I was talking to a local CEO who runs an online services business the other day and he asked me about what makes partnerships really work. There are far too many, and he’d experienced this, that take a lot of time and don’t render a lot of results; particularly with channel sales where your own sales team has to be involved. There isn't one formula.
Here’s the gist of what I told him:
1) There are other structures to business alliances—and maybe reseller isn’t the right one. Fit the agreement to the opportunity, and existing business models of each company: Lead referral, OEM, JV, reseller, etc.
2) Focus on process. Line up the abilities of your company and make sure you’re ready; then run a diligent process for each partner; and bring on only high-quality partners in a very public, organized, accountable way.
3) Continue the honeymoon. Everyone’s happy once a signature happens, but you have to keep it going. Have someone that owns the relationship and have them publish a contract summary to everyone, and use it as the guide to driving action on everything that was committed to by both parties. If it was put in the contract, it has to have mattered and must have value to getting a return from the partnership. (Hint: only put things in the contract that matter.)
4) Be aggressive and enthusiastic. I think you can be more aggressive with partners than with customers. You have to be to get action in many cases; and because you’re not selling to them like an end-customer, you can push and persist more emphatically. And in the end, we all know that the squeaky wheel gets greased.
5) Focus on getting meaningful early wins with a champion from the partner company. A big early win can put a lot of support behind the partnership from both organizations. And get the CEO (or someone that’s well-respected on the exec team) to sponsor the partnership—this way you can go back to them and make some big noise about the win to gain more support and focus. Keep building on the early wins.
6) Hire good partners. This means being very selective. It is the quality of the organization and people assigned to your partnership that will have a huge impact on success. If their people aren’t cutting it, figure out how to make a change. Tricky, but possible, and worth the effort.
7) Build a partner-friendly culture, so every functional area of the business is pulling some partner weight.
8) Measure success. Take the time to figure out what margin you’re getting from partner deals compared to direct sales deals. It should be more/better; and knowing the numbers can help drive positive changes to increase volume and margin.
