Creating revenue-generating partnerships that work

When I describe the feature to most non-sales people and a handful of actual sales people, the primary objection that comes up is, "Will people share contact information?"

The answer is a qualified, Yes.

I know because I’ve done it successfully.  And I was doing it without one key component which we believe is essential for a company trying to develop an Allyforce.

First, why will they share?

By making the value proposition clear and selecting good, quality sales people.  Almost all of the sales reps I have tried to share leads with, except for one, was more than willing to reciprocate.  Why? 

In part because I made sure that I knew companies that they wanted, and offered to help them first to get the ball rolling.  We know that just because we have a contact that’s not going to lead to a sale.

But faced with the option of dialing into the receptionist or trying to scour contact databases which may be out of date, it is much easier and reliable.

Second, sharing is a basis for building social currency.  It is the social currency among sales reps, in many ways.  Good sales reps know that building social currency is valuable and seek to maintain a balance.  Yes, they will in the end be looking for names that help them, but they know that working with the right partners, that kind of cooperation is a winner.

What helps encouraging successful sharing?

Management buy-in.  In the end, sales people do get guidance from management.  If management says that it makes sense and can paint a clear picture for how and why it will work, and also has a way to make basic metrics, it’s easier for sales people to comply.

A potential hurdle appears if the task at hand is also too bureaucratic, however.

Yes, sales people will still fill out forecasts and the CRM tool — although those activities don’t help to generate leads or opportunities and are very paperwork intensive.  So while there can be alot of resistance, if a company can establish ways to reduce that friction of exchanging leads while also being able to get basic metrics, it becomes a win for all parties.

Management support + simplicity + metrics + mindset of social currency = adaoption and success!

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One of the areas which I’ve noticed is the downfall for many B2B Alliances is consistency and metrics.  This isn’t the answer to all the lead-generation problems.  What it does is provide:

• contact — an update to date contact with information
• context — typically the sales person will know something about the company or contact
• connection — ideally, but not always, the sales person will have a connection with the company

Having these does not guarantee a qualified opportunities.  It still takes getting as many of these as possible.  But the alternative?

• using outdated lists with bad contact information and no idea where the person is on the decision-process
• limiting your scope of targets
• relying on other lead generation activities which either generate nothing or are non-existent

But both sides need to work on it.  And one important component of that is to have metrics.

These don’t need to be complicated.  It basically breaks down into two primary numbers (from a manager’s perspective):

• how many contacts have I received from an Ally?
• how many contacts have I been giving to an Ally?

You could get more granular, but these are the two primary numbers.  Why?  Because as long as these two numbers are relatively equal and growing, you know you are getting transactions.  Something is happening between your reps and the reps of your allies.

But what if they are just gaming me?

Well, let’s talk more about that later, but one key element to successful implementation is to have easy, readily sharable, real-time metrics on activity that does NOT impose more bureaucracy on your field reps or you.

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How long does it take to find the right person, the right contact, at the right company?

If you do the math in terms of the number of targetable companies, and the number of contacts a sales rep can adequately touch in a quarter, what percentage of the addressable market are you effectively reaching?

This may sound like a marketing question, but for many companies, they expect lead generation to come from sales reps.  And their approach is to select a subset of potential targets and try to find the right person before the competition does.

Nothing hurts more than reaching a prospect just after they’ve made a decision with a competitor.  It’s painful, and it’s happening more often.

So what is your time to prospect?

One of the benefits of leveraging an effective Allyforce is that you are putting more sales-focused feet on the street to ferret out potential prospects and getting the right person to talk to.  Yes, with all the tools like LinkedIn and Facebook, there are more ways to get information, but still — imagine if your Allyforce reps are doing the same and uncovering new opportunites and contacts that you are sharing.

You could be potentially doubling the numbers of feet on the street.

Because time-to-prospect — which is  much more granular and sales-focused that just time-to-market — matters, one of the only leverageable ways to do it is through an Allyforce.

