07 Dec CEO Ryan Westwood talks about partnerships in Forbes
Simplus CEO Ryan Westwood wrote a great piece about partnerships for Forbes! Check it out below or at the link.
We’ve all had them. The introductions that felt too good to be true or the strategic partnership that held lots of promise but no pipeline. I’m talking about the business partnership that could have been truly awesome . . . but fell short.
A study by the CMO Council found that 85 percent of business owners believe partnerships are essential for business success, but over half (60 percent) of those favored alliances fail. “It appears that the problem is related to a lack of governance, as only 33 percent of the respondents indicated that they had a formal strategy for partnerships,” says Donovan Neale-May, founder and executive director of The CMO Council. Along with formalizing the partnership with specific exit strategies, roles, strategies for growth, revenue/ownership divisions, etc., it’s important to treat your partner as you would a big customer. “Partners rarely get the same handling, the same care, or the same attention that customers do,” says Neale-May. “And yet, in many cases, partners lead the way to more customers.”
Many years ago, when I started PC Care Support, we thought about employing a direct marketing strategy to compete against BestBuy/Geek Squad, a $44 billion-dollar brand. As a startup, we didn’t have the ability to invest the same amount of marketing dollars, so we looked for potential alliances, with resounding success. What was first born out of necessity for my startup became a strong business model that I still practice today with Simplus. Our partnership with Salesforce provides many benefits, such as enhanced customer reach, lower overhead costs, innovation, and employee development.
So before you give up on the prospect of partnering as a tool to further your business goals, here are five ways to attract the best fit for your business and be the partner everybody wants for their team.
Solve a problem for a partner.
We expand the Salesforce ecosystem by contributing things like domain expertise, customer service, and technology implementation, adding horsepower without adding to their payroll. “Partnerships work out the best when they are made within your own or a similarly related industry,” says Deborah Sweeney, a CEO and Forbes contributor. “One company is able to provide something that the other cannot while still supporting the other partner and bringing in new customers to both sides.” By designing a balance of abilities that counter potential weaknesses, you can contribute your strengths to the business.
Make it easy to partner.
For Simplus, we understood quickly that Salesforce excelled in working with partners, so we started looking at how we could do it better. For instance, Salesforce has created a partner value score that makes it easy to understand where you are as a partner. Based on customer satisfaction, case studies with successful customers, revenue generated for them, and certification level, Salesforce has found a good way to find partner value with this criteria. This model moved growth from zero to 150 employees in 3.5 years.
Initiate the formal partnership agreement.
Knowing that business partners won’t agree on everything, there is one factor that should get a resounding agreement from both parties: a formal agreement. The discussion surrounding a partnership agreement uncovers the best- and worst-case scenarios that your partnership may face down the road. “There should be a description of each partner’s responsibilities and duties so each partner knows what to expect from the other,” says Mark J. Kohler. “Furthermore, there should be predetermined consequences for partners not completing their duties.”
Starting an honest conversation about long-term goals allows your partner to know exactly where you stand. A solid partner dynamic is all about transparency, a full commitment, and total honesty about the partnership infrastructure.
Know what results are important to them
I understood early on that Salesforce was primed to drive annualized contractural value (ACV) and build customer satisfaction. I also knew my company could easily fulfill that need. I made sure our company goals aligned with those of Salesforce. In fact, we made this model a part of our five core metrics on how we track our company, so we could scale faster than the competition.
Build trust with successful execution
During the initial partnering phase, we offer a variety of skills and resources. But none of those promises matter if you don’t deliver. The Wall Street Journal says to “outline your expectations for how you’ll operate your business, and clearly delineate the roles and responsibilities of the partners based on their skills and desires.” This will eliminate turf wars and clearly show employees to whom they should report. For Simplus, this partnership helped us facilitate a 100 to 1 ratio. For every dollar we spent, we would get 100 in pipeline.
That’s an incredible lead source resulting in a $100M pipeline from spending $1M in an alliance that is three years old.
If you are looking for a way to gain a competitive edge while utilizing the benefits of combined efforts, a partnership may be a smart move to position your new business for success. And to secure your role in a robust, profitable business relationship, be the partner you hope to find by offering insightful solutions, proactive infrastructure, a clear vision, and trust.