We Should Partner

No matter your industry, product or service, we’ve stressed the importance of ‘getting out there’ and interacting with your peers.  If you’re persistent, you’ll eventually encounter people and businesses that are complementary to yours. Once the synergies between your businesses become apparent, the conversation will naturally progress, and ultimately lead to someone declaring that the two of you should partner.

What does partnering mean?

The concept of partnering makes sense when it’s clear, or appears to be clear if it’s accretive to both companies – incremental revenue, broader customer reach and a more cohesive solution offering the customers of the ‘partnership.’ … So, We Should Partner?!

Generally, there are four general forms of partnering:

  • REFERRALS – each company refers the other to potential customers.  Sometimes the referrals are paid-for, and sometimes they’re not. It simply depends on the arrangement that the partners deem to be fair and acceptable.
    • BENEFIT – Each company essentially expands its sales capabilities, and provide customers with the ‘right solution.’  Saying, “I can’t, but I know someone who can,” not only provides a solution for the customers; it also builds trust with the customer that your company will always strive to provide the very best product or service to address customer needs.
    • RISKS – the biggest risk in a referral relationship is that the partner that is introduced into the customer relationship doesn’t perform and damages the trust that you have built with your customer.
  • CO-SELLING – companies can work together to co-sell.  This means that the providers lock arms and sell a customer on the strength of an integrated solution to their challenge.  A co-sell relationship either takes the form of each company preserving its own identity or providing a unified solution, ‘flying under one flag.’
    • BENEFIT – This represents an extension of each partner’s sales team and product or services portfolio without investing to build those capabilities internally.
    • RISK – a potential customer may not resonate with what could appear to be a fragmented solution to their problem due to vendor management issues, dispute resolution sand product or service support post-execution. Also, the contributing company can lose its identity, and forgo the opportunity to build its own brand.
  • OUTSOURCE – this is a relationship whereby a partner sells a solution that includes the other’s capabilities in order to present a cohesive, more expansive that your partner can otherwise provide. The prime contractor is responding to a customer need.
    • BENEFIT –  This type of relationship can be viewed as a prime contractor/subcontractor relationship. The prime is responsible for responding to an RFP or otherwise responding to the sales opportunity.  This is a way to extend the sub’s sales capabilities and the prime’s ability to provide the right solution to the customer.
    • RISK –  The sub performs work or provides a service to the prime, which in turn delivers to the customer.  The sub is once-removed from the customer and doesn’t receive any direct feedback, and many times doesn’t know how their product or service is being priced forward. 
  • Teaming agreement – A close cousin of an outsource relationship but focuses on government contracts.  The definition of team has taken on a broader definition and can essentially equate to an outsourcing relationship.
    • BENEFIT / RISK – essentially the same as in an outsource relationship

We should partner

No matter your industry, product or service, we’ve stressed the importance of ‘getting out there’ and interacting with your peers.  If you’re persistent, you’ll eventually encounter people and businesses that are complementary to yours. Once the synergies between your businesses become apparent, the conversation will naturally progress, and ultimately lead to someone declaring that the two of you should partner.

What does partnering mean?

The concept of partnering makes sense when it’s clear, or appears to be clear if it’s accretive to both companies – incremental revenue, broader customer reach and a more cohesive solution offering the customers of the ‘partnership.’

Generally, there are four general forms of partnering:

  • REFERRALS – each company refers the other to potential customers.  Sometimes the referrals are paid-for, and sometimes they’re not. It simply depends on the arrangement that the partners deem to be fair and acceptable.
    • BENEFIT – Each company essentially expands its sales capabilities, and provide customers with the ‘right solution.’  Saying, “I can’t, but I know someone who can,” not only provides a solution for the customers; it also builds trust with the customer that your company will always strive to provide the very best product or service to address customer needs.
    • RISKS – the biggest risk in a referral relationship is that the partner that is introduced into the customer relationship doesn’t perform and damages the trust that you have built with your customer.
  • CO-SELLING – companies can work together to co-sell.  This means that the providers lock arms and sell a customer on the strength of an integrated solution to their challenge.  A co-sell relationship either takes the form of each company preserving its own identity or providing a unified solution, ‘flying under one flag.’
    • BENEFIT – This represents an extension of each partner’s sales team and product or services portfolio without investing to build those capabilities internally.
    • RISK – a potential customer may not resonate with what could appear to be a fragmented solution to their problem due to vendor management issues, dispute resolution sand product or service support post-execution. Also, the contributing company can lose its identity, and forgo the opportunity to build its own brand.
  • OUTSOURCE – this is a relationship whereby a partner sells a solution that includes the other’s capabilities in order to present a cohesive, more expansive that your partner can otherwise provide. The prime contractor is responding to a customer need.
    • BENEFIT –  This type of relationship can be viewed as a prime contractor/subcontractor relationship. The prime is responsible for responding to an RFP or otherwise responding to the sales opportunity.  This is a way to extend the sub’s sales capabilities and the prime’s ability to provide the right solution to the customer.
    • RISK –  The sub performs work or provides a service to the prime, which in turn delivers to the customer.  The sub is once-removed from the customer and doesn’t receive any direct feedback, and many times doesn’t know how their product or service is being priced forward. 
  • Teaming agreement – A close cousin of an outsource relationship but focuses on government contracts.  The definition of team has taken on a broader definition and can essentially equate to an outsourcing relationship.
    • BENEFIT / RISK – essentially the same as in an outsource relationship

The Do’s and Dont’s of partnering

The vast majority of the “let’s partner’ conversations bo absolutely nowhere.  It’s an easy thing to say, but difficult to execute. Here are some Do’s and Dont’s of partnering:

None of these relationships are a legal relationship or enforceable; rather a good faith commitment to collaborate.  But if you do it right, you can extend your salesforce, reach more customers and present a broader and deeper solution set to potential customers.

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