If you are ready to do what it takes to build a sustainable market ecosystem, you'll want to know the finer points to implement and monitor the program for optimum results. The benefit is in creating a fully leverageable group of partners that allows you to increase market and geographic penetration. This methodology is also quickly and easily scalable.
The company that has the most partners does not necessarily win. To substantiate how unequal partner relationships really are, Software Success a benchmarking, conference and newsletter company for software vendors provides benchmarks based on research it conducted in 1999. The company found that only 50 percent of the vendors surveyed derive any revenue from their partners.
Here is an example of a qualified partner that has translated into little, if any, revenue. An e-business vendor signed several partners to represent it in seminars. However, this vendor did not qualify, train or prepare its partners with the information needed to tell the vendor's story in language appropriate to the audience. One of the partners was known by and credible to the vendor's target customer and offered great reach for them. At little cost to the vendor, this partner was presenting the vendor's product in more than 200 seminars. The information this partner was delivering, however, was inaccurate and reflected poorly on the product such that it actually discouraged prospects from buying the vendor's product. With accurate information specific to the audience and appropriate training and preparation, these partners would have been effective in turning their customer relationships into sales for the vendor.
The cost to recruit and maintain a partner is substantial. For example, one small consulting company with a software product invested $25,000 to develop a sales tool kit as well as recruit and train one strategic partner. This represents a low cost to get started. Initially, a new partner will require more hand-holding to represent you effectively. It can take six months for a partnership to start paying off.
The core activities required to implement an effective market ecosystem for e-business are recruit only the most qualified partners; create a win/win proposition; and prepare partners with training, information and meaningful programs.
Consider the relevance of this relationship to your situation and what will be required to maintain the relationship. Start by setting a goal for the number of relationships that you can adequately support. You may only have the budget to start with two partners or with 10. Rarely are companies effective when they start with 50 or 100 partners.
Focus on those partners with the best fit and, therefore, the greatest potential to produce revenue. Partner-ships with common objectives and shared values will be much more productive while requiring less energy to train and support.
It is crucial to create a win/win situation for the partners. The more you understand the win for the partner, the more likely you will be able to recruit valuable and productive partners. Be clear on how they will benefit from doing what you want them to do and how it fits with their business objectives.
The program should include a clear identification of your expectations as well as what you intend to provide the partner. The best way to document expectations and the win for everyone is to execute a signed agreement that clearly spells out:
Who will do what and when?
- How will each party benefit?
- How will each party receive compensation and from whom?
- Who owns what?
There are three customers that need to be satisfied for the market ecosystem to be successful: you, your partner and your joint target prospect or customer. The right preparation allows you to make this happen and includes three primary components: training, materials/ tools (content) and marketing programs.
In-person preparation is crucial. A new relationship develops best with in-person attention. A new technology requires hands-on or in-person training in order to establish a new comfort zone with your partners. Most partners want and are willing to attend training. If they are not willing, then they probably haven't made the commitment necessary to build a successful partnership.
Partner training serves three purposes: it solidifies the relationship, it motivates them to use and/or promote your technology and it provides them the tools and marketing programs you've made available for them to be effective when meeting with a customer or prospect.
You should give your partners everything they will need to implement your programs, market your products and represent you. Your training program should include presentations, visual aids, attendee materials, an instructor guide and marketing materials. Partners will accomplish more if they do not have to build their own materials. This also creates consistency and assurance that your partners are delivering your message correctly. The training and materials should be geared toward your target customers in language they understand so that your partners don't have to translate and interpret your messages.
The difference between a successful partnership with big returns versus one that produces no revenue is in providing the long-term support to sustain the relationship.
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