Thursday, 20 March 2008

business partner performance

In a channels-led business model, a sales director faces two main challenges. First: recruiting the right partners - and second: investing in successful channels.

Finding and recruiting partners should be the result of a careful market segmentation exercise, finding synergy and alignment of business models. Synergy can be commonly found:
  1. between product manufacturers and service providers, where the partnership delivers combined value that's worthwhile to both parties.
  2. between manufacturers in related but dissimilar market segments. For example, between a systems management company and an analytics company. For this relationship, trust and rapport are essential to avoid conflict and threat.
  3. between system integrator and manufacturer. Consider a Formula 1 car, where the final product is greater than the sum of the individual parts.
  4. between service providers, where benefits of cost or added value can be found in an alliance.
Once a partnership is in place, then investment in the right channels is a critical decision for the sales director. It is imperitive to spend time enabling the successful channels, and to not focus so much energy on the less successful ones. For a clear and effective dialogue, I recommend use of a performance audit that can be applied to each channel. The audit should focus on 4 key areas:
  1. Ability to deliver. Consider the scale of the organisation, the interest in the relationship, the energy invested, and the trust factor. You want to know if your enablement efforts are working, if the partner sales, marketing and management teams understand the partnership value and are communicating it to the market. What's the trust factor in the relationship - is there transparency in your business relationship, or are you sometimes faced with nasty suprises?
  2. Focus on sweetspot. Your market segmentation exercise has identified a particular market in which you've found synergy. How closely does your partner align with the sweetspot? What's their customer base in this segment, and what are their marketing plans to grow in this space?
  3. Territory alignment. As part of a larger geography, what coverage does your partner have with the territory you've got to cover? What language skills do they have, where are they based?
  4. Revenue potential. Consider the result of the partnership. How much revenue will they deliver this quarter, or this year? What's the scale of the organisation? Ultimately your business partnership will flourish or flounder based on the joint revenue you deliver.

Having an open, regular and accountable performance audit with your business partners will encourage a trustworthy relationship, and allow your energy to be focused on key, strategic partners who deliver results.

For further reading on this subject, I recommend:

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