Creating the Partnership: The First Step to Jump-Starting Revenue

Creating the Partnership
Before you pick-up the phone and call a Potential Partner Organization (PPO) you must have a partner plan prepared. This plan should include: partner objectives, your value proposition, tactical approach, partnership timeframes and resources required (see the previous article, Identifying and Validating the Right Partner, for more details).

For the harried, on-the-run entrepreneur or small business owner, a partnership is typically created with one of five different organizations. This article defines the group, the best way to pitch the decision maker, and the pros and cons associated with each particular organization.

On-line Partner Group

Most large companies have on-line partner group established with one main goal in mind: capture as many (new) partners (like your organization) as possible. All you need to do is to go to a web site, fill out information and keep it updated. It is also free! What are the benefits for you? You will most likely receive marketing and sales information, freebees, and, most important, referrals and internal searches. On-line partner groups are the first place product manager will look when he or she needs to make a “build versus buy” decision, or select a firm for corporate marketing purposes (you can be selected to participate in promotional events or meetings with analysts).

This is a low cost and high volume inventorying mechanism for the partner and no cost first step for you. When are the appropriate times to join these groups?
• Your firm is just getting started and has little or no money
• Need technical information and want to get published on list-serves
• Firm desire visibility

Off-line Partner Group

After you have established yourself by registering with the on-line partner group, you might be invited to join the off-line group. This will likely cost money, but you will receive more benefits. How much money you will spend and what you will get in return largely depends on your partner category.

Depending on your partner category, you will able to:
• Join promotions or product kick-off events
• Participate in PR and advertising events (regional, local and national)
• Be invited to executive briefing sessions
• Be part of first to market joint efforts
• Get a dedicated point of contact inside of the partner group

Keep in mind that despite promises from a partner group that you will have an opportunity to discuss your product/technology with product groups and will get an introduction to the right folks at the right time, the reality is that very often a partner group has only few people that manage thousands of partners. For example, one F50 organization wanted to increase amount of partners it registered from 3000 to 15000 in one year but lacked the budget to add staff to manage the increased partner load. You may guess how personal these relationships can be had for tier one and tier two partners.

Product Groups

Product groups are probably the most important group to pitch. The product managers’ goal in life is to drive revenue for a product line, define feature sets, work with the development team on new products and identify the holes in current/future products. If an organization can’t build something internally, the product manager within the product group will be the one tasked with filling these product gaps through partnerships. If your product/technology is great, than you may expect some or all of these outcomes happened: joint development, joint venture, licensing, distribution, investments and even maybe an acquisition.

So, by any means, pitching the product group is must. Unfortunately product managers are very busy. At Fortune 50 companies, product managers typically receive over 400 e-mails and 100 voice mails per day. You must have not only a great product and value proposition but also the patience and persistence of a saint.

Navigating the Maze of a product group

To locate the appropriate person inside of the potential partner you need to be creative and try different approaches:
Direct
• Go to company’s web site. Often you will find an extensive list of senior managers (e.g. Microsoft).
• If it doesn’t work, subscribe to Hoovers on-line (www.hoovers.com). You will have excess to a good list of company’s officers.
• Search through press releases for the product group and find the Product Manager.
Back door
• Go to the web site and send e-mail with a product question. Some CRM solutions go straight to the PM and you will get a direct response. Sneaky.
• Contact sales rep in the field with a complex technical question. He will not able to answer so he will pass it on the product person, who will follow up with you directly.
• Contact PR person and ask for the names. Make sure to frame into strategic partnership context. If this person was helpful, don’t forget to thank him!

How to get response

After you have identified the appropriate person the next step is to get this person respond to you:
• Don’t rely on just email or voice mail. Try both.
• Do try PMs and BMs between 9-11 pm on Sunday. There is a good chance you will get response in 10 minutes.
• Be patient. It can take you several months to a year to get a response.
• Be persistent. Leave one voice mail/e-mail per week.

Conclusion: product groups are difficult to penetrate and will take a lot of time. But
• They have more money.
• They have more influence on the bigger issues such as investment and acquisitions as well as executive exposure.

Corporate Development Group

If your company is looking for investments or wants to be acquired, than the Corporate Development group is your target. Again, be creative, patient and persistent. Large organizations like Intel get 500 pitches per day from M&A firms, F2000 firm receives 100 per day and a mid-size firm with $120M in revenue receives 60 calls per week.

All pitches lands on associate’s desk and if value proposition is good enough, associate will pass it to the director (overall, less than 10 % make it to the decision maker). If director is impressed, he will pass your papers to the product group for the review. If product group determined that your idea or product is unique, they will send it back to the director for future consideration. Only 2 % of original proposals make it to the negotiation phase. If you are have been rejected, don’t expect to be contacted with an explanation why.

When you have successfully navigated the maze and confirmed your partner is interested in your company, you will be ready to take the next step--– negotiating and closing the agreement with your partner.

More information on this topic can be found in Chapter 7 of Navigating the Partnership Maze: Creating Alliances that Work (McGraw-Hill 2002).

*Originally published in Software Association of Oregon Magazine.





Creating the Partnership: The First Step to Jump-Starting Revenue - To learn more about this author, visit Sarah Gerdes's Website.

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