Partnership Strategy considerations
When considering whom to partner with, most companies tend to establish formal partnerships with other companies that are in the same industry. It is very common to see a partnership strategy that pairs up a computer hardware and computer software company together. Another example would be a partnership that pairs up a traditional bank with an asset management company. On it's surface, most of these partnerships sound great when we read about them in the newspaper. However, if we define success or failure by revenue produced as a result of the partnerships they are almost all unanimously failures. What happened and where did the vice presidents of partnership that established these partnerships go wrong?
The most important consideration when putting two firms together as a result of a partnership strategy is whether both entities will make money as a result of the partnership. Will they be relevant to one another in terms of the number of potential customers they can introduce to one another and will revenues be produced?
Successful partnerships look like one of the following (3) scenarios:
a) Your product lines or service offering are more compelling and will attract more SMB customers if presented together
b) One partner has a significant presence in the SMB Channel and the other partner has a significant presence in alternate channels (large enterprise, government, retail, etc) and there is a true potential to cross-introduce and cross-sell for both organizations.
c) The customer base has a trusted relationship with a corporation and needs products or services in the prospective partners basket of goods.
They are not typically two companies that happen to be aiming at the same exact customer where both are struggling to do so. Instead, it is much more of a symbiotic relationship where one partner has already captured one segment and the other partner another segment. The handshake establishes that they will introduce each other to their respective treasured customers and that the warm introduction will give them a potential advantage over others marketing to the same smb customer.
Companies have webites with partnership pages where the pages are loaded with hundreds of other company logos. It's a graffiti wall that typically says, "We're better because we have all of these partnerships". The reality is that most of those partners only exist in the form of a logo and don't provide any revenue to the bragging party. These pages are reflective of a partnership strategy that looks to quantity versus quality and are inherently flawed.
Who is to blame? Typically it starts with the chief strategy officer and vp of partnerships. These individuals have to look busy, have to look like they are creating action items, and as a result will sign deals with everyone and anyone that says yes. Instead, the strategy officer should start from scratch and use the above three scenarios to set a proper partnership strategy. The goal of this new partnership strategy should involve companies outside of their industry and most importantly; it should result in meaningful revenue results.
The most important consideration when putting two firms together as a result of a partnership strategy is whether both entities will make money as a result of the partnership. Will they be relevant to one another in terms of the number of potential customers they can introduce to one another and will revenues be produced?
Successful partnerships look like one of the following (3) scenarios:
a) Your product lines or service offering are more compelling and will attract more SMB customers if presented together
b) One partner has a significant presence in the SMB Channel and the other partner has a significant presence in alternate channels (large enterprise, government, retail, etc) and there is a true potential to cross-introduce and cross-sell for both organizations.
c) The customer base has a trusted relationship with a corporation and needs products or services in the prospective partners basket of goods.
They are not typically two companies that happen to be aiming at the same exact customer where both are struggling to do so. Instead, it is much more of a symbiotic relationship where one partner has already captured one segment and the other partner another segment. The handshake establishes that they will introduce each other to their respective treasured customers and that the warm introduction will give them a potential advantage over others marketing to the same smb customer.
Companies have webites with partnership pages where the pages are loaded with hundreds of other company logos. It's a graffiti wall that typically says, "We're better because we have all of these partnerships". The reality is that most of those partners only exist in the form of a logo and don't provide any revenue to the bragging party. These pages are reflective of a partnership strategy that looks to quantity versus quality and are inherently flawed.
Who is to blame? Typically it starts with the chief strategy officer and vp of partnerships. These individuals have to look busy, have to look like they are creating action items, and as a result will sign deals with everyone and anyone that says yes. Instead, the strategy officer should start from scratch and use the above three scenarios to set a proper partnership strategy. The goal of this new partnership strategy should involve companies outside of their industry and most importantly; it should result in meaningful revenue results.
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