Partnerships can undoubtedly be instrumental for growing your organization, scaling and opening up new revenue streams. However, there are ways to distinguish between the partnerships which will actually strengthen your business and those which may not be worth the time and resources to pursue.
In a Live Fireside Chat organized by Talenox titled “Why Building Partnerships Work for Businesses”, participants in the B2B industry break down how to maximize partnerships in order to amplify the funnels of businesses.
When considering which partnership to enter, it’s important to first understand the distinction between the different types of partners in the industry.
Understanding the various types of partnerships available in the market will allow you to unlock the potential of each business relationship fully and strategically fill the gaps of your product for your customers.
This category of partners refers to those who refer leads to your company. They may not provide a service that exactly matches yours and are not offering services competing with your product, making them ideal as partners to foster a symbiotic and mutually beneficial relationship.
This gives you a sense of authority with customers because instead of saying “no, we don’t provide that service”, you can recommend your partner as a reputable option, while this partner does the same and refers your business to their customers.
A channel partnership is an excellent way of opening up new revenue and subscription streams and adding value to your client.
These partners would be those who integrate their product with your offerings, allowing the customer to experience both your product or service and your partner’s as one rather than separate services.
This creates enormous value for your customers by providing a seamless experience and eliminating the need for them to search for separate products independently.
Instead, your product or service can be presented as a bundle or with the add-on of your partner’s software, creating a more complete experience for your customer.
An example of this would be Spenmo, our payment tracking platform, partnering with Xero, an accounting software provider, to truly enhance the customer’s payment process.
Instead of businesses automating payments and separately managing their bookkeeping, the two workflows are combined through the syncing of Spenmo and Xero’s services in a natural and seamless way.
Alliance partnerships are those which may not bring in leads or work for your business, but build credibility and enhance your reputation within your industry.
Examples of these partners would be local banks or authorities who legitimize your business and give customers peace of mind in dealing with your products or services.
Working with reputation enhancers and authorities such as local banks can give you a tremendous leg up as a business and make bureaucratic processes much easier, particularly in the payment industry.
Another possibility with partnerships is to bundle your services with a range of other B2B software providers, offering the customer rewards for using your partners’ services. A rewards partner page serves to boost your partner’s services but also to create an association in the mind of a customer between your brand and other reputable names in the industry.
“With the bar set higher for B2B software vs. B2C players, it’s so important to legitimize your business – particularly when you’re in the payments industry. Trust is so important,” said Mohandass Kalaichelvan, CEO & Founder of Spenmo.
The question when it comes to strategic partnerships is generally who and how many?
This is something each business will need to decide for themselves but essentially, the main considerations to decide on who to partner with should boil down to a few key questions.
Christian Antonno, Strategic Partnerships Manager for Asia at Xero says: “It’s impossible to build everything for your customer as people need to prioritize. As a stop-gap measure, you need to see the alignment you’ll have with this partner in terms of solutions. Does it solve any of your product gaps?”
To make a clear decision about whether to consider a company as a partner, take a step back to assess the current gaps in your product and how well this prospective partner would address the long term.
Unless your business already has an in-house partnership manager, you may have to play the strategic game when it comes to selecting your first few business partners.
There’s only so much that sales and marketing teams can manage in terms of their time and resources, and so choosing partners which add true value to the company is especially important in the early stages of your business.
However, once your business has the resources to scale and enter more partnerships, there can be incredible value in increasing your reach.
Mohandass uses Spenmo as an example by explaining, “If you were able to get 100 partner accounting firms for Spenmo, it’s like you have 100 sales representatives. If you’ve done the education right, the partnering right, and the value proposition is super clear, it’s like having 100 additional sales reps who you don’t actually pay for to recommend your product, expound your business and act as ambassadors.”
Understanding how a partner will contribute to your business is crucial in order to align expectations at the beginning of the working relationship.
Possible considerations would include is this more of a branding effort or a sales generation effort? What is the direct ROI your business will reap from this relationship?
Ironing out the expectations of the partnerships will allow you to set metrics for a successful partnership and provide a clear avenue for assessment further down the line of whether the relationship is fruitful for your business.
One thing to be especially wary of is if there are any risks associated with this partnership. Be sure to do your due diligence in terms of assessing this partner’s background and its reputation in the market.
Conflicts of interest are another area to consider. Would there be any reason this partnership would be unethical?
Beyond the risk of the partnership, be sure to evaluate whether the relationship would be worth the time and effort based on the brand’s reputation. For example, if a prospect is a leader in the industry and has established a strong reputation in the market, that would be a possible reason to seriously consider entering a partnership with them.
A partnership manager who is personable and quickly make friends with others is crucial. People generally do business with people they like.
Similarly, be sure to find partners you can build lasting, professional and amiable working relationships with. If there are conflicts of interest or multiple disagreements at the very beginning of the partnership, the road ahead may not be an easy one.
This may be an obvious one, but it’s important to be discerning about which partnerships your business enters. If a company approaches you with a partnership proposition that you feel will not be productive, be sure to politely decline to save time and resources.
You can even remove yourself from mailing lists for emails from companies that will not be suitable partners.
Daniel Spencer, Head of Business Development and Partnerships at Sleek explains “A lot of partnership propositions can involve a lot of talking, strategizing and determining KPIs. However, a more effective way to start is to start with referring a single lead to your partner and vice versa to see how it works out. If it goes well, you can take it from there and scale.”
Once you have a certain volume of lead sharing with your partner, then you can continue with setting KPIs and marketing strategies – but it isn’t so effective to over-strategize when you’re just getting started.
To save your employees time, be sure to have your partners’ details ready and accessible to share with customers.
Have their contact details and call-to-action (CTA) ready to share with customers in your communications including emails and other points of contact.