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08/09/11

Key stakeholders in a partnership process

In Strategic Selling, Rob Miller and Stephen Heiman define a 'complex sale' as one in which "several people must give their approval before the sale can take place."

These people play roles in the buying process such as guiding the seller and providing information ('Coach/Influencer'), screen possible suppliers and make recommendations ('Technical Buyer'), make judgments about the impact of your product or service on their job performance ('User Buyer'), and give final approval to buy ('Economic Buyer').

In some of my recent work with startups trying to sell through partnerships it struck me that there are roles in the partnership process that are comparable but different in important ways. By selling through partnerships, I mean convincing another organisation to use its resources to sell your product or service to its customers, and sharing the revenue in some way.

For instance, if your product is an email marketing tool for small businesses you may want to sign up a network of resellers to distribute it to their existing network of customers rather than trying to sell to each small business individually.

Signing off a partnership typically does not involve any money changing hands, so there's no 'Economic Buyer' whose budget you need to access. Similarly, there's no 'User Buyer', because the partner is not the one who will use your product.

However, there will be 'Technical Buyers', who will assess whether your product or service actually works, whether it fits in with the rest of the portfolio, and whether your company fits the right profile for their company to work with. There will also be a 'Coach/Influencer' role, to guide you through your potential partner's organisation and politics. It is typically the Coach/Influencer role that you initially have to convince that the partnership opportunity is worth exploring.

In place of the 'User Buyer' I suggest that an important role in any partnership discussion is Sales. It will be the sales team that is responsible for answering questions such as:

  • Which customers will we target first?

  • How will we engage them?

  • How will the sales team be incentivised for selling your product or service?

  • What support will they need from marketing and who will provide it?

In place of the 'Economic Buyer' I suggest the key equivalent is the 'Project Lead', who will typically be an executive in your potential partner's organisation, responsible for answering questions such as:

  • What is the commercial model for the partnership?

  • Who will be involved in overseeing the ongoing success of the partnership?

  • What are the key metrics for the success of the partnership?

  • At what point will the partnership be re-evaluated?

The roles may overlap and some individuals may play several roles during your negotation.

To summarise, there are four key roles that you need to involve before you can feel comfortable signing up a new partner for your business:

  • Project Lead – for commercials, metrics, and management

  • Sales – for targets, sales strategy, incentive plans, and marketing support

  • Technical – for product assessment, compatibility, and legals

  • Coach/Influencer – for validating market size and value proposition, and helping you navigate the rest of the organisation

Posted by Paul Higgins on September 8, 2011 at 1:51 pm in Blog, Partnering, Sales | | Comments (3) | Trackback (0)

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  • http://www.speedmentorcentral.co.uk Lorraine A

    Paul, this is a great post. I find it very helpful the way you have translated the sales roles into those required for partnership arrangements. I have previously secured a number of partnership arrangements and where one or two have failed I wonder if perhaps in part that was because I didn’t have all those roles in place. I’m in the process of securing what I think will be a key partnership in my current business so this will now be incredibly helpful.
    The only other comment I would add is that all these roles are very ‘technical’ in nature (metrics, strategy, market size etc.) and quite right too, but I would also say that if at the end of all this anaylsis it still ‘doesn’t feel quite right’ then don’t ignore that feeling because chances are it’s there for a very good reason. It could be the undoing of the partnership at some point during the relationship, causing damage to both sides. It demonstrates as much strength walking away from a potential partnership as it does securing one.

  • http://profile.typepad.com/paulhiggins Paul Higgins

    Hi Lorraine,
    Thanks for commenting – I’m glad you find it useful. Yes I think you’re right; the relationship side is probably the most important factor in the whole negotiation and it’s not covered here.
    I guess the relationship side comes down to a phrase I always hear – ‘cultural fit’ – which I suppose is basically whether you actually like the idea of working with the other party.
    Some people might say that if the commercials are strong enough then it doesn’t matter whether you would go for a drink with a reseller/partner. Maybe it depends on how close the relationship would have to be on the scale of licensing partner (not close at all) through to full merger (very close indeed).
    What do you think?

  • http://www.speedmentorcentral.co.uk Lorraine A

    Yes, I think the phrase ‘cultural fit’ is an appropriate one but it’s unpacking that in terms of what it means that really counts. If you don’t like the idea of working with the other party then try to work out what that’s all about and whether it’s something that could be worked through. This of course relies on the big ‘t’ word – TRUST. Do you feel you can Trust them to deliver/keep to the agreement/be authentic (add/delete as you wish) and for that you have to Trust your instincts.
    You make a good point of course that for some relationships ‘closeness’ as such doesn’t really figure that high, but Trust will always figure. In my experience some of the best partnership relationships I’ve had HAVE been the ones where I’ve shared the odd glass of wine or two, but maybe that says more about me than it does about the actual process!

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