A partnership of equals

In my conversations with smaller product companies the issue of finding partners or building a channel often comes up. There are several excellent reasons to tie up for eg.:

1. Increase your reach - more sales "feet on the street" & on-site customer support

2. Access to the partner's existing customer base

3. Ease of payments & certain financial transactions

4. More predictablity in sales

5. Helping give a fillip to Q end or Y end nos.

It should come as no surprise, however, that signing a partnership with great fan fare is not a guarantee to success. Partnerships often kick-off with a few opportunities that crop up because of the initial combined market outreach efforts but in a depressingly large number of cases the partner then seems to lose interest over time & ends up becoming just another name & contract gathering dust in the partner file. Sound familiar ?

My thoery is that we often approach a prospective partner based on our assessment of what the partnership can do for us but we sometimes neglect the flip side of that story - what's in it for them ? The single biggest reason a partner signs up for is to make money. Leaving aside "exclusive" arrangements in most cases when you consider the amount of sales that can be expected from a single specific partner from a single specific region the problem becomes apparent. The partner very quickly cottons on to the fact that with the smaller companies while the per deal margin percentages could look attractive the top line may not always be too flash. How can you compete for mindspace with the other products in the portfolio of the partner that may be giving them more sales on a more regular basis ?

The good news is that even if you are not the product that will drive the top line of the partner there are still several other good reasons for them to value a relationship with you. The key is to clearly identify the reason the partner needs you for & then ensure that you serve the partner fully in that regard. Let me focus on what some of these reasons could be :

1. Your product fills a hole in their portfolio - the product in itself may not sell that much but the fact that they have a more complete portfolio may help them make more sales overall. Conversely they may be losing deals now due to an incomplete set of offerings & they need insurance against that.

2. They believe that they can sell your product for very little incremental effort or if they can be convinced that they may be leaving money on the table. For example someone who sells computer hardware would be favorably disposed to carry desktop software as the bundle could be sold relatively easily.

3. There may be some PR value in being associated with your product - this is most often the case when the company itself is viewed as a pioneer even if this may be in some other field or if the product represents some kind of a technological advance.

4. Opportunity exists for "cross pollination" between your customer list & the partner's list. Just as you get access to the partner's customer base the partner could also benefit from your customer base & the opportunity for growth through synergy is a powerful motivator.

5. Personal relationships are sometimes undervalued - partners tend to work well with people they get along with. My advice is always to be the company (or group or person) that it's easy to work with. More often than not that removes the extra bit of friction holding things back.

I will come back to how to motivate, manage & run a profitable partnership channel in posts to follow but in closing this one let me make the obvious point that the cornerstone to business partnerships is a judicious mix of enlightened self interest & due consideration to the partner's needs - a partnership of equals is likely to progress further than a lopsided one.