Partnerships and Business Development
Business Development is crucial for B2B growth, but as I have discussed before and from many conversations that I have had about the subject with people, there seems to be a real divergence of what the role really is. I wrote about what I believe Business Development is here, so I won’t go into defining it again for this article.
What I do want to discuss here is partnerships and how developing the right ones can help both you and your customers grow and be more successful together.
The Benefits of a Good Partner
One of the key benefits of entering into partnerships with other companies is that it allows your firm to expand its distribution system beyond its current reach. Furthermore, with the aid of your partners, the barriers and costs associated with entering into new markets becomes significantly reduced.
In some industries, the only way that you can reach your customers is to look for a partner to distribute your products.
Apart from these benefits that directly affect your business, developing strategic partnerships with other companies allows you to enjoy a few other benefits. For one, allying your business with an established company can give your company a much-needed boost of credibility and exposure.
Entering into a partnership with another company can also be viewed as a strategic move for a business. For example, if you forge a relationship with an established business, you are essentially preventing a competitor from reaping the aforementioned benefits.
Are You The Right Partner For Me?
Here is where you need to put on that Business Development strategic hat and think about whether the partners you are going to approach are going to be the right ones for your offering. Don’t make the mistake of trying to go after every partner and opportunity because you will waste too much time and too many resources chasing the wrong thing.
Ask yourself a few questions about your potential partners:
- Are their objectives aligned with ours
- Have they done deals like this before
- Will they train their team
- Are they motivated to offer what we have to their existing customers
- Can they service what we have if they need to
This reminds me of the Nespresso story that Alex Osterwalder told us in London when I was there to take his Business Model Canvas workshop a few years ago and how Nespresso, almost closed the division because they chose Joint Venture partners, whose staff were not motivated to offer Nespresso. You can listen to Alex Speak about it here if you want.
Some Partnership types are:
- Working Partnerships
- White Label Partnerships
- Alliances or Joint Venture Partnerships
- Licensing Partnerships
- Channel/ Distribution Partnerships
Are There Any Cons With A Partnership?
Of course, locking yourself into a partnership can lead to a few woes. For instance, when you enter into a partnership with a major industry player, it can hinder the possibility of entering into more useful partnerships with other companies.
Another downside of partnering with a larger market player is that your business may face a substantial amount of challenges including difficult servicing requirements, strict customization and on-boarding.
Finally, a partner that performs relatively well in its niche market may find itself a target for acquisition by other similar or even larger players keen on making a foray into new markets, thus leaving you all alone.Read More