What are the benefits of working with partners?
When developing your strategy, consider working with partners to extend your reach. In this context, a partner is a separate legal entity with their own product or service they bring to market. There are many benefits partners can bring to the table. For instance, they offer:
- An ability to reach new or existing customers with unique offerings that provide added value
- More “feet on the street” or more distribution channels to sell your products through
- Increased awareness for offerings
- The ability to offer customers an integrated or joint solution that creates more customer value and improves your marketability
- Brand equity and trust with a broader audience
Determining whether to work with a partner
- Can a partner sell your product or complement your offering without threatening your business and taking away customers?
- How easy or difficult is it to reach and sell to customers? In other words, do you need a partner for an aspect of your business?
- Are your partner’s terms for doing business together mutually beneficial?
- Do you and your partner have company cultures that complement one another?
- How easy or difficult is your product/service to use or consume, complicating the sales cycle and customer support?
Which type of partner are you interested in?
Strategic alliances are formed when two companies who work together can bring more or unique value to their joint customers. Unique offerings may entail a special integration or joint promotion where partners benefit from their products being purchased together. To ensure joint customers receive more value, strategic partners must coordinate their actions closely, which means their organization’s personnel – from finance, marketing, and operations to human resources, facilities, and legal departments – must work together to develop or deliver joint offerings to the market. Typically, these are one-to-one relationships that require more resources and support to be successful.
Channel partners focus on helping you distribute your product to end-users or consumers via retailers, consultants, system integrators, and VARs (value added resellers). Typically, these are one-to-many relationships where your company develops a channel partner program with sales, marketing, technical/customer support, product/service delivery support, and the partner agrees to that offering. The channel partner may or may not add their service before offering it to the customer, but they’ve agreed to abide by the terms offered. There are different types of channel partners – online and offline – with various degrees of ability.
Develop a plan
When working with partners, you’ll need to ‘go to market’ with them and market to them. To start the process, you’ll need a contract that defines:
- How you’ll go to market
- What intellectual property you’ll share
- The recourse if one side is unhappy
- How product and services will be delivered
- How costs or revenues will be split
- The resources each will make available
- Marketing resources available, plus other issues specific to your business
Put it in writing
You should consult an attorney to make sure your contract is well understood and appropriate. With a contract or agreement in place, you’ll be able to extend your reach with your strategic alliance partner or channel partner.