Most software companies have, or would like to have, good strategic partners. Partnering helps software companies offer more complete solutions and find new ways of adding value. Strategic partnerships also can help companies enter new markets, gain access to previously unreachable accounts, expand market presence, diversify service or solution offerings and gain credibility in a new field. Not every strategic partnership is successful, however. Here are rules for forging strategic partnerships that actually result in increased revenue.
Rule 1. Think strategically. Many companies make the mistake of pursuing partnerships simply to put a bunch of corporate logos on their partners Web page. This can result in partnerships that provide no tangible value. Instead, look for partners who actually can help you achieve your goals.
Rule 2. Determine what you bring to the table. Potential partners are going to ask the question: What’s in it for me? You need to articulate clearly the value you bring to the partnership.
Rule 3. Be specific about goals. Before you forge partnerships, quantify in your own business plan what you hope to achieve. For example: Our strategic partnerships will result in net new revenue growth of 50% in a new market. Without goals, you’re almost certain to forge unproductive partnerships.
Rule 4. Specify your criteria. What do you want in a partner? Do you want to strengthen your brand? Do you want market share in specific target markets? Do you need robust channel relationships to move your product to the field? If you know what you need, you’re more likely to pick the right partners.
Rule 5. Systematically identify potential partners. Investigate companies in depth to uncover the universe of potential partners. Brainstorm a comprehensive list of potential partners by looking at competitors’ partner relationships, industry analysts’ viewpoints and relevant industry consortia. Treat the search for potential partners with the same intensity you’d search for potential customers.
Rule 7. Execute due diligence. Evaluate, for each potential partner, the company’s strength and viability, its track record with other partnerships and its current list of competitive partnerships. Score each potential partner against the criteria in a systematic way, and then go after the most likely candidates.
Rule 8. Leverage the big players. For small technology companies, a partnership with a leading player in the software market can have substantial value. For example, if your technology complements a market-leading technology solution, it might be easier to get increased exposure, credibility, new customers and new revenue through a partnership.
The above is based on an article by Chris Prince, an executive client partner at VizQuest Ventures, a sales performance and market development firm that partners with technology product and services companies. For more information, visit www.vizquest.com.