It sounds so easy. “I ensure my products can be promoted by companies with the customer anyway. So I give away a little margin, and as a matter of course, I get new customers.” How many times have you had conversations like this? New collaborations, wherein the initial conversations, the opportunities seem unlimited, and a wide range of possibilities are already immediately on the table. The sky is the limit, at least so it seems. But after the initial introduction, many of the possibilities discussed do not seem to take off anyway.
How to create successful partnerships?
What can you do to ensure that collaboration does come to fruition? It all comes down to the intent and intensity of partnering. In this, we see three possibilities:
- To play the ball
Collaborate because you have complementary services, and it’s best to give each other the ball sometime. We call this the complementary partner model.
A collaboration where you take more of a supplier role. The products or services are embedded in the partner’s portfolio. The partner is acting as a reseller. We call this the vendor model.
- Together to the market
A collaboration in which commerce, portfolios, and joint added value are worked out. We call this the cooperative model.
For these different forms of cooperation, the (partner models), there are good reasons for choosing just one or the other. You choose a form of collaboration that suits you as an organisation. I will list the advantages and disadvantages of each partner model below.
The added value of collaboration
The essence of a collaboration (partnering) is that it provides value for both parties. This is usually in the form of additional revenue and margin, but it can also be in visibility, strengthening your brand, portfolio enrichment, customer satisfaction, and so on. But as we described earlier in our articles on partnering, there are pitfalls in addition to the many benefits.
So while partnering can pay off a lot, it has to suit you. This is because it takes time, money, and attention, which you cannot devote to direct customers. So the business case has to make sense. There also lies immediately the choice of the model you want to enter into in terms of partnering.
1. The complementary model
This is a collaboration in which you act independently but use each other for specific customer demands. Here you can think of a Cloud supplier with customers needing network services. They can then start delivering those with a partner as well.
The success of this model is often very personal. It would help if you had a personal click or favor factor in addition to additional services. That immediately constitutes the risk behind this model.
|– Increase the scoring probability of bids and tenders||– The match in services must deliver actual value for customers|
|– Access to warm new relations||– Collaboration often begins very opportunistically|
|– Requires little investment||– Without attention back and forth, cooperation bleeds to death|
|– Increase brand awareness in your market.||– One-sided ‘love’ lurks in this relationship|
Conclusion: A successful model is if the sum of your services delivers real value to customers and you as organisations want to work together.
2. The Vendor model
Here the question is whether this is a partner or supplier relationship. Once services or products are purchased for resale, or if you deploy them toward customers, then it is partnering. This is the most traditional collaboration model in IT, with examples of huge brands such as HP, Microsoft, Citrix, IBM, Dell, and many others being legion.
The success of this collaboration lies in the relevance of your services and products to your buying partners. Do they already have this in their portfolio, can they realise enough margin, and does it fit their customers’ needs?
|– Expand your offerings in the marketplace||– May create a one-sided relationship|
|– Strengthens your branding||– Your success depends on the commerce of the partners|
|– Creates a virtually larger commercial team||– Requires much time and investment|
Conclusion: This model is proven successful through a clear partner proposition, support, and partner strategy.
3. The cooperative model
This is a collaboration where you work together very intensively. You develop a joint proposition that you also market together. You can think of a software platform that adds value to an infrastructure Cloud proposition, which allows you to add more value than just computing power. Both parties benefit from the additional value and can collaborate toward the market.
The success of this model lies primarily at the beginning of the collaboration. Do you invest time to establish a joint proposition and collaboration?
|– Adds a lot of value for customers and the partners||– Proposition and alignment of collaboration require attention, time and investment|
|– Access to warm new relations||– Access to relationships is not obvious.|
|– You make the most of each other’s strengths and organisations||– One-sided “love” also lurks here, especially with disproportionate proportions in size|
|– Increase brand awareness in your market.||– Your own identity can fade into the background|
|– May initiate merger or acquisition||– Risk of ‘partner lock-in’|
Conclusion: A successful model if you have the same goal in mind, value creation for your customers and your portfolio, and appeal to a new customer base.
The holy grail
Everyone is looking for that holy grail. Let me help you out of that dream immediately: there is no such thing! However, we have seen several forms simultaneously at companies. One model does not exclude the other. And beware, customers do not automatically come to you via your partner when partnering. That may be incidental but indeed not structural.
Our maxims for successful partnering are therefore:
- The collaboration must provide value for both parties, but especially for customers.
- Partnering is not a good intention
- You have to remain in constant dialogue with each other.
Partnering is a conscious choice This requires a strategic approach. As a commercial consulting firm for IT companies, we are happy to share our views and experiences on this, including through our white paper on how to implement partnering successfully. We can also do this for your organisation through a 1st new business scan.
In general, want to learn more about the latest developments in portfolio innovation, marketing, and sales? Please read our other blogs or chat with one of us at Force21