OBSERVATION
Consulting firms often debate whether to apply their business development effort toward building a partnership vs. seeking direct client opportunities. One key benefit of forming a partnership is the ability to expand sales opportunities while sharing marketing and sales costs.
As tempting as it is to form a partnership with the goal to increase revenue while mitigating marketing/sales effort, you also should consider factors that could add frustration and internal cost if there is no alignment between the two companies.
CONSIDER THIS
While no one can predict the success or failure of a new partnership, there are some key considerations when evaluating potential partnerships:
1. Similar Company Values – this may seem nebulous and non-relevant to a business decision; however many business relations falter because one party valued a particular method of conducting business in place of the other party’s preferred value (for example: Party A pursues business sales no matter how the sale is achieved. Party B pursues business sales within ethical and legal parameters).
2. Matching Customer Profile – increasing sales in general is tempting, but if the new customers do not fit within your identified profile, you may not have the skill set to satisfy that new customer base. The result hurts not only your reputation, but also your new partner’s!
3. Balanced Workloads – just because you formed a partnership, you cannot afford to assume the workload to building and maintaining the partnership will be equal among partner companies. There are many instances where one partner ended up doing most of the internal, infrastructure work for the partnership (marketing collateral, sales outreach, IT systems, document management, etc.).
THINGS TO THINK ABOUT
In addition to the above considerations, it is helpful to monitor the amount of business each partner generates for the other. If you or your partner is delivering an unequal and disproportionate amount of the sales opportunities, you both need to look at the numbers and evaluate why this is occurring.
1. How often will you monitor joint/shared sales leads?
Examples:
• Each week
• Each month
• Each quarter
2. In addition to evaluating the raw numbers, what other factors will you examine?
Examples:
• Customer type
• Customer demographic
• Pre-determined criteria for justifying contract is not for other partner
3. In some instances an effective partnership may be based not on equal contribution to the sales effort, but rather by one partner contributing a key capability that the other partner lacks. In such cases, does it make sense to evaluate the quality of the partnership based solely on each partners’ contribution to the sales effort? If not, how can you best evaluate the value and effectiveness of your partnership?
