Tough Talk on Selling in a Down Economy - Part II

By Mike Agron

In the first article of this series of four, published on Feb. 25, I discussed the importance of recognizing that not all partnerships are created equal. It's critical to invest time and resources only into those partnerships that are of high value to your mutual customers and each partner. The types of partnerships that are key to generating new revenue are those "High Performance and High Impact" partnerships, in the top right quadrant in the graphic below. A goal of this series is to help you begin to identify some of the critical success factors for segmenting partnerships, choosing which to invest in and which to drop. This segmentation approach can be used for more than evaluating who your best partners are. You can use it to rank your customers as well.

(Click for larger image)

Teaming with a Purpose: Money on the Table
Let's examine a geospatial partnership in which I was involved that was considered of high value and impact to both partners. My company at that time was working with a large telecommunications customer who would pay us to provide integration services between our geospatial platform and its chosen provider of the business intelligence (BI) platform. The BI provider was outside the geospatial space, so we had some educational work to do to communicate why there was a strong value proposition for integrating our respective platforms. We approached this potential partner and explained that together, we could provide high competitive value to our mutual customer. We told the BI company that upon implementing this solution, our mutual client would expand to more users, which would also drive additional sales of BI licenses for them. For us, it meant we could "sell up" higher in the enterprise value chain, and we could then sell more of our suite of offerings around technology, data and services. Each partner had a stake in "winning," so it made sense to pursue the opportunity.

Not only did the joint offering provide tremendous value to the mutual customer, resulting in greater sales for this particular telecommunications company, but as a result, it quickly set us up to do another deal. This new deal netted into the high six figures of new revenue for each of the partners. We then realized that what we had was a repeatable offering (often referred to as the "holy grail" of partnering) and that we could team up again and again to drive higher value deals. We could then cross-sell and up-sell to our respective customers, as well as use this partnership to go after fresh, new opportunities. Both companies invested time and resources to grow this partnership into a high performing and high impact experience for each of us and our customers.

It's important to keep in mind that the technology issues are often the easy ones to negotiate; it's the complexities surrounding the relationships between individuals from each organization that need the attention. Because human factors play such a pivotal role, partnerships are often fluid. Changes that are part of the business cycle can improve a working partnership, or grind it to a halt. For example, I was once involved in a large global partnership which contained elements that simultaneously placed it in all four of the afore-mentioned quadrants. The relationships for each business unit and global region varied significantly and were very situational.

The reason this partnership got off the ground went beyond one strong customer and pent-up demand. It was blessed by executives of both companies, and was driven by a field sales engagement, with revenue being the major deliverable and metric. Driving revenue is an important distinction in all economies, but money talks - especially in tough times like these. A focused effort by both companies to do their homework ended up creating a go-to-market plan containing these six critical success factors:

  • Partner capabilities
  • Market and competitive segmentation
  • Defined use cases
  • Value propositions
  • Relationship objectives
  • Shared revenue objectives

Key Success Factors
I will focus on the first three critical success factors. The others will be discussed in my next two articles in this series, and I'll also address some ideas for developing a go-to-market partnering plan.

1. Partner capabilities - Spend time on your due diligence to learn about the potential partner's offerings, product roadmaps, markets and clients. Determine if there is a cultural fit between each partner and its business model. This includes many factors, even views on partnering in general. Is partnering viewed as strategic to its revenue and growth goals? For example, if one company values partnering and the other sees it as costing it margin, there will be difficult challenges in setting up the partnership. Another important aspect is to understand each other's sales team and management style. Are salespeople encouraged to partner, or do they view partnering as giving up commissions and control?

2. Market and competitive segmentation - Some key questions need to be asked before pursing an agreement to partner. What market segments should logically be pursued first? Which will offer the lowest hanging fruit to provide some wins and validate the partnership? What's the addressable size of the market(s) you and your partner would go after? Is this to be a local, regional or global partnership? What are the competitive forces that need to be factored?

Moreover, it is necessary to determine possible conflicts. Does the potential partner already have a partnership with your competitor, and if so, are there ways to creatively partner into a fresh new segment? From a joint partnership standpoint, what other alliance would you and your partner end up bumping into on a sales call in a customer's lobby? Is there a real threat that this other alliance has a better solution than you and your partner, or is it merely based on marketing hype?

3. Defined use cases - Once you've addressed the previous two topics, you and your partner need to define the business problems or challenges that your partnership will seek to address. It has to be more than each having cool technology. How are you going to add business value to your customers? Use cases can be "one-offs" or repeatable, and at a minimum are necessary for establishing what is to be done and by whom.

A use case should be short and, like an elevator pitch, it should clearly articulate how the solution will solve a problem. Here's an example: A large commercial real estate firm wants to provide potential clients an easy way to evaluate existing real estate opportunities. Reports should be developed on the fly by non-technical marketing users for presentations to the clients and prospects. With our partner, we can build a Web-based application incorporating mapping, site analysis and a live connection to its available property database. This will enable the marketing representatives to easily navigate the application and create on-demand presentations from their browser in a familiar and comfortable manner.

Defining use cases ensures that each partner is focused on adding value to solving the problem and that the solution can be communicated in a non-technical manner to the customer.

More importantly, as we'll see in the next article, use cases are often the backbone in establishing the value propositions, which become something the market will embrace, as well as the glue that holds the partnership together.

Published Tuesday, April 14th, 2009

Written by Mike Agron

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