Today the idea of strategic partner alliances is a noticeable business trend across every category. The idea is simple: creating more work for everyone involved than they could create solely themselves. Microsoft and Hewlett Packard do it with IT resellers, and meeting planners do it with other planners and their suppliers.
These strategic partnerships take many forms, from informal cross-referrals, to formal corporations. Fundamentally, each partner brings a unique set of core competencies to the table that fill in areas where other partners may be lacking, expanding everyone’s ability to reach more customers and handle more diverse projects seamlessly.
These partnerships are generally more flexible and responsive than companies that outsource while presenting a pretense that the outsourced entity is “on staff.” Partnerships also eliminate the risk and overhead involved in hiring full-time employees that depend on a certain volume of work to turn a profit.
However, a single source for managing a project turnkey remains attractive for busy clients. Additionally, depending on the cohesiveness of the partnership, when work does come in, it can be challenging to determine which partner takes ownership or which project gets priority.
In fact, many partnerships don’t market themselves as partnerships at all. Instead, they have a network of “go-to” partners and resources when the opportunity arises. This approach can keep the true power of partnership (expanding the customer base exponentially) severely under utilized. When several entities decide partnership will help them grown more effectively than the solo track, there are several things they should definitely do to get the most out of this approach:
- Be completely clear about why the alliance was formed. Then articulate that purpose as a selling strength in anything the customer sees, from proposals to websites.
- Don’t partner with anyone that competes too directly for the same business unless you establish ground rules in writing. Do this for the sake of harmony among the partners and clarity for your customers. Many partnerships have this awkward overlap and neglect to get agreement from the onset. The result, more often than not, is that someone winds up pursuing a project the other partner thought was theirs, the partnership ends with burned bridges, and lost connections that must be replaced elsewhere.
- For each project, have one, clear point of contact. That person and company is the one with whom customers can get billing, resolve challenges or issues, communicate changes or needs. If too many partners are involved, customers get confused. Poor communication will undermine even the simplest project. Some may argue that this is a process issue, but it is a brand identity issue as well, since every contact with a customer leaves an impression of your brand.
- Believe it or not, whether you brand a partnership with a name, a logo or several partner logos is of only minor importance. If the partners are eschewing their own private brands to come under a single collective brand, a unique identity will be necessary, but it begs the question whether the entities would be better served forming an LLC or other corporation instead of a loose alliance.
- Lastly, be clear on how partners are reimbursed and how projects are prioritized, especially if partners are continuing their separate businesses in parallel with the work a strategic partnership adds. Unlike years past, most clients could care less how fees are disbursed, so long as they believe they’re receiving competitive value for their dollar. However, how the fees are structured affects your go-to-market approach and must be thought out in advance.
Partnership is a new normal approach to how business gets done. That doesn’t mean it’s right for everyone. For true success, enter into partnerships with careful consideration and clear direction.