some reasons why you should consider partnerships and acquisitions when it comes to expanding your software company globally:
Generates a lower cost to acquire customers
In the early years of our business, we had a theory about how we could commercialize and go to market. We thought we would build a direct sales organization by knocking on doors in the U.S. and Canada, hoping someone would want our product. But, let’s face it—it’s expensive to grow organically. You end up spending a lot of money on marketing and sales in a place where you don’t have any presence or footprint, so it goes unnoticed.
At Ackroo, we changed our strategy and decided that partnering with companies that made sense for our brand was the best approach. If you’re trying to sell into big markets that everyone is excited about, it’s key that you do it with a company that already has an established presence. We partnered with or acquired companies already familiar to people in the markets we wanted to enter, so we could extend our reach and get access to new customers and contacts right away.
Helps to expand faster into new markets
By leveraging the partners or the brand that you’re working with, or the companies you acquire, you get a footprint in areas you wouldn’t have otherwise.
Our company’s initial goal was to stabilize in Canada and start growing our business there, but through acquisitions we learned we could grow outside Canada and become profitable at the same time.
Over the last three years we’ve acquired six different competitors and through one of our acquisitions, we acquired some U.S. clients. In doing so, we went from having less than one per cent of our revenue from the U.S. to having seven per cent over the last 12 months.
The U.S. wasn’t a focus of ours, but through that strategic acquisition, it gave us an established presence in a market 10 times the size of Canada and an opportunity to grow beyond our country’s borders.
Teaches you to be nimble and flexible
One of the best decisions Ackroo made over the years is partnering with point-of-sale and payment companies for growth. Through that experience we’ve learned what it takes to be a good partner and what it means to have a good partner. To be a good partner you must make sure you’re bringing value. When we select partners we always think, “Where do we fill the gap that others aren’t?” I also think it’s important to be nimble. At Ackroo, we found that being a smaller company was an advantage because we could adapt. We were a speed boat instead of the Titanic. And since we were a smaller company, we could be responsive to our partners and we brought a fresh approach.
We also did our research and knew which industry to target. For example, we knew that payment companies were being commoditized and they were looking for partners like us, so we just had to be ready to offer them value and say “yes” if they approached us. When companies welcome your calls and you have something compelling to offer, partnership happens fast. And, when you do well with one partner, the next one hears about you, and that partner leads to the third partner, who leads to the fourth.
You’re stronger together
We’ve found that partnerships and acquisitions work because we’re stronger together, especially in business where everyone tries to differentiate, and everyone looks to everyone else as competition. As a software company, we’ve found it’s better to come together and show a breadth of offerings, rather than trying to make it individually.