10 Best New Partnerships Program Tips For Business Development
Partnerships are the lifeblood of most businesses and can provide the greatest long-term growth value for an organization.
Partnerships are the lifeblood of most businesses and can provide the greatest long-term growth value for an organization. The only problem is getting them right, which is typically very difficult because of the complexity of doing a deal. Due to the constantly changing state of the market, complicated revenue models, and the high degree of difficulty in maintaining relationships, forming a partnership that is effective over time can feel impossible to achieve.That’s why we’ve compiled advice from people who know partnerships inside and out at every stage of a company’s lifecycle. Here are tips from 10 seasoned business development and business professionals on their keys to success when creating new partnerships.
1. Focus on the Success of Your Customers
Matt Caputa is the former Director of Channel Sales and Marketing at Hubspot, and he believes “When prospective partners ask about commissions, lead sharing, or white labeling in the first conversation, it’s a pretty good sign that the relationship isn’t going to work.” Oftentimes, when businesses decide to form a partnership together, they forget the end user of each business are the ones who should be benefiting the most. Matt argues that building a system that rewards partners when they make their clients successful is a great way to motivate team members since, at the end of the day, everyone wins when mutual customers are successful.
2. Make Partnerships a Core Competency
William McComb, former VP of Marketing at Johnson & Johnson, believes companies that fail to develop partnerships will die.
“The bottom line: Partnering needs to become a core competency – well-resourced, culturally central, reinforced with appropriate metrics,” argues McComb. You will need a ‘partnering’ team to help identify the skills required, review opportunities, make the big decisions, and drive ‘partnering’ and alliance management as a way of being throughout your organization. Otherwise, your once great capabilities could become great liabilities.”
Nurturing partnerships might just be the only way to adapt in a business that’s constantly changing. Creating a successful partnership is one of the most effective ways to make your company more agile, and bring in new knowledge and opportunities to your organization fast.
3. Prioritize Enthusiasm
As a person in business development, your job is to explore the unknown. Entrepreneur and author Seth Godin thinks you should play into that feeling of excitement that comes from pulling off a blockbuster deal. “The best business development people I’ve ever worked with are able to capture the energy in the room and amplify it. They’ll build on the ideas being presented, not make them smaller,” says Godin. Enthusiasm is contagious, doubly so when you’re in an environment that promotes thinking outside of the box.
4. Ambiguity Can Be An Asset
In marketing and sales, clear communication to your customers is paramount. Whether you’re informing prospective users about a product or service, the clearer your messaging is, the more successful you’ll be. The exact opposite is true in business development. At least that’s what Bernie Brenner, co-founder of TrueCar, believes.
“In BD, the right amount of ambiguity can be your greatest strength,” Brenner says. “Strategic ambiguity is your goal during the BD pitch process and throughout most of the negotiation phase.”
Since BD is all about bringing two separate companies together to create an even greater opportunity, ambiguity is critical by accomplishing two goals: It entices your potential partner to want to learn more, and it protects your BD strategy.
“By withholding specifics in the courting process, it minimizes the possibility of your potential partner to say ‘no,’ and it protects your company from collateral damage should your potential partner go to your competitor. They cannot use your BD strategy against you if they do not have all the details.”
5. Be able to roll with the punches
Scott Pollack, CEO and Founder at Firneo, says the main goal of business development is to “create long-term value for an organization from customers, markets, and relationships.” With that unifying definition in mind, why is it that if you ask a BD person to describe their day-to-day role you’ll hear vastly different descriptions?
“The role of business development changes as a company grows because what is valuable in the long-term changes as the company grows.”
Someone doing BD at a startup versus a more mature company will have an almost completely different job description altogether. The role of business development at a very early stage startup is often focused at the intersection of sales and product development. At growth stage startups, “forming partnerships becomes an attractive option to pursue distribution, product enhancements, or brand equity. The ability to sell other companies on the idea of partnership and do deals that drive scale becomes a go-to arrow in a growth-stage business developer’s quiver,” says Pollack.Regardless of what stage of the company lifecycle you’re in, the role of business development will always be focused on seizing growth opportunities and creating value that persists for the long-term.
6. Keep Scalability Top of Mind
Scalability is the differentiator. It allows a company to use pre-existing sales teams or communities that a partner has developed to reach new audiences,” according to Andrew Dumont, former Director of Business Development at Moz. Typically, BD teams are very small and work through existing partner infrastructures. Dumont says “the art of business development comes in identifying partners that fit that description, while finding a way to provide value to the partner’s end customer and business.” “The function of business development is to work through partners to sell to the end customer, in a scalable way,” continues Dumont. Having fruitful partnerships is a clear-cut way to ensure you’ll create long-term value for years to come.
