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When forming strategic partnerships, you must first understand your why. Is it for growth in your existing market, entering a new market, reducing churn or gaining “trust” from the end buyer by partnering with a known name?
This clarity of purpose drives everything that follows. I’ve learned a lot from my journey to different partnerships, from recruiting to nurturing strategic partners. While signing an agreement is the goal, looking at the long-term, mutually beneficial relationships that can accentuate both parties’ capabilities is a whole other level to consider.
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Selecting the ideal strategic partner
When identifying and choosing the ideal strategic partners, I focus on alignment, mutual value and long-term potential. First, it’s critical to ensure that our missions and goals align. Only when both sides strive toward the same vision will a strategic tie-up flourish.
If our values do not align, our collaboration is probably more of a transient transactional relationship than a long-term partnership. For instance, I ask myself: Do they sell a complementary solution that makes my solution more powerful? Do our combined solutions make us “stickier” together? Are we talking to the same “buyer” on the other side? These questions help ensure that we’re truly moving forward in an efficient manner rather than just having a simple business arrangement.
For example, we successfully formed partnerships with some of the biggest names in the dental equipment distribution industry. As we grew in the dental service organization (DSO) space, clients frequently asked if we worked with companies like Henry Schein, Darby, or Patterson.
By encouraging clients to ask their distributor representative the same question on our behalf, we were able to get the attention of these larger companies. Each new client win amplified our presence, eventually granting us a seat at the table with these industry leaders. This strategy built our momentum and solidified our brand within the market.
Effective outreach efforts
Initiating partnerships isn’t about throwing out cold calls and hoping something sticks. My approach has always been about personalization and providing value upfront. To really have an effective partnership, you need to have some sense of market traction or demand for your product. This allows you to facilitate and start a conversation.
I also look for partners who bring complementary strengths to the table—skills or assets we may not have in-house but that can elevate our collective offerings. This could be industry expertise, market access, or unique technology. Partnerships thrive when both sides offer something unique that enhances the other’s business.
The question is always: how much trust and credibility do their clients have with them? It’s important to evaluate their reputation — are they known for excellent customer experiences, and do they receive good feedback from the industry? Their credibility can hype up our solution when integrated.
Negotiating mutually beneficial terms
In every partnership, it’s essential to create a win/win scenario. There is a common phrase that “a good compromise is when both parties are dissatisfied.” I believe that when working on a partnership agreement, this is a sign of a potentially bad fit. You should never pursue partnerships where this balance can’t be established. I ensure a transparent value exchange by charting what each party offers. When one side believes they are providing more than the other, the probability of imbalance and resentment would definitely hinder any progress. The ideal approach is openness throughout negotiations. I lay out our goals, what we need, and where we’re flexible, encouraging the other party to do the same. Understanding the why behind each term ensures that we craft fair, future-focused terms.
Finally, clear expectations and accountability are essential. Though this is hardly the case, it’s natural to presume that mutual warmth will help resolve any problems. Establishing formal agreements with important performance criteria guarantees that both sides know what is expected and helps eliminate later interpretation errors.
What NOT to do when finding a partner
First of all, avoid forming a partnership for the mere purpose of expansion if you have not identified any advantages for the other party. Brand names coming together alone isn’t enough reason. Unless you are also a major player in the space, you will most likely not occupy much of their mindshare for them to think about how to make you successful unless you are part of a publically announced strategic initiative or put in the work to be top of mind.
Another common mistake is focusing solely on the business benefits while ignoring cultural compatibility. A partnership might look great on paper — complementary skills, access to new markets, or mutual benefits — but if the working styles and values don’t mesh, it will be difficult to execute smoothly. For example, if you differ on post-sales onboarding experience, client communication or even how employees feel about working at their company, it will create issues that can stall success.
Lastly, don’t leave things up to chance or assume that you’re on the same page. Discuss and expound on technicalities and every criterion that may be covered in the agreement. Overcommunicate if necessary.
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Quality always outweighs the quantity of partnerships
We have many partnerships across the market, around 15 now. I learned that assuming you are the most important thing to the new partner and everyone is excited about selling your combined solution is another recipe for disaster.
Remember that some are uncomfortable selling something they don’t fully understand and will not pull your new tool out of their toolbox. They would rather not “look dumb” in front of a client. This happens in many partnerships until you can buddy call and coach them until comfort is established.
Source: entrepreneur.com