Five baseline considerations for strategic partnerships
For many smaller businesses, the allure of partnering with another complementary service provider is compelling. Small companies want to become bigger companies. When you identify someone that serves the same market as you and offers services that complement what you offer, there is a natural inclination to think about combining resources and efforts, at least to some degree.
Why? Better services for customers. More revenue opportunities by cross-selling to each firm's respective base of customers. Stronger market position and messaging. A larger number of competitive advantages.
While the allure may be great, let me offer some guidelines to consider before you say yes.
1. Clearly answer two questions. What is the purpose for getting together? What is it that each partner wants out of the relationship?
There are many potential answers to these questions, some good and some not so good. A few good answers to these questions include:
• Satisfying previously unmet customer needs through the partnership arrangement.
• Creating mutually beneficial revenue growth for each partner.
• Each partner expands their markets; in essence, 1 + 1 = 3.
2. Always bear in mind the customer's perspective.
Customers, when first introduced to a partnership arrangement, are naturally asking a very simple question, “What do I get out of this?”
A strategic partnership makes sense if the parties provide products, service or support that enhances the offerings to the customer. The customer is almost always operating in a “What's in it for me?” mode.
Define the value of the partnership from that perspective because, frankly, the customer doesn't care what the partners get out of it.
3. Test the partnership with customers and prospects.
Don't assume. Validate.
Talk to customers whom you trust and ask them their perspective on the partnership.
What value would they expect to receive from the partnership's offerings?
Talk to prospective customers. Ask them if the partnership enhances the offerings and makes them more inclined to do business.
4. Take your time.
As in any good relationship, trust is the most important factor to establish. Trust takes time to develop.
Consider working in a trial period with clearly defined parameters.
For example, carve out some test customers who would be willing to be beta sites for the partnership.
Offer the test customers considerations in exchange for their honest and open feedback on their experiences.
What value do they receive from the partnership that they would not have realized otherwise? Is that value worth it? What would they change about the partnership in order to enhance the experience and the results?
5. Communicate and learn.
Establish clarity and methodology around how the partners communicate, both with each other and with the customer. Partnerships directly impact the customer's experience.
If the partners are not clear in how they work together and communicate with each other, the inevitable result is a negative impact for the customer. Don't let the customer get caught in the miscommunications and disagreements of the partners.
Also, partners need to learn everything they can about each other. Great partnerships evolve to the point where each partner can talk about their partner's business as well as they can talk about their own.
Bottom line – The customers are the ultimate determinants of whether a partnership makes sense. Don't let the allure of an internal perspective on the benefits of a partnership overshadow the realities of the marketplace and the customer experience. After all, partnerships are meant to improve things for everyone. Constantly test to make sure that is happening. n
Ken Cook is the co-founder of How to Who, an organization focused on helping people effectively build relationships and building business through those relationships. Learn more at www.howtowho.com
www.howtowho.com.
WBJ Web Partners
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