7. Fully Understand Your Product
According to Matt Wyndowe, former Head of BD at Uber and Facebook, a lot of your internal credibility as a business development person comes from “generating new ideas, and pursuing deals that work with your product and strategy.” The key is to have a deep understanding of the product and market since “the deals you avoid are more important than the deals you do. Remember that every deal you do has opportunity cost and consumes valuable engineering resources.”
8. First Impressions are Important
Perhaps there’s no greater discipline where first impressions matter more than in business development. BD is all about relationship building, and if you can’t get your foot in the door anywhere, you’re going to have a hard road to success. David Lee, Executive Vice President at Samsung, knows a thing or two about how you should go about making the best first impression via email.
“In general, you should assume that the business development partner has (1) very busy people and (2) most likely, little incentive to meet you (unless you are the Startup Du Jour that everyone wants to meet.”
Keeping this in mind, you should try to get an introduction from somebody who has a relationship with the potential partner already. “If this is a big company, you want to limit the number of introductions and meetings to that company,” explains Lee.
“It’s better to wait and come with a meaningful “ask/proposal” than a vague ‘exploratory’ meeting. You can burn yourself out at a big co – they will get sick of you. So avoid that first meeting where there’s really nothing to talk about except a dream deal for you and basically a handout from them.”
Another tip Lee has is to keep your emails short and concise, and should be five sentences at most. The first should have a catchy description of what your company does, and “you should be able to crisply communicate your company/vision in a short sentence – this helps persuade prospective partners, investors, employees, customers, etc.”
9. Know When to Lean On Others
In the world of partnerships, the path isn’t always clear. Sometimes you won’t be able to see the path to revenue immediately or you’re not sure of the long-term value of a particular partnership. At times like this, it’s important to ask for insight from internal stakeholders. Eric Grafstrom, former Director of Business Development at Yahoo, believes you should put pen to paper when trying to problem-solve.
“Write out a short list of the benefits for both sides and refine the list to a point where you are comfortable with reasoning and discussing the points with others. Putting the points on paper (or screen) forces you to crystallize your thinking and when you talk through it with someone it almost always leads to great insight.”
When making big decisions, it’s important to lean on others who have strong, informed opinions to help guide your own thinking.
10. Provide Value, Not Bloat
Jason Cohen, founder of WP Engine, finds that the reason why most partnerships don’t takeoff is because one side of the partnership is usually overselling how much value they can actually provide.
“A much better approach for business development is as follows:How can the smaller company make money for the larger company in the manner that the larger company already makes money? Said another way, how can you grow the larger company in a way that matches their existing business model?”
If you can bring customers to a big company — even a few — rather than milking existing customers for a sliver of revenue, you’re much more likely to execute a deal that genuinely makes both of you a significant amount of money.
Building a Partnerships Program
Now that you know how many industry leaders think about new partnerships programs, it’s time to think about building your own. We’ve compiled a set of steps to help you find the right partnership opportunities as you build out your individual program. Here are the steps you should take to ensure the right partnership for you.
- Clearly define your company goals. Are you a BD executive at an early-stage startup? Moving fast and being agile are usually the most important qualities in this time window. Forming channel partnerships are a good way to experiment quickly with different product offerings while piggy-backing off the built-in trust more well-established brands possess.
- Create a strategy that is executable. After defining what the goal is for your partnership program, it’s important to come up with a strategy that is realistic to implement.
- Partner with a company that fits. It can be easy to get starstruck by a high-profile brand with a huge audience. But if their demographic is mainly tweens and you’re a life insurance company, even if the number of impressions are astronomical, it won't make a difference if the conversions are miniscule. Creating a target customer profile is a good place to start when considering which business you want to partner with.
- Clearly define success parameters. Before you launch your partner program, it’s important to understand what success means so you’re able to adjust accordingly. If you decide to pursue a content partnership, organic traffic and converted leads are probably the most important metrics to consider.
- Evaluate performance and optimize. Once your program is up and running, you should be evaluating performance by looking at the pertinent metrics. After setting up your referral program, you should be seeing an uptick in generated leads and new customers. If not, it’s time to either adjust the program to make it more enticing or partner with a different business altogether.
Whenever you’re setting out to create a new partnerships program, it’s important to listen to the experts who have done it before. Don’t assume that you can blaze a new path until you have built the necessary relationships to be creative and try things that haven’t been done before. First, build a network of potential partners and figure out how you can bring value to their business.
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