Build sales partnerships to boost your credibility and access to new customers and markets, so you speed up your revenue growth and international expansion.
Sales partners are called by different names: distributors, resellers, wholesalers, connectors, intermediaries, agents, or marketing partners, to name a few.
No matter what you call them, they are critical to the growth of your startup as they build your credibility and extend your sales reach.
In short, sales partnerships speed up your revenue growth and accelerate your expansion into new markets.
Sales partnerships are critical to your growth
Startups must overcome significant obstacles if they want to boost their revenue growth.
An early-stage business often lacks the necessary sales and marketing resources – the people, time, and money – to be present in relevant markets and gain access to potential customers.
A startup must also overcome a lack of credibility.
It needs to battle the doubt that creeps into the minds of potential customers who don’t want to do business with a company who may not be around in 12-to-18 months.
Sales partnerships help you leverage the authority (credibility or brand awareness), access (industry vertical or customer segment) and presence (market) of third parties to your benefit.
This means you can grow your sales more quickly and accelerate your geographical expansion.
Partners can be distributors, connectors, or agents
There are three categories of potential partnerships you should pursue.
Each one has a its own role in a broader partnership strategy.
These business partners have various names, but I’ve chosen one for each type: distributors, connectors, and agents.
While each type of partner plays in your overall strategy, keep in mind that a single potential partner may fall into more than one of these categories.
Let’s look at each of them in more detail.
1. Distributors
Also known as: resellers, wholesalers
Distributors resell your product or service to the end customer, and often represent complimentary products or services.
For example, a distributor might sell multiple types of medical equipment and services to private hospitals in Northern Europe.
They may own some of these products or services themselves and represent complimentary products or services offered by other companies.
Alternatively, a distributor may integrate your service into a broader offering.
For example, Antavo is a loyalty management platform that helps brands and retailers communicate with their customers more effectively online and in-store by providing hyper-personalized offers and rewards.
The company’s international sales exploded when they formed sales partnerships with selected management consulting companies who incorporated Antavo’s technology into their loyalty programs sold to enterprise customers.
By tapping into the consultant’s credibility and direct access to large buyers, Antavo closed deals with customers they couldn’t have reached on their own.
Depending on a distributor’s business model, they may purchase your products or services in bulk and then resell them at a profit.
Tesco, for example, buys a large amount of Coca-Cola at the wholesale price, and then resells it to their shoppers at a retail price.
This approach enables you to do ‘bulk sales’ of your product or service, selling large quantities but often at a discounted price.
2. Connectors
Also known as: intermediaries, agencies
Connectors are companies or organizations that aggregate a group of similar customers under one roof and represent them to external partners.
For example, connectors can be trade association – e.g., National Association of Automobile Manufacturers – or an agency that represents multiple companies, like an advertising agency does.
Whatever your industry focus, it’s likely there are organizations that represent the collective interest of companies that operate in this industry.
Reach out to these connectors and build a relationship with them so they offer and promote your service to their members.
In my work as a startup mentor, I often collaborate with startup accelerator programs and venture capital firms that have direct relationships with large numbers of B2B technology startups.
I offer these organizations my content and mentoring services in exchange for access to startups who want to generate predictable, recurring revenues and are therefore
ideal customers for The Launch Code business development system.
3. Agents
Also known as: marketing partners
Agents represent your product or service to your target customers and are often appointed in markets where you aren’t physically present.
Agents are very similar to distributors with one important exception. Unlike distributors, which are often just ‘go-between clients’, agents sit on your side of the table when it comes to negotiation with end customers.
They are there to protect your interests and get the best possible deal for your product or service.
You can consider agents as an extension of your internal sales organization, which is why they are often either individuals or smaller sales representation businesses.
One of my clients is D-Tag, a text analytics platform that helps pharmaceutical companies gain valuable consumer insights by analyzing social media conversations in 30+ languages.
They’ve built a highly effective network of pharmaceutical industry consultants – often former executives from the pharma industry – to boost their sales reach and access across German-speaking countries of Europe and the United States.
Managing sales partnerships for success
Developing sales partnerships is the first part of the equation.
The harder part is managing them for success.
Start by following some basic rules of project management.
First, make sure you have an agreed project plan in place so that both partners understand the goals and parameters of the relationship.
Second, hold regular status meetings so each partner can share information, contribute to key decisions, and agree on next steps.
Managing sales partnerships for success, however, requires additional effort and attention.
This is particularly important when you are just ‘one of many’ products and services in your partner’s portfolio and would like to be perceived as a ‘preferred partner’.
1. Create a structured on-boarding process
Ensure that your sales partner is given proper training, so they understand your company’s vision, strategy, and products.
Make sure your partner gets access to all sales materials – presentations, one-pagers, videos, etc. – and gets the updated versions of each on an on-going basis.
These steps not only make your partner feel like they are part of your team but ensure they are properly prepared to sell your service.
2. Suggest packaging concepts
Look for ways to package your product or service with other elements of your partner’s existing portfolio.
You may offer one element of a solution that when combined with another element in their arsenal increases the chances that the end customer will buy your product, as well.
It’s a classic case of 1+1=3.
3. Offer your partner warm leads
This may be counter-intuitive at first, but in fact, passing along warm leads to your sales partner may be the single most effective way of getting the partnership to work.
If you offer existing relationships to your partner and this results in new business, they will recognize the value of building a deeper, longer-term relationship with you.
This tactic raises your level of importance within the partner’s portfolio.
The long-term advantage of such a relationship far outweighs the short-term loss of income due to any commission you may pay to your partner.
4. Keep competition alive
While every sales partner deserves to be treated fairly and with respect, never put yourself in a position where you are beholden to a single partner.
You should very rarely, if ever, enter an exclusive relationship with a sales partner until you are sure this is your best and only option.
Instead, try and keep multiple sales partnerships in place even within one market or geographic area.
This will not only give you more options should one partnership sour, but it will keep your sales partners on their toes and ensure they give you their best efforts.
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You’ll learn how to focus your offer and message, build a structured sales model, and execute based on targets so you can add 3-to-5 enterprise clients to your business each quarter.
