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When creating strategic partnerships, it’s essential to first understand yours Why. Is it about growing your existing market, entering a latest market, reducing churn or gaining “trust” from the end buyer by partnering with a well-known brand?
This clarity of purpose drives every thing that follows. I have learned a lot during my journey in various partnerships, from recruiting to cultivating strategic partners. The goal is to sign a contract, but looking at a long-term, mutually helpful relationship that may highlight the capabilities of each parties is a whole other level to consider.
Choosing the perfect strategic partner
When identifying and choosing ideal strategic partners, I focus on fit, mutual value and long-term potential. First, it is extremely necessary to ensure consistency in our missions and goals. A strategic alignment will only flourish when each parties strive for the same vision.
If our values are not aligned, our collaboration will likely be more of a transient transactional relationship than a long-term partnership. For example, I ask myself: Do they sell a complementary solution that makes my solution more powerful? Do our connected solutions make us more “glued” to each other? Are we talking to the same (*15*) on the other side? These questions help us be certain that we are truly moving forward in an effective way, not only through easy business arrangements.
For example, we have successfully established cooperation with the largest brands in the dental equipment distribution industry. As we grew in the dental service organization (DSO) space, customers often asked if we worked with companies like Henry Schein, Darby and Patterson.
By encouraging customers to ask their distributor representative the same query on our behalf, we were able to attract the attention of larger companies. Each latest client win strengthened our presence, ultimately earning us a seat at the table with these industry leaders. This strategy gave us dynamics and established our brand on the market.
Effective information activities
Initiating a partnership is not about throwing cold calls and hoping that something will work out. My approach has at all times been to personalize and provide value instantly. To truly have an effective partnership, you would like to have some sense of market traction or demand for your product. This can make it easier to facilitate and start a conversation.
I also look for partners who bring complementary strengths to the mix – skills or resources that we may not have internally but that may elevate our collective offering. This could also be industry knowledge, market access or unique technology. A partnership thrives when each parties offer something unique that can enhance the other’s business.
The query at all times arises: how much trust and credibility do customers have in them? It’s necessary to assess their repute – are they known for excellent customer experiences and do they receive good feedback from the industry? Their credibility can increase the attractiveness of our solution if integrated.
Negotiating mutually helpful terms
In every partnership, it is necessary to create a win/win scenario. There is a common saying that “a good compromise is when both parties are unhappy.” I consider that working on a partnership agreement is a sign of a potentially poor fit. You should never enter into a partnership where this balance can’t be established. I ensure a transparent exchange of values by presenting the offer of each party. When one side feels they are providing greater than the other, the likelihood of imbalance and resentment will certainly hinder any progress. The ideal approach is to be open during negotiations. I outline our goals, what we’d like and where we could be flexible, encouraging the other party to do the same. Understanding Why behind every term ensures that we create fair, future-proof conditions.
Finally, clear expectations and accountability are essential. Although this is rarely the case, it is natural to assume that mutual warmth will help solve any problems. Entering into formal agreements that include necessary performance criteria ensures that each parties know what is expected of them and helps eliminate subsequent interpretation errors.
What NOT to do when looking for a partner
Above all, avoid forming a company solely for the purpose of expansion if you have not identified any advantages for the other party. Brand names alone are not a sufficient reason. Unless you are also a major player in the industry, you more than likely won’t spend much time considering about how to set you up for success unless you are a part of a publicly announced strategic initiative or put in the work to stay on top of your mind.
Another common mistake is to focus solely on business advantages, ignoring cultural compatibility. A partnership may look great on paper – complementary skills, access to latest markets or mutual advantages – but if work styles and values don’t align, it can be difficult to execute easily. For example, if you differ in your post-sale onboarding experience, customer communication, or even how employees feel about working at your organization, this can create problems that may hinder your success.
Finally, don’t leave things to probability or assume you are on the same page. Discuss and explain technical details and any criteria that could be covered by the contract. Over-communicate if crucial.
Quality at all times outweighs quantity in partnerships
We have many partnerships across the market, currently about 15. I’ve learned that assuming you are the most vital thing to a latest partner and everyone is excited about selling your connected solution is one other recipe for disaster.
Remember that some people feel uncomfortable selling something they do not fully understand and won’t pull your latest tool out of their toolbox. They prefer not to “look stupid” in front of the client. This happens in many relationships until you possibly can call your buddy and coach him until comfort is established.