AN ECOSYSTEM MODEL WORKS BEST WITH REPEAT BUYERS.

SkyTeam is one of the world’s three major airline alliances. Founded in June 2000, SkyTeam was the last of the three alliances to be formed, the first two being Star Alliance and Oneworld, respectively. Its annual passenger count is 630 million (2019), the second largest of the three major alliances. As of January 2019, SkyTeam consists of 19 carriers from five continents and operates with the slogan “Caring more about you”. It also operates a cargo alliance named SkyTeam Cargo, which partners ten carriers, all of them SkyTeam members. Its centralised management team, SkyTeam Central, is based at the World Trade Center Schiphol Airport on the grounds of Amsterdam Airport Schiphol in Haarlemmermeer, Netherlands.

As you may know, Apple and Samsung are partners. Samsung supports Apple with Gorilla screens for her phones, lenses for her cameras, and also provides the chipset for iPhones 6 and 6s.

In Nigeria, we have some examples of GTBank working in alliances with some Creatives like Fashion and Entertainment brands to collaborate. GTBank provides visibility for them; they reciprocate by ensuring all sub-brands use GTBank accounts only.

If you have traveled via any local flights, it is possible that the snacks and water you consumed were not produced by the airline. It is probably a byproduct of a partnership.

These are only a few examples. This is how ecosystems work. But to further understand this, let me share some profitable rules:

1. An Ecosystem model cannot work where one party in the mix only services ONE TIME buyers. It will fail. The entire parties in the agreement must be sure to provide MULTIPLE PURCHASE POINTS so as to grow the revenue in the agreement. I have a loyalty system I am designing called OCTOPUS CARD. The model aspires to make ENHANCED BENEFITS available for cardholders who are Money Spinners Tribe Members but this system cannot take off if the members are not MANY and if their purchase size is FLAT or LESS THAN A PARTICULAR THRESHOLD. So I must grow my community to hundreds or thousands then expand the service options that makes patronage very encouraging for members. That is how it works. It is what it is.
2. An Ecosystem model may not work if any party does not have the CAPACITY and STRUCTURE to fulfill VOLUMES (and/or VALUE). Imagine the collaboration between Emirates and, say, an airline plying farther zones like Brazil 🇧🇷 or Austria 🇦🇹. Emirates may pull out if the airline heading to Brazil/Austria cannot maintain the consistency of the brand experience that Emirate has delivered. It is just like Arik placing refreshments orders of 1000 packs per day and the catering brand cannot deliver 500 packs. No deal, automatically!!!
3. An Ecosystem Model thrives on EQUITY. It is not a flat 50/50 net income. It is actually EARN TO THE DEGREE THAT YOU INVEST. In fact, in some cases, some parties do not necessarily make profit every time. What some brands enjoy is BRAND VISIBILITY, RECOGNITION and SUBSISTENCE. A classical example of this is FUEL SUPPLY to residential estates or plazas. If you take a good look at the sales of fuel, the per-litre margin is VERY SMALL. It means that unless you have a deal to supply MASSIVE VOLUMES of fuel (petrol or diesel), your profit may be almost zero. So if the ecosystem agreement is between a fuel supplier, an estate developer and residents within an estate, the party that may be on a deficit end may be the fuel supplier. He just may be in that agreement because OVER TIME, with goodwill, more residents can buy and recommend the brand to their loved ones. This is the secret of ECONOMIES OF SCALE (the more the buyers, the lower the cost of supply and the wider the margin). This is only an example.

How can you setup an Ecosystem Model in your business?

1. Build a large tribe of people who have appetite to buy varieties of stuff. You must be very intentional about building a strong, large community. I cannot emphasize this enough.
2. Create a relationship with brands who also have an appetite to do big numbers and sales.
3. Determine VERTICAL and HORIZONTAL products and services that all parties in the agreement can make available to their collective markets (buyers).
4. Determine modalities that can work for LOGISTICS, EFFICIENT SERVICE DELIVERY, HAPPY CUSTOMER EXPERIENCE and SERVICE FULFILLMENT. Don’t let one party doing all the work while other parties are fallowing. No room for “monkey dey work, baboon dey chop”.
5. Agree on COST ELEMENTS and PROFIT SHARING. No party should feel cheated else it won’t last.
6. Sign CONTRACTS!!! NDA’s, NCA’s, SLA’s, etc. (Will you Google those terms? 😜).

This post is from the depth of my interest. I love to build communities, tribes, membership models and ecosystems. If you want me to help your business, just book a session (THE EARLIEST APPOINTMENT CANNOT BE EARLIER THAN 6 WEEKS FROM NOW). Call 0703 595 3367 or email me directly on coachsam@sobcaonline.com

m a k t u b!!!

I am The Octopus.