The bottom line in all things business, is delivering effectively, delivering and exceeding the ultimate customers’ expectations. Learning what works can be highly expensive when we have to backtrack and go again in a different route. Strategic Partnerships can deliver great success when it works, it can be enormously frustrating, disappointing and expensive when it doesn’t.
A key part of what we do in Maidsfield Associates is to focus on matching our clients’ business objectives to suitable partners in the chosen target markets. As defined in Maidsfield’s Corporate Partnering Process we review seven criteria in evaluating partner-fit and develop an understanding of the potential partners business to see how they could work together with our client to meet the market opportunities.
So many Strategic Partnerships fail because of the most obvious of reasons, in hindsight:
1. The partner’s sales people sold their own product before yours, because it was easier to sell, they met their targets easier and made more commissions not focussing on selling your product.
2. The partner company’s management hadn’t taken on board the full opportunity to grow a new business area and wasn’t fully committed. Things slowly died away and eventually people faced reality.
3. The partnering plan didn’t go much further than a good idea and good story press release. It helped the profile of your business in your existing proven markets and possibly your investors but it didn’t produce revenue.
4. Your partnership was based on an initial opportunity identified by the partner, and that’s great, but it was not their core business area and they simple seized an opportunity that presented itself. They were ill equipped or not interested in pushing further. So be aware of your investment time in once-off opportunities with partner companies that approach you.
5. There was too much effort in getting the partner up to speed in selling your solution and their expectations of your pre-sales department were excessive. They probably wanted you to do all the work and they get the sale. They weren’t doing their share. You expected them to start selling immediately and transfer the cash to you on a monthly basis. The expectations on both sides were just not right from the start.
The real cost in getting it wrong is opportunity cost. Basically the lost time and opportunities in the time spent working on something that doesn’t produce. You need to gain an understanding of the target market through a “Market EcoSystem and Trends” summary analysis, identify your potentials, rank your targets, make your decisions and then follow up.
Watch out for part 2 with what it means to get Strategic Partnerships right.
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