We hear a lot of talk about “Strategic Partnerships” and I wonder if it makes sense to take a plain look at just why they could be valuable. More importantly, however, lets also look at some of the traditional pitfalls and how best to avoid them.

First and foremost, I see two fundamental reasons to form an alliance with a third party:

• To expand my value proposition by packaging the third party’s product into my own
• To expand my sales reach by packaging my value proposition within another’s

In any case, a significant amount of diligence is required in formatting the specifics, however, below are some items that are typical keys to success or failure:

1. Numero Uno: Understand and work within the customer’s Operating Reality.

Being able to see problems and opportunities through the customer’s eyes legitimizes the purpose to establish a relationship with a quality partner.

2. Clearly define your reason to form the partnership.

Your customer or new prospect will be interested and accepting of your partnership only if you demonstrate the value the combined partner resources bring to helping them achieve their objectives. Here are a few good reasons that will position your partnership to the customer:

• As experienced service providers, you share a similar vision to provide enhanced service, products, and technical expertise to meet your evolving needs.
• Each of you has something of comparable value to bring to the partnership – skill sets which complement and enhance each other to deliver your innovative solution.
• The combined resources provide you with a single source, cost-effective solution.
• You have worked together on many projects, but to ensure consistent and uninterrupted service you have formalized a partnership agreement and are committed to being in it for the long haul.
• You share a work ethic and morals.
• You work well together and can demonstrate how you worked with your partner to deliver unique/additional value.

3. Test, test and test.

Make sure this partnership gets pressure tested prior to launch, including all of the administrative items associated with selling, contracting, implementing, billing and most importantly, customer service.

4. I have seen a lot of partnerships fail.

Here are the top handful of reasons:

• The base premise was not fully tested and demand was overestimated
• Nobody owned the partnership on one end…or both. This is a living thing that takes daily care. Treat it as a profit center.
• Sales is not properly motivated. Let’s face it, if sales are not incentivized, your market will not even be aware if its existence!
• Sell to the base, in addition to new clients. If the partnership cannot be leveraged against the base of clients in force today, forget about it.
• It is clear who owns the end user customer from the following perspectives: sales, contract, billing and support.

There are more, but I think this is about 80% of the failure related issues.

The right Strategic partnerships can significantly impact the trajectory of your business. Please call us if you are contemplating the configuration and integration of one or more strategic alliances – we can help!