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Building an Allyforce, both in principle and in execution, can work for a range of companies.  The primary criteria are:

• Are sales conducted by an individual person knowing the right person to connect with?
• Is finding the right person or right company a large part of the challenge?
• Do you have complimentary, non-competing solutions in the market who want to work with you?

So, for example, someone who sold to hospitals and there are only 5 hospitals in the entire area and the only person who could buy was the head of surgery would not benefit.  They know exactly which accounts to call, and there aren’t many of them.  They know the exact person within the organization to reach and already know the name and title.

Whether you were a big company or a small company in that scenario wouldn’t matter.

Let’s take a look at how big, medium-sized, and individuals can benefit from this approach and mindset.

The individual targeting individuals

If you are a chiropractor or a wedding planner, you might not thinking of proactively reaching out to people.  You could depend just on search engine marketing and blogging and that could work.

But imagine if, for example, you were a wedding planner, and you build an Allyforce relationship with three Allies: a caterer, a florist, and an invitation designer.  And you felt their products and service were good.

Could you imagine setting up an easy way of sending (and tracking that send) contact information to the caterer, the florsti and invitation designer and enabling them to forward information to you.

You could do this via email or spreadsheet or with a proprietary tool (to address the logistics of it) but set that aside for a moment: do you see the power of building an Allyforce in your local community?

The small high-tech company targeting Fortune 1000

High-tech companies targeting Fortune 1000’s need to be able to touch as many account and touch the right people in those accounts.  Fortune 1000’s can be notoriously hard to navigate to find a decision-maker — wouldn’t it be great if you could collect and assimilate information from people who are doing the same type of prospecting as you?

Let’s take for example you sell traffic management software.  You could work with someone who does logging, DNS management, and maybe high-end routers.  You’re addressing the similar space of managing the traffic and speed of the network, but don’t compete directly.  Some of your customers could be great customers for those in your Allyforce; some of those were you lost deals could be equally great.

Plus, your Allies will know about accounts you  haven’t thought of and warn you of those you are.  It’s a good fit.

The small  low-tech company targeting SMBs

When targeting SMB’s, you can actually broaden your potential network because the decision-maker is often the same for many functions.  For example, an environmentally-friendly credit-card processor was paired up with a local advertising company and a restaurant-supplies company.  Why?  Restaurant owners made good shared targets for credit-card processing, for local advertising, as well as for restaurant-supplies.  Imagine the need to target a wide area of local business owners without an Allyforce behind you.

Large companies targeting large companies

Here’s where I initially got the idea: I worked at IBM where there are several reps each with their own lines of business and products…all calling the same companies in the same territory.  Problem was, there was no way to leverage each other’s meetings and relationships.

Large companies can often benefit by enabling individual reps in the field actually share contact information with each other at the prospecting level and provide real-time updates on accounts and personalities.

Imagine if a company that had a division hardware would effectively communication across its field sales reps what is going on with the division selling software.

The central premise of being able to truly share in revenue-generating partnerhip can apply in many instances, again, given the nature of the territory, the product being sold, and the partnerships being formed.

It’s a huge amount of unlocked potential waiting to be tapped.

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I read Guy Kawasaki talk, albeit briefly, about partnerships — the good and the bad.

He hit it on the nail by saying:  Partner for "spreadsheet" reasons.

The most important spreadsheet reasons are increasing revenues and finding new customers.

One of the key success criteria is whether these deals are "win-win."  We think the cleanest way to forge a relationship is one where both sides are able to uncover new leads, accounts, and opportunities for each other.

The concept is simple and powerful.  The execution needs several critical success factors which I’ve been discussing so far:

* visibility

* velocity

* reciprocity

* accountability

Put these in place for a good spreadsheet, win-win partnership and you’ll be seeing revenues increase.

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As I am discussing with companies why they don’t build a powerful network of referrals, one of the things that came up was the accountability.

Internally, the accountability is relatively easy to do.  The sales manager set metrics (such as the number of outbound calls) and measures them.  It’s pretty straightforward.

