Getting Creative With Strategic Partnerships
- By Christine Beitenhaus
- June 1st, 2011
It all started with office supplies for Colorado State University (CSU). So far this year CSU has signed two major corporate partnerships — a deal with OfficeMax in January and a 10-year partnership with Coca Cola announced this month. These partnerships go beyond traditional corporate sponsorships normally inked with universities (think sponsorships for athletics or homecoming events). CSU’s strategic partnerships with OfficeMax and Coca-Cola not only offer the University the traditional good pricing and services, they go above and beyond to offer creative benefits to the school’s academic mission. We spoke with Amy Parsons, CSU’s VP for Operations, about the creation of these strategic partnerships and the value these deals bring to the University.
The strategic partnerships with OfficeMax and Coca-Cola go beyond traditional sponsorship Parsons explains. “In terms of the partnership, we’ve come together with these entities on the traditional business terms in how we do business with them but also the corporate sponsorship on the athletic side. But what makes these partnerships unique is that we’ve also combined to add value to the academic mission of the university.”
CSU’s first partnership, with OfficeMax, began with an RFP. “We issued a traditional RFP process for office supplies and asked OfficeMax, Staples, Office Depot, and the corporations that provide office supplies to bid on our business so that the university will direct all of its spend on office supplies to one of those companies,” Parsons says. As in a traditional model, they asked for good pricing. “But what we also did was to ask them how else the corporations could add value to the university in terms of bringing in athletic sponsorship or partnering with us on the academic side, offering benefits to our alumnae and to our employees, and all these different categories — much more than just a traditional sponsorship or a purchasing agreement.
“OfficeMax really came to the table,” Parsons adds. OfficeMax partnered CSU on an innovative alumnae program that allows alumnae and friends of the university to purchase, on their own, office supplies at OfficeMax and get a discount. This purchase will also generate a rebate that goes back to the University. “It creates a whole new revenue stream that our alumnae and friends of the university can participate in under the umbrella of the OfficeMax agreement.” The program is mutually beneficial: it generates a revenue stream for CSU and OfficeMax can advertise to alumnae and friends of CSU.
The partnership doesn’t stop at a new alumnae program. Besides great prices on office supply purchases and being a corporate sponsor for CSU’s athletics program, OfficeMax will be sending some of their industry experts to the University as well. “They have one of the industry leaders in supply chain management and they’ve offered to send this person in to guest lecture in our College of Business,” Parsons says. OfficeMax will lend their expertise to help CSU’s students learn the industry, even offering internships and scholarships for students in the College of Business.
“It has all of these tie-ins, direct benefits to our students on the academic side, to our college, to our college, to our alumnae, to our athletics,” Parsons explains about the partnership. “That also helps save us money across the University and on our bottom line because they gave us such great pricing. It’s a lot more than just a corporate sponsorship. We’ve tied into all these different areas.”
CSU set out to find a deal like their partnerships with OfficeMax and Coca-Cola. “We had the idea that we wanted to do a strategic partnership, and we’d thought we’d start with the area of office supplies because that was on our horizon anyway. We thought we would experiment with that RFP process and really challenge the vendors to be creative and to generate new ideas of how they could add value to the academic mission of the institution and really just see what they would come up with.” The resulting deal with OfficeMax was not only a first for CSU but also for the company.
In crafting the RFP process for these deals, CSU did not follow certain guidelines or in the footsteps of other schools. “It’s something we just sort of put together,” Parsons explains, laughing. “So in a traditional RFP, you would issue the RFP and say, ‘This is the amount we spend a year on office supplies, these are the types of supplies that we buy; we’re just interested in the best price and the best service,’ and award the bid on those criteria,” she says. While price was still their number one priority in awarding the contract and service, CSU opened up their offer to consider anything else the companies could bring to the university. “[We] gave them basically a menu and some ideas to chose from if they wanted to sponsor athletics or create an alumnae program or give money for scholarships or internships or things of that nature. But we really left it very open for them to be creative and come to us with what else they may be wiling to provide to us to help the academic mission.” Parsons says CSU “left it open just to see what they would do with it.”
CSU built on their successful deal with OfficeMax when they issued an RFP with Coca-Cola. “We used that model to put together the deal with Coca-Cola, which similarly turned out to be very creative in a way that we have never put together in a deal before.”
At the end of this month CSU’s 10-year contract with Pepsi was coming to a close. As is the normal process, CSU issued an RFP so Coke and Pepsi could compete to with their next contract. As with the OfficeMax deal, CSU asked for traditional pricing and service along with whatever else the companies could offer to CSU. “So, for the companies, they are competing for the business with each other just like they normally would under an RFP process, but they have the opportunity to be much more creative in how they put together their bids for us,” Parsons states. “We decide to give the contract based on all of these different criteria: on the pricing, on the service, on the product, but also on how else they can partner with the University.”
Students at CSU have responded quite positively to these new strategic partnerships, partly because the University includes them in the whole process. “For example, on the committee to choose the new beverage partner, we had the president of our student government sit on the committee, and he was involved from the very beginning — meeting with the vendor — all the way to choosing the ultimate decision of who it goes to.” Parsons includes that letting students ask questions forces the vendors to speak directly to the students about what value the company can bring to the students themselves. She adds, “The students have responded really well both in their involvement in the process and also that the university is really being creative in generating new value to the students and new revenue streams and opportunities.”
With Coca-Cola, those opportunities include $30,000 worth of paid internships for two students to work at the company during the summer. “That’s a direct benefit to our students to go and work to get that career expertise that we wouldn’t otherwise have if we didn’t do this deal.” Coca-Cola is also investing over $100,000 a year in scholarships.
Coca-Cola and its foundation include water and water sustainability as one of their top priorities, and one of CSU’s academic and research strengths is this issue as well. “What we’ve come together on is that the $100,000 in scholarship money is going to be to fund students to study in the area of water sustainability,” Parsons says.
Besides investing in students in terms of scholarship dollars and paid internships, Coca-Cola is investing $40,000 in the Beverage Management Institute, part of CSU’s College of Business that focuses on the beverage industry. Part of the deal includes industry experts from Coca-Cola coming in to lecture in the program and be available to students.
Parsons suggests that other schools interested in forming strategic partnerships similar to CSU’s should structure their RFP process to allow vendors to be creative. “Put as few restrictions and constraints and requirements on the RFP process as possible and allow the vendors to come up with new and creative ways to bring value to the academic mission of the university,” she says. “Challenge the vendors to bring more to the table and allow them to be creative in what they can do to partner on the academic side.”
These strategic partnerships are a new approach to a longstanding tradition of corporate sponsorship, and some companies embrace the challenge while others may not because that’s not part of the way they think or how they’re used to doing business. “But the ones that do understand what we’re going after and are creative and come back with interesting ideas — it really pays dividends I think to the university and to the vendors and creates a great partnership for both,” Parsons concludes.