What is Partnership Strategy?
Many people who enter careers in the world of partnerships and alliances are surprised to find just how little has been written about the field. This is due to a number of factors, but the most prominent one is the rate of change in the world of partnership strategy.
As technology continues to evolve and vendors iterate on the tools used to power sales, marketing, and product organizations, the “right way” to build partnerships and use them to create value is continuously in flux.
This guide is designed to lay out both the prominent and emerging best practices for building a successful partnerships function at your company.
Partnership Strategy Best Practices
Understand Your KPIs
One of the most common mistakes in the world of partnerships is not creating the right Key Performance Indicators (KPIs) for the people on the partnerships team. These are the numbers that define whether the team is succeeding or failing in their objectives. Good KPIs are measurable, achievable, and impactful.
Measurable: It would seem all too obvious to say that your partnership team’s KPI is to generate leads for your sales team. While the number of new leads in your CRM system may seem like it’s easy to measure, don’t forget about attribution. Leads come in from many sources, and making sure you can specifically measure which ones come from partners as opposed to other sources is critical. This is just one example of how lack of measurability creates ambiguous outcomes, leaving company leadership frustrated that they can’t measure ROI and partnership team members frustrated that they’re not receiving credit for their work.
Achievable: KPIs can certainly be ambitious, and depending on your company culture may be easier or harder to achieve 100%. However, they should always be grounded in some foundational understanding of the way things are now, what kind of change is possible, and therefore what outcomes are achievable. Saying you’ll grow your partner-influenced revenue by 10x is only effective as a KPI if you know the inputs that will impact that 10x growth and are also measuring them and think moving them to that degree is possible. Otherwise your team ends up unmotivated and looking ineffective.
Impactful: Sometimes Partner Managers are assigned a KPI of growing the number of companies in their partnership program. When this happens, it’s not uncommon for their KPI to change soon after because the outcome, even when achieved, didn’t actually change the course of the business. If those new partners are unable to drive new leads, don’t have resources to invest in creating positive partnership outcomes, or their market doesn’t overlap with yours, they’re just a ticket to negative ROI.
Avoid Wasting Time
Managing a partnership program is an exercise in picking your battles. Especially as your company grows and more people want to work with you, you will have to make hard decisions about which relationships to invest in, which to nurture, and which to turn away.
“Completion bias” is a cognitive bias that causes your brain to get a sense of satisfaction when you check an item off of a list, and it can often lead people in these roles to focus on smaller tasks like check-in calls, reading partner applications, or toiling in their inbox. This work makes them feel busy and like progress is being made, but it doesn’t mean they are making the highest-leverage use of their time. Far from it: The most important work done in a partnership organization is strategic and involves a small number of your most important relationship and the systems and deals that govern them.
The Power Law curve is in full effect for most companies, meaning that just a handful of high value partners actually represent the vast majority of the value created my partnerships, and the rest are a long tail of smaller contributors that matter in aggregate but aren’t worth your time on a one-off basis. Manage your time along this same Power Law curve to ensure you’re capturing the right amount of value from everyone in your ecosystem.
Make Everyone Else a Hero
One of the things that makes a partnerships or alliances team unique is that your outputs are entirely used to make other people look good. Technology integrations make your product and engineering teams deliver a more delightful product. Lead generation programs make your marketing team more likely to hit their numbers and generate more deal flow. Sales intelligence and co-selling make your sales team more likely to hit their quotas. High profile deals make your CEO look like a mover and shaker.
But what about you? When do you get the glory? Well, the best way to think of it is this: Who cares? Step one in making your partnerships team successful is to make everyone around you look good. The more you help drive the success of those other teams in your organization, the more instrumental you become to the fabric of the company and the more you will be appreciated in the long term.
Moreover, if you double this philosophy with the technique of having strong, measurable KPIs, you will end up with quantitative proof that you have moved the needle for your company and the people in it. Pointing to that progress when you report out to your leadership team will ensure that your work is fully appreciated. But first you have to earn it!
Use Technology to Scale Results
Partnership teams haven’t always been on the receiving end of “cool software.” Antiquated technology categories like traditional PRM Software have certainly helped with the automation, data collection, and measurement of the work done by these teams, but they haven’t actually disrupted the way they create value.
While innovations in Marketing Automation, Customer Success, and Product Management have totally changed the workflows of professionals in those areas over the last 20 years, PRM has failed to create that level of disruption.
However, one emerging category is showing promise in the way it facilitates value creation through partnerships. The category is known as data collaboration software, or sometimes data escrow. These platforms, such as Crossbeam, take advantage of modern APIs and cloud technology to provide a secure, automated way for companies to identify new opportunities to work together.
Data escrow is simple: Each company connects their lists of customers, target accounts, leads, etc, to the system, where it is securely stored. Their partners do the same, and the two companies set up partnership rules that allow them to combine and analyze their data without ever exposing information that isn’t relevant to the partnerships. This allows companies to track things like customer overlap over time, identify cases when their sales teams are selling into the same companies or people at the same time, or when they might have enough critical mass in their shared market to make an investment in a technology integration.
Mentors and Networks: Don’t Do it Alone
While partnerships and alliances are an ever-changing landscape of teams and strategies, that doesn’t mean that there aren’t experts. Quite the contrary, there are leaders in this field with decades of experience that have found tried-and-true playbooks for building out partner programs that matter.
Some organizations that might be of interest for finding and connecting to other partnership professionals include the Association of Strategic Alliance Professionals (ASAP) and the Cloud Software Association (CSA). Probably the easiest place to find your peers is industry trade shows. Go where your ideal partners are going, walk up to their booth, and ask if there’s someone there who can talk about partnerships. They may not be in the booth, but they’re always in the building and, more often than not, they’re willing to talk shop with an up and coming industry peer.
The difference between a good and bad partnership organization often comes down to the people it employs. Taking a disciplined, quantitative approach to this function is critical for creating impactful, attributable success. Using these tactics, you can know you're executing on a partnership strategy that is fundamentally sound and will point you in the direction of your greatest possible success.