Feb 11 2008
Strategic Partnerships And Long-term Revenue Generation
The key accelerator in any business venture. We seek it out, willing to disburse monies, energy and time to attract it, compromise to actually secure it, and once secured, deliver it with a flourish in hopes of satisfying the party that made the actual purchase. In thirty or sixty days when the receivables are in our midst, our accelerator able to sustain us on this ride we partake in, we seek to feed the engine yet again.
The accelerator is necessary and welcome. But who is control of the ride you are on. Are you the type of business leader that is comfortable riding on the rollercoaster of revenue and profits typical of sales pursuits without a road map. Or are you the type of business leader who expects to be the driver of the revenue and profit engine.
If you are the former, sales generation can be unplanned, opportunistic, profitable or not, generally short-term, unsustainable, and can result in cash flow concerns.
If, however, you are the latter, then you know that strategic sales partnerships are an essential component of business planning, execution, long term viability, sustainability and profitability. Whom you partner with and how you manage that relationship will go a long way in determining your long-term success.
Partnerships take many forms. For the purposes of our discussion, we will focus on distributors and wholesalers in part 1 of this article, while we review the benefits of successful strategic partnerships with the retail community in part 2.
Before you actually survey the landscape and analyze the partnership possibilities, you should assess a few things about your own business and expectations of the strategic relationship.
What stage is your overall business or particular product or service category in: introduction, growth, maturity or decline? Different distributors bring varying strengths to the table. Within the first two stages, a distributor needs to be committed to supporting an aggressive, yet patient and sometimes customized approach to business nurturing and development. They may enjoy established relationships in the market, but need to develop sales and marketing strategies or tactics unique to your offering.
Their sales force must also be committed to promoting your offering. Large distributors may or may not be willing to put in the time and energy required to support a business in its infancy or growth stage, despite the size of their sales force and market share. You may represent but one small portion of their basket of offerings, in which case focus may be lacking. On the other hand smaller distributors, perhaps more attentive and willing to extend the initial ramp up of effort may not have the necessary relationships within the industry sector to warrant trial and support of new offerings.
In the maturity and decline stages, commitment to working together on market strategies is essential. You may choose to extend market penetration through additional promotional support, product or service extensions, protect margins or seek additional channels to sell through. Seeking additional channels can also mean establishing a strategic partnership with a different distributor, as core competencies required to compete in varying channels differ. Whichever tactic you seek, it will demand collaboration as you navigate your way in the marketplace.
Speaking of navigation, successful partnerships flourish through an alignment of overall market objectives, customer targets, brand or business promise. That’s why its called a strategic partnership, one that is well designed, planned and executed to deliver long-term success rather than simple revenue generation. Collectively your strengths deliver the results you seek, while any weaknesses are overcome by the other partner’s strengths. Perhaps your core competency involves developing innovative products through industry-leading research and development, while the distributor’s sales and logistical strengths provide access to key target markets. The marrying of those competencies would optimize a go-to-market strategy.
Alternatively, your business promise or objectives may require for example a commitment to a significant after sales service program, and the distributor in question excels in customer acquisition and market knowledge. That does not mean that they have the necessary infrastructure in place to support such a service objective, hence diminishing any possible returns on a partnership.
Strategic partnerships can attain an even higher degree of success through agreement on the overall expectations of the partnership, establishing measurements on how you will both attain growth: revenue targets, growth, commission fees, service levels, key account planning and acquisitions, margin expectations and how to resolve issues. You can periodically meet to review and analyze the results, identify the gaps and collaborate on how to close them together.
It also demands that you must be willing to share and communicate your own business goals and maintain that dialogue as your business grows and changes. Include your distributor in certain stages of business planning as you map out the possibilities and feasibility of each opportunity using their in-market expertise. Offer sales and marketing support, or any other tools or support vehicles that will ensure successful market growth.
Think of this strategic sales partner as an extension of your business entity and promise. One that requires consistency, resiliency, and collaboration.
Planning and communicating: key ingredients in successful strategic sales partnerships.
Strategic Sales Partnerships: Drivers of the revenue and profit engine
A creative strategist, sales and marketing guru and business builder, Caroline Kalaydjian has a history of identifying and delivering unique business value, reach, strength and performance. With over 15 years of corporate experience in global consumer and commercial goods, she has been closely involved in strategic thinking, operational effectiveness, sales and marketing strategies, customer acquisition and retention planning, and fiscal productivity.
Having created profitable growth plans across many markets, she decided to create her own business advisory firm, Sui Generis Consult. Recognizing that anyone with a business card can call themselves a consultant, and hoping to practice what she preaches, she coined business architecture as a means of building business in a differentiated, sustainable and profitable manner. She now welcomes entrepreneurs interested in playing the marketplace game, to join her in using cleverly devised and disguised navigation tools, building blocks and smarts to beat back the competition.
Tags: Revenue generation, strategic sales planning
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