Tom Levers

The Design Science of Partner Business Development…

Posted in BUSINESS DEVELOPMENT, MARKETING by Tom Levers on February 26, 2009

partner-alliances6With the downturn in the business landscape the challenges for growth and profitability continue. Using partners and improving  existing alliances can:

Reduce marketing and sales costs;
Increase new markets;
Reduce cycle time;
Improve the quality of sales effectiveness.

No matter what the product  or service the key to designing a partner sales and marketing engine is to multiply results.

When Best-of-Breed Vendors have  good Business Partners they successfully grow.  These partnerships can  kick start the efficient cornerstone of new business growth through the creation of cost leadership, differentiation and focus.

With new business models emerging from the impact of the economy, and customer demand of higher value and lower cost solutions; companies must use better organizational best practices to find ways to deliver what customers want. Partner alliances help to turn an organizations isolated competitive challenge into a new business development opportunity.

I started learning this when I worked for one of the first companies in the US to develop a 3 tier computer reseller organization. This company did not build the hardware and it did not build the application software… it made everything work! We allowed brand name hardware vendors to deliver unique niche vertical applications solutions… and make a lot of profit doing it. It was the partner model that was one of the keys to their rapid growth.

Now partner alliances are common. However, the number of partnerships publicly launched  has  recently fallen, typically due to poor execution. Some organizations just slap a partner program together and are not committed to the detailed execution required. Other partner organizations need to cut loose a partner participant because they achieved  their original objective. No matter what organization,  a successful partner organization needs best practices to guide their success. Many alliance organizations have developed a design criteria requirement definition for their strategic business development channel.

partner-strategies1These are only a few of the more important generic design criteria of any Partner Business Development effort:

1. Barriers to Build – Determine when communicating to the customer your value, that it is more economical and easier to achieve by creating an alliance than a direct marketing / sales effort. Typically partner alliances are developed when a partner has a service or domain expertise complementary to the need, or when there is little in-house knowledge of the final complete deliverable of product or service, or there is a high barrier to customer availability. ( i.e. Sometimes it takes too much time, expertise, and money for the prospect to be willing to talk to you, but they will talk to a partner.) Even when you have a strong direct marketing organization or strong service deliverable, multiple touch points around your customer make for a much stronger sales and service organization.

2. Choose the best partner – Look at how a potential partner would fit. Both companies must be able to enjoy short-term and long-term wins from the relationship. That’s the potential of the alliance. But executive and operating resources are the commitment for whether or not the partnership will succeed. Without these commitments, partnerships often fall apart.

3. Create a business plan. Key components include a clear view of the customer value proposition; realistic, shared goals; effective executive sponsor relationships; and investment tied to milestones and successes. Perhaps the most frequent mistake companies make is rushing out an announcement of a new alliance or partnership without having first done the due diligence needed to ensure success.

4. Act on the results – The business plan and alliance goals will determine what should be measured. Establishing up-front goals and mutually agreed-upon metrics for measuring progress, or lack thereof, are two critical success factors to ensure alliances drive top-line revenue for both companies. Track alliances’ success with detailed operational dashboards customized to reflect the specific business goals and metrics of each relationship. Values can include quantifiable data like market share gain and market acceleration, joint revenue/contribution, customer satisfaction, and new solutions launched but also qualitative metrics such as progress in standards efforts of mutual interest.

5. Know when to walk away – Partners must review the alliance in light of the established metrics and determine if it has been successful. Important at this stage is not to see alliance end-of-life as personal or business failure. Rather, this stage may even be a reflection of success – that the partnership has achieved its objectives – or a consequence of changed market conditions or business strategy on the part of one of the partners. It’s important to plan every bit as diligently for alliance end-of-life or transition as for alliance launch. Customers need to be protected. Relationships must be kept professional because there could be another joint opportunity waiting down the road.

6. Build best-in-class capabilities – Identify the skills needed, hiring the right people, building a solid partner management system, and having a strong commitment from the operations management team are all critical. The company has developed an in-house team that can rapidly design a customized curriculum for each new partner to get  up-to-speed on whatever knowledge they need, thus ensuring consistent, quality and service.

Alliance Partners Anticipate  Needs

The Bottom-Line Impact is that when executed correctly this key organizational business strategy delivers customer benefit and the partner organization continues to focus on their core competencies while extending its products and services to new markets.

“Best-of -Breed” solution Partners help to differentiate beyond the “Suite Vendor” or “Acquisition/Agregator” competitors.  The customer value that a high quality “Best-of-Breed” vendor delivers in focus, domain dicpline and customer commitment over the many “broad-brush” organizations privides depth that it can not deliver alone. Instead of the customer going out and trying to fit various solution pieces together, the well executed alliance partner organization uses it’s multiple stake holders to anticipate their customer needs better, resulting in increased sales and customer satisfaction.