Partnership Pitfalls to Avoid

Everyone wants to become your partner to increase your revenue using the latest gadgets or “secret weapons.”

Too often, we get into a “partner conversation” that appears to be an excellent sales channel. But it turns out to be one-way: you find sales leads and business opportunities while your partner is making the money.

What you make, partnershWhatever alliances or —strategic networks, they are nothing more than —e two companies working together to find ways of leveraging each other’s product and/or service.

Typic products: The goal is to service new revenue streams and market entry points. The word “partner” is rarely used to describe someone who shares the same business ethics, visions, and objectives as you.

A “partnership” benefits both parties who are looking for new business and revenue opportunities. Many companies forget to cultivate the relationship with their partners and create opportunities for both parties.

Think about these things before you jump into the search for your next partnership:

1. Look for areas where resources are lacking or could be in the future due to market trends and shifts in supply-and-demand needs. Find out where you lack resources or will be lacking them in the future because of market trends and changes in demand-supply needs. Speak to colleagues and department heads regarding their need for new ideas and creativity. Ask your leaders which market opportunities and initiatives they would like to champion and pursue in the short- and long term. Ask your sales and marketing team what your customers think about your products, services, processes, expertise, etc. Rule of thumb: Do not decide what or who would make a great partner in a vacuum. To be successful, partner relationships require corporate support.

2. Consider the value of your existing partnerships. Please find out how they fit in with your company and what you offer. Then, determine if there are any gaps in the solution where you may need another partner. Examine your past and current activities with existing partners to determine who truly makes a difference versus who’s just a name in a press release. Rule of thumb: More partnerships may not always be the best option. These partnerships could lead to increased management problems and less results. Focus on a small group of people that you can easily see and clearly define their roles and goals within your organization.

3. Take the temperature of the weather. You can ask around in your business and organization network to find out if anyone knows of a company that is interested in partnering. If your business already relies on other companies to complement its services, consider whether you can improve and strengthen the relationship with a defined structure and measurement. Rule of thumb: Be cautious of “friends and families” networks. Business leaders or division managers often work with people they know because they have a friendly relationship and can get a great price. The partnership may be beneficial to the person with the personal connection, but it is not necessarily good for the corporation. Selecting partners should be based on a variety of criteria, including market reputation, financial stability, longevity, cultural cohesion, and similarity.

True partner relationships will provide you with the flexibility, confidence, and expertise needed to achieve mutually beneficial success. Why think this way when combining companies is not easy? Partner relationships are critical for the survival and success of any business if they’re approached strategically and with a commitment from your leadership.

When you are identifying and interviewing representatives of your potential partners, you need to consider the following:

1. Are they a business with the same values and ethics as you? How committed are they to making sure that everyone follows their way of thinking and values?

What do their partners think about their relationship with their company? What are the results that they have? Have they seen that reach new levels of success?

3. Are there written agreeme?ts with partners or verbal agreements?

4. What are they willing to do to start the process? Are they open to it?

5. Do they feel comfortable sharing information about their clients and partners so that you can understand where your offering fits in strategically?

6. Does the person have a plan to exit the relationship if it doesn’t work out as you had hoped? How easy is it for you to leave the relationship if there is an “exit plan”?

7. Does the company have a relationship or alliance manager (or champion) who is dedicated to helping you achieve your mutual and individual goals through partnership?

8. Are you able to demonstrate leadership from your own company as well as theirs?

9. Are they able to confidently state their top goals for forming partnerships?

10. Are there any funds in the budgets for marketing and sales that can be set aside to support budgeting programs and activities?

11. Do they want to work with you in building a relationship that creates a mutually beneficial relationship? Do they participate in discussions and ideas for partnering?

12. Do you or your partner have a system for transferring leads? Are you both using documentation such as a Memorandum Of Understanding, Lead Profiling Form, Partner Relationship Plan, or Template to create a process that is well integrated into your infrastructure?

Companies are using shared resources and expertise to create new products, gain greater economies, and access new technologies and markets.

Chances are, if a company claims to “do it all,” it doesn’t. It has partners who provide the pieces of the whole, so it does not have to turn potential customers away because it lacks the required products or services. It’s not wrong to do this, but it is also important to be upfront about your core abilities and skills.

We found out that business leaders prefer companies that are transparent about their strengths and weaknesses. Where they lack expertise, they’re also open about their partners. Leaders like to hear that you work closely with your partner, Company A, to provide specific expertise.

You’re probably excited to tell your clients or prospects how many wonderful partner relationships you have. Caution! It is not enough to have many relationships around the globe. The strength and depth of your alliances is what makes for a seamless, unique solution.

It takes time and resources to find, formulate, nurture, strengthen, and cultivate partner relationships.

Before you rush to accept every partner offer that comes your way, think first, plan second, be strategic, and always do due diligence.

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