One of the most famous exit lines in film history comes from the 1942 movie “Casablanca.” Humphrey Bogart, who plays Rick Blaine, a saloon owner and corrupt moralist, says to Claude Rains, who plays Captain Louis Renault, a local police officer and corrupt opportunist:
“Louis, I think this is the beginning of a beautiful friendship.”
Why does Rick say this? Because the friendship is mutually beneficial. Rick and Captain Renault had made a bet for 10,000 francs that Victor Laszlo, a fugitive Czech Resistance leader who had escaped from a Nazi concentration camp, would be prevented from leaving Casablanca. If Victor escaped, Rick would win the bet. As the story unfolds, Rick shoots and kills Nazi leader Major Strasser as he attempts to stop Victor Laszlo and his wife, played by Ingrid Bergman, from departing Casablanca. Captain Renault rounds up the police but does not turn Rick in, asking the officers to “round up the usual suspects.” Captain Renault realizes that Rick has saved him from the tyrannic control of Major Strasser. Captain Renault and Rick decide to leave Casablanca and join the Free French at Brazzaville, and Captain Renault tells Rick he will use the 10,000 francs he lost in their bet to fund their trip. Both Rick and Captain Renault have developed a mutual respect, realizing they can be of use to each other as they strive to fight the Germans in World War II.
Let’s turn the clocks forward to the high technology industry of 2011. Many organizations are striving to build strategic partnerships that will drive revenue for their businesses. Often times, they focus more on the quantity rather than quality of partnerships. As an example, a company that highlights numerous partnerships on its website will appear more established and credible to potential customers, partners and acquirers. There may be extreme pressure from board members and executive teams to build as many partnerships as possible within a short period of time. In this situation, the compelling reason for developing the partnerships may get lost, and the effort is more akin to throwing darts against a wall to see which one sticks rather than a taking a methodical approach to securing productive partnerships.
When it comes to developing sales partnerships, most companies take a self-serving and myopic view. They are mostly interested in receiving leads and haven’t spent enough time considering what’s in it for their partners. Enthusiastically, they shake hands, execute a formal agreement, celebrate the partnership and wait for the leads to arrive…and nothing happens. They had placed so much time and effort into building key executive relationships with their partner and educating the sales team on their product or solution, but the partnership soon becomes unproductive and stagnant.
One of the key ingredients for a successful partnership is to ensure there is a great benefit for all parties. The existence of the partnership needs to solve a pain point or business problem or it will become extinct. Let’s consider examples of an inactive contrasted with a productive partnership.
Example of Inactive Partnership
A software company developed a product to help organizations manage their software licenses to determine whether or not they were in compliance or overpaying their vendors. The software company partnered with a Value Added Reseller (VAR) to resell their software product. Both organizations felt very positive about the opportunity for revenue and lead exchange through the partnership. The software company trained the VAR sales and technical teams on the product and how to sell it, and they developed joint marketing programs to promote the solution to the VAR’s existing customer base. Despite the time and money involved in this partnership, no leads or sales ensued. What happened? In this particular situation, 1) the VAR was already selling products that somewhat competed or overlapped with the software company’s product and 2) there was no specific offering related to Software License Management so selling the solution was not in the front of the sales people’s minds. Basically, the VAR had numerous software products in their bag of tricks and this was just another one on the list. Finally, the software company was not providing leads of any kind but simply waiting for the VAR to make all the effort.
Example of Productive Partnership
This same software company approached a systems integrator (SI) as a potential strategic partner. The SI had numerous customers that had outsourced IT functions to them. In many of these IT outsourcing agreements, the SI had Service Level Agreements (SLAs) in place where they were contracted to manage all software licenses of their customers to ensure compliance with their vendors. They had developed an internal solution to manage software licenses, however it was not meeting their requirements or the expectations of their customers. The SI decided to identify a commercially-developed solution that would meet their requirements. They partnered with the software company, designed a formal offering surrounding the solution to include product and services, and sold it to their customers. This resulted in a highly beneficial partnership for both parties – it became an annuity business for the software company as the SI purchased software licenses for their outsourcing customers, and the SI was now spending a lot less to solve a business problem while simultaneously meeting the needs of their customers.
In summary, it is critical that the forming of a partnership solves a pain point or business problem and that there is something valuable to be gained by all parties. Organizations must consider what’s in it for their partner to ensure a mutually productive and profitable alliance.