Close Capability Gaps in Your Marketing and Sales with Partnerships
“If only we could do this…if only we had the people…if only we had the budget.”
You’ve heard these words before. You may have even spoken them. They’re the tight-jawed expressions of frustration over “almost, but not quite.”
We were reminded of this recently in a discussion with an executive at a building products company. The conversation centered around saving time on the jobsite and how contractors can resist change that could dramatically increase productivity and profitability. The manager recalled a partner program with other well-known, noncompeting brands that had all the earmarks of being successful in convincing contractors to adopt a new solution. One aspect of this multibrand partnership program — a guarantee of dollar savings — was right on the money. This was validated in a recent EMA Group B2B survey of more than 400 electrical, plumbing, HVAC and general contractors who said that resistance breaks down with trial, demos or guarantees.
But, the executive said, “The campaign started off promising, then just kind of withered away.”
Making partnerships work
Partnerships like the one described above represent a valid collaboration strategy that can effectively close capability and resource gaps. According to management and marketing consultant Frost & Sullivan (F&S), strategic partnerships work best when there’s synergy…when one player needs to supplement existing competencies with those of another player or players. The resulting proficiency should serve a need in the marketplace with a unique offering that none of the participants could do on its own.
F&S notes that strategic partnerships typically share risk, funding and resource contributions; commitments are usually long term, the relationship is reciprocal and strategy shared. CEOs say that strategic partnerships are their #1 growth strategy, eclipsing new product launches and geographic expansion.
So, why didn’t that executive’s partnership program make it?
F&S identifies four pitfalls:
- The need for a partner goes untested — There’s a leap of logic (and maybe faith) that complementary partners will fill the voids successfully. There is little up-front research done, if any, and real needs aren’t assessed fully. Make sure to pursue partnerships for the right reasons. Test the concept with key stakeholders, especially those who are part of the execution teams. Get some contractors together for a focus group and get qualitative feedback; see what color flags they throw out.
- Partnership goals go unarticulated — For partnerships that go south in four months or less, the primary cause is lack of clarity on the overall goals, not the partners’ individual goals. As we know in building and construction, there are many entrepreneurial firms that do very well playing solo but find the give and take of collaboration difficult. The overarching purpose of the partnership must be well understood and agreed upon from the start.
- Partner incompatibility goes unnoticed until it’s too late — Don’t look just at financial or brand strength. For partnerships to work, parties need to weigh all the critical compatibility factors like “size, culture, strategy, governance mechanisms, willingness to collaborate and trust between partners.” While a partnership of leading brands in plumbing, HVAC and electrical may look great on paper, individual corporate ideals could differ dramatically. A clash of values can be more explosive than any other factor.
- Partnerships actually bolster weaknesses rather than strengths — There needs to be proportional give and take, along with proportional win/win, because each participant needs to see a return higher than its investment. When one partneris stronger than another and gets less from the others, interest and commitment can fade. Or, when weak partners continue struggling in the combination, instability can bring a messy end.
Don’t rule out big ideas and potential gains for lack of resources. An open mind can work better than an open checkbook. Keep strategic partnerships in play, but have a good playbook. Frost & Sullivan suggests a four-phase method for evaluating strategic partnerships. Learn more and download a sample of F&S’s “Growth Process Toolkit” for Strategic Partnerships.If you'd like to learn more, Contact Us.