by Bill Sayers
What makes a “good” partnership?
A partnership can be as simple as a handshake or it can be a legal document for a million-dollar deal and everything in between. I grew up in an environment and time when a person’s handshake was a binding agreement and better than any legal contract. What makes any of these partnerships work? In the majority of deals, the real measure of workability is the level of trust and respect between the two parties.
I have been in partnerships that are one sided and not beneficial to my organization. There was no trust and, in fact, this meant the partnership would become adversarial and confrontational. Not surprisingly, these relationships very quickly came apart because without trust a customer is not going to listen to your ideas and more importantly will not share the details of their business.
The partnerships that work have these characteristics: a level of trust, an openness about what is happening in the business, a defined role for each partner, and a review process that allows for resolution of any issues.
You share the details of both businesses and you are invited into the “inner circle” of each other’s business.
Why partner?
This is the most important question in the partnership. What are the benefits, reasons, and profitability for each partner? What are each partner’s strengths and weaknesses? Most importantly, what is the benefit of the partnership to your customer? If your customer sees no benefit how are you going to manage their expectations?
You create a partnership because it will grow business for both sides. A true strategic partnership evolves over many years and at that point you will discover two key things: pricing issues ease and there are very little if any competitive challenges. Why does this happen? Once you get a customer relationship to this level, the customer trusts you and treats you as if you are a member of their board of directors. You provide valued information and service. You are part of your customer’s strategic planning and part of the “inner circle.”
Why are all my customers not trusted partners?
Like any business relationship, it takes a lot of time to create a trusted partnership, and not all your customers will want that level of partnering. The old 80-20 rule kicks in here. Only about 20% of customers will value a trusted partnership. So you need to know who those customers are. You will also want to know which customers “could” become a trusted partner. You then need to focus what you need to do to make that customer a trusted partner.
At the other end of this continuum is your regular customer. Do not lose sight of these clients. They are just as important and just as valued and need to have identified metrics and an overall strategic focus. Some sales reps will lose their perspective on these accounts and either spend far too much time and effort on them or ignore them and then lose valuable opportunities to grow their business.
I have seen reps over the years that have one account that is responsible for all or most of their revenue. While this is a profitable and comfortable situation, in most cases, it is also precarious. What happens if the client goes away? What happens if the market changes? And what are you doing each year to grow and manage the relationship? As long as you know the downside and you manage the relationship with an almost fanatical focus, then it is a profitable way to manage a business or sales territory.
Sayers says: How many partnerships do you have with clients? How solid is the partnership? What are you doing to grow and mature the relationship? What is the risk if you lose the relationship? What are you doing to nurture and grow your regular customers?