But the sales manager for Company A has no influence over the sales reps for Company B.  Company A can only really give names and accounts to Company B reps.  But do you see how there could be some initial distrust as well as just lack of momentum?

Suppose Sales Manager A gets his reps to start giving Company B reps contacts and access to their accounts.  What happens if they don’t see anything in return?  Where is the accountability?  You could say Sales Manager A contacts B and says, "Hey, we’ve given you a bunch of leads, what about your turn?"  There now becomes some sort of peer pressure to work it but notice that, first, there needs to be time for the sales manager to connect with all his reps and make sure that they have all, in fact, given leads and asked for some in return.  Now Manager A has the data to take to Manager B, who goes to all his reps and asks, what is going on, and needs to wait to see if anything is happening?

Meanwhile…Company A has lost interest…which makes Company B lose interest.

The issues: no "neutral zone", no clear metrics and no enabler for this kind of revenue-focused collaboration.

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Here’s an area which I believe can be developed further, but it often takes a good understanding of your own business in order to implement.

In this book, it comes with an approach of enabling the company to make $10-$30k more almost instantly, with absolutely no effort, no risk, and non investment.

Having the ability to provide dollars to the partnership based on success is key.

Let’s look at it between two technology companies that are selling complimentary, but non-competing software.

By providing a beefy and meaningful amount of the gross margin, you effectively get free marketing.

Technology companies often create margins of 20-30% to resellers, so why not offer that to partners as well?

This approach applies to individual business people as well, whether you are offering intangibles such as consulting or e-retail.

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This book is so good, I’m going to be quoting from most of it.  It articulates real-life examples of how to put the partnership principle into play and why.

Developing a host-beneficiary relationship means going beyond the conventional sales and marketing routines and tapping into related products or services that your clients need.  It means offering your product or service to somebody else’s clients in a related field.

He gives an example where Xerox spends say $10,000 to bring in 1,000 prospects to whom they sell 10.  Every company experiences this, where they have leads and contacts, but only a fraction get sold to.  What happens to the other 990?

Nothing.  The money was spent to draw them in, but the Xerox got nothing.

The writer proposed that someone work with Xerox and say, "If you can’t sell Xerox solutions, sell mine, and you’ll get a piece of the profit.  Don’t want ot do that, just give me the leads and you’ll get a share of ever sale."

Now that 990 leads gets transformed into real money and recovers the marketing expense.  That is money which goes straight to the bottom-line of Xerox.

Allyforce lets you optimize all those leads and participate in the profits.

It’s a powerful idea.

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Partnership announcements come with great brouhaha and excitement.

Alot of work typically goes into them, particularly between technology companies.  A strategic discussion and a technical fit often needs to be worked out.

Often times, the partnership fills in a gap in the marketplace, and it’s typically a smart thing.

So regarding the earlier post, this type of product-oriented partnership fills in one need, which is reducing internal resources needed to build out the product.

But I’ve seen it miss the second shoe-dropping: generating more sales.

The concept is sound: non-overlapping installs or differing prospects can be exchanged and shared, as they should be.

But field-level execution is where partnerships fail.  How do individual reps extend the partnership?  And most companies fail at that.

We’re exploring how the Partnership Principle can enable companies to address this and extract fullest value out of partners.

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The concept of "partnerships" has been around for a long time, nothing new.  The requirement to do partnership and do them well is reaching an urgent pitch.  And most companies, from big to small, do it poorly.

The term "partnership" has lots of implication, but the definition of success that I will be looking at focuses on creating value: more customers and more revenue.

Why are partnerships essential?

For the vast majority of companies that don’t have market dominance and scale, partnerships is essential because of constraints or challenges in these areas:

• internal resources: don’t have enough resources to do all things
• customers: customers have more choice or higher buying criteria

Those two areas are the areas where a partnership needs to develop and plant the seeds for growth.  If someone cannot articulate how both parties can reduce constraints around one or both of these areas, the partnership from a value-creation perspective is limited.

Let’s see why most partnerships fail…and how we can develop true partnership principles

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