Long-term sales partnerships are created when each side feels like they got a good deal. Follow these four steps to develop win-win partnerships that are built to last.
No matter what you call them – distributors, resellers, wholesalers, connectors, intermediaries, agents, or marketing partners – sales partners are critical to the growth of your startup.
These partnerships build your credibility and extend your sales reach, as well as enable you to expand into international markets.
Read my blog on the three types of sales partnerships you should develop to speed up your revenue growth.
A win-win partnership is built when both sides feel like they benefit equally from working together.
In this guide, I discuss the key characteristics of win-win partnerships and the four-step process you can follow to ensure you only create partnerships that will be around for the long term.
Characteristics of win-win partnerships
In my 30 years of experience building long-term partnerships, I’ve found that the most successful ones exhibit these two key characteristics.
1. They are connected by a mutual point of interest.
There must be something that connects the two parties beyond the fact they happen to both operate in business.
This connection point may be a common industry, geographic location, or customer network.
For example, if you are selling a B2B SaaS tool to warehouses, your sales partner should have existing connections to warehouses or to a similar SaaS tool in an adjacent industry.
I’m always skeptical of a distributor that sells ‘everything,’ from household cleaning supplies to marketing services.
You simply can’t be ‘everything to everybody.’
Sales partnerships work in the long term when both parties are focused on the same industry or type of products or services.
2. They deliver equal advantages to each partner.
Common benefits in ‘win-win’ partnerships will almost always include a financial upside.
This will come from an increase in sales or delivered via a sale commission or finder’s fees.
In addition, these partnerships should provide additional benefits via a mix of authority, access, or presence in equal measure to both parties.
For example, your partner may give you access to target customers in an underserved market, while you may give your partner the credibility boost that comes from working with your high-profile solution in their industry.
A word of warning: if you feel like you’re getting a better deal than your partner, I can almost guarantee that this will not be a long-term collaboration.
There is no such thing as a long-term ‘one-sided’ relationship.
How to build win-win partnerships
In my experience as a startup mentor, 90% of sales partnerships fail because of poor execution.
To maximize your chances of success, make sure you identify the right type of partner to work with, the goals of the relationship, the ideal structure, and the areas of responsibility.
1. Identify your ideal target partner
Determine what specific parameters – business characteristics or qualities – you would like your target partner to have so it is relevant to your business.
In my work with Logiscool, a coding school for kids, we created a detailed description of their ideal franchise partner to guide their search around the world.
We described their ideal partner’s primary motivation – they targeted franchises who wanted to create a profitable business with social impact – and included a detailed breakdown of the franchisee’s ideal age, level of business experience, skills, and personal characteristics.
Logiscool made it clear that they wanted to work with owner-managers who were involved in sales and day-to-day operations and were physically present and available at their location on weekdays.
Finally, the company outlined the financial resources the franchise partner must have to cover the franchise fee and startup costs, as well as the first 3-6 months of operating expenses.
This targeted partnership approach helped Logiscool to open franchises in 179 locations and 26 countries.
Unfortunately, the ‘perfect partner’ only exists on paper.
Make sure you decide which ideal partner parameters you would consider to be ‘need-to-have’ or non-negotiable, and which ones you would consider to be‘nice to have’.
2. Describe benefits for each partner
Decide the most relevant benefits you expect from the selected partnership, and the benefits your target partners will get from working with you.
It is critical to understand each other’s goals and to make sure they complement one another.
Otherwise, you risk ‘rowing in opposite directions’ and not getting anywhere.
Start by listing the benefits you expect to get from your target partner.
These benefits could include building your sales capability, boosting your credibility, providing access to an important market or location, generating revenue growth, or facilitating your international expansion.
Then, list all the benefits your target partner will receive from a partnership with you.
This may include offering a source of new revenues via commissions or fees, providing a complimentary product to their existing portfolio, gaining access to new customers, or giving them a point of difference versus their competition.
Once you’ve listed all the benefits, write some preliminary goals that outline what success looks like for each party.
Finally, determine what key performance indicators (KPIs) you will use to measure the partnership’s success.
3. Develop your preferred partnership structure
Determine the critical parameters of your preferred partnership structure.
This will cover the basic concept or framework, the deal terms, and the business model.
The partnership concept or framework will most likely fall into one of two categories.
It will be a sustained representation agreement where your sales partner agrees to sell your products or services within an agreed territory or to a pre-determined set of target customers.
Alternatively, it will be a short-term, promotional partnership tied to a specific product or service and limited to a specific time period.
For example, I often partner with startup accelerators or ecosystem players to market the online version of my The Launch Code business development system to B2B tech founders who want to build predictable, recurring revenues for their businesses.
These promotional partnerships usually last for periods of 4-6 weeks.
Next, make sure to determine the partnership business model.
Ask yourself, how will the revenues, costs, or profit be distributed between partners?
To avoid disagreements, apply the agreed business model to various scenarios and make sure that each party understands how they will benefit financially under these conditions.
4. Assign execution responsibilities
In any partnership, the responsibility for execution will be distributed between the two parties.
Make sure each of you knows exactly what they are responsible for and when they are due.
While 80% of execution responsibility clearly falls into one camp or the other, the remaining 20% is usually subject to interpretation and does not obviously ‘belong’ to either partner.
Don’t let these ‘gray areas’ ruin your partnership!
Make sure this 20% of responsibility is assigned to one of the parties.
This will ensure that poor execution does not damage the relationship.
Manage exclusivity: date before you get married
Sales partners will sometimes ask for full or partial exclusivity as a condition of closing a deal.
My advice is to avoid such exclusivity agreements, especially at the start of your business relationship.
In other words, ”date before you get married.”
In the same way that you would not marry the first person that you see when you walk into a crowded bar, don’t tie the knot with your sales partner until you’ve gotten to know each other.
Confirm that you have similar approaches to conducting business, compatible products or services, and a common commitment to building a long-term sustainable business relationship.
Only then should you even consider offering exclusivity – even then, make sure you are absolutely convinced that your sales or distribution partner is the perfect option for you in a given situation.
Apply the CAP and get started!
Now that you know how to build win-win partnerships, get started right away!
Identify the type of partner you be the focus of your first partnership discussions.
Then. apply my Customer Acquisition Process (CAP) to identify companies that match your target partner profile, contact the decision-makers at these companies and take them through you sales process until you arrive at a final decision.
To get an overview of my seven-step outbound sales process, click here.
You’ll be closing win-win partnerships in no time and experiencing the benefits of win-win partnerships on your revenue growth and international expansion.
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