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Partnering Maturity Model
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The IAMCP Partnering Maturity Model

Roadmap to Higher Profits and Increased Customer Satisfaction

After having spent a decade as an evangelist for partnering I have collected a few insights in how successful partnering looks like. I have realized that partnering takes hard work and that people who are not willing, or able, to meet in person will have little success. The same goes for the ones that confuse ‘resellership' to true partnering.

A key question is what happens when partners work alone instead of embrace partnering. I have stated a few bullets below that summarize the cons:

  • Customers will be under served – customers need to look elsewhere for someone that can deliver what they need
  • It opens up for the competition and there is a risk that technology might change. Change of technology can result in less need for your solutions because you might need a certain infrastructure for your solution (like Windows or SQL Server)
  • You will become just a vendor and not the trusted advisor to your customer
  • Less revenue, less profit…

Another more pragmatic and easy way to look at the problem of working alone is that your customers have budgeted more than what they actually spend. Last year we had 175 Billion USD left in budgets that was never spent! [reference Radar Group]. And we all know that last year was a bad year for the world economy.

Other reasons for partnering is that you might want to go International, grow with less risk or simply overtake the competition and grow faster than the rest. Good news for you is that with partnering this can happen!

I invented the Partnering Maturity Model because I wanted to capture my insights and provide a roadmap for how to increase maturity in partnering. I was of course inspired by the Core IO Maturity Model from Microsoft which I love very much as a simple and very useful tool in selling.

So let our customers meet a team with experts in every area, with presence in every corner of the globe. Let our customers meet you and our team of partners and you can rest assure that it will wipe out the competition because your customer will get it all from you and they will see you as their most trusted advisor.

In the Partnering Maturity Model there are four stages and I have named them Basic, Reactive, Proactive and Dynamic.

Getting to' Dynamic' in all areas is extremely hard but everyone should be able to move the dial and reach ‘Proactive' in most areas. You can also measure the maturity of your fellow partners and see if they are enough ‘partner friendly' for you to consider working with them.

There are 10 different areas in where to track and increase maturity and they are:

1. Joint business planning

2. Pipeline

3. Agreement

4. Leads

5. Sales Compensation

6. Market messaging

7. Geography

8. Resource Utilization

9. Customer Relationship

10. Readiness and Certifications [applies to formal vendor programs]

 

Joint Business Planning

The first area is ‘Joint Business Planning' and my advice is that you:

  • Sit down with partners and just explore opportunities. It can be unstructured at first 
  • Identify the gaps in your offerings
  • Consider to perhaps add one more partner in order to increase the value of your offering
  • Create a circle of trust and meet in person in a rhythm:
    • Quarterly is good
    • Monthly is great
    • Weekly is Nirvana!

Pipeline

The next area is ‘Pipeline'. Of course it starts with you running some kind of pipeline management inside your own organization but then my suggestions to you are:

  • Remember that partnering is a two way street. All parties must get opportunities
  • Bad partnering is when someone takes and never gives
  • Share your pipeline [or part of it] on the web to your trusted partners
  • You need ‘buy in' from the top – I suggest that your VP of Sales meet in a rhythm
  • Make partnering an agenda item in sales team meetings

Agreement

  •  Agreement' is perhaps not the funniest part but we all know the need for it.
  • Remember that the foundation is trust. Business is done between people that trust each other 
  • A good first step is to have a ‘Memorandum of Understanding' signed by senior people on both sides
  • Don't be over smart or use your legal skills only for your own benefit. Go for the long haul and create a partnering agreement that goes both ways
  • Spend time on trying to identify all aspects and possible scenarios
  • Review the agreement every year
  • Don't make it exclusive. People should do partnering with the ones that they see value in doing it with

Leads

Remember that ‘Leads' are generated by a process and do not just happen.

I personally hate what I call the ‘Reversed Lead' and my definition is that it is when someone is trying to sell something and they call it a lead instead of simply say that they are looking for resellers!

  • Commit to the same sales process!
  • Create a process for how to generate leads and make a joint investment in time and money.
  • The ‘Reversed Lead' is worthless
    • Someone trying to sell something with no identified customer
  • Listen to the customer
    • Identify opportunities, commit to connect within a certain timeframe
  • Be generous – ‘Givers gain'
    • Don't need to earn $$$ every time
    •  Better to have one up!

Sales Compensation

It is important that you have a compensation model for revenue driven towards partnering that encourages your sales people. Your margin is of course less in partnering compared to ‘producing' yourself but the sales compensation model should not discriminate that.

  • Award your sales people the same for partnering as when you ‘produce' yourself
  • Align your compensation models with your partners
  • Be proud of sales done via partnering
  • Invent ‘soft awards' like Partnering Champion of the Month/Quarter…

Market Messaging

It is important that you embrace partnering in your message to the market. It will also give your more ‘bang for your bucks' doing things together with your fellow partners. And if you name your partnership something clever you will have a great differentiating factor!

  • Show that you like partnering on your website, business cards, ads and in your company presentation
  • Consider inventing a name of your circle of trust – [Oklahoma's Best, Golden Circle, Northwest Alliance are made up examples just to illustrate]
  • Go to market together in joint ads, joint booths at trade shows, joint seminars etc

Geography

Because partnering is a great way to reach new geographical markets you should really consider using partners if you want to scale your business. The perhaps biggest mistake is when people try to sell to the whole world at once and are unwilling to go out and meet people in person because they think they can handle it electronically and not in person!

  • Identify where you want to go and please be selective so that you do not try to take on the whole Earth at once. Most successful is if you single out a country or a state and focus!
  • Go out and meet partners in person – you will face limited success if you try to do it via email or conference calls!
  • Remember about the ‘Reversed Lead'! Don't say that you have a lead if you do not have a potential customer that has expressed interest.
  • Leverage IAMCP Chapters in other geographies and ask them if you can be a guest in their next meeting! You will be overwhelmed about the positive response!

Resource Utilization

It is good to set the stage for how to share resources and how to price them accordingly. The first and most important thing is to remember it goes two-ways.

  • Commit to a pricelist or revenue sharing model that goes two-ways.
  • Be clever and narrow your own specialization by using other partners when it is not a core competency for you.
  • Be open to transfer people that work for you to other partners if they are not core for you.
  • Try to help out on bench sharing by actively share information on who is on the bench and try to get them involved in assignments.
    • Give priority to your own circle of trust!

Customer Relationship

It is important to meet customers and to discuss pros/cons of the partnering experience that you deliver.

  • Do 1:1 meetings with customers to understand their experience with their different partner engagements
  • Proactive measure customer satisfaction and actively collect references for your circle of trust
  •  Take both collective and individual responsibility for customer service regardless of who's fault it is

Readiness and Certifications [applies to formal vendor programs]

Some run formal vendor programs. This is often ISVs and hardware vendors. If you are running a formal vendor program there are many things to pay attention to and the ones below apply to partnering [please note the ‘ing' at the end of the word].

  • Joint partner training in overlapping areas and joint certification planning aiming to reduce overlaps
  •  Multiyear certification plan together with other partners - using strength in combined advanced certifications in order to win customers

Congratulations!

You have now become a fully fledged expert in partnering! Your company will grow faster, your customers will be happier and your profit margins will be better than the rest that do not see the light of partnering!

My final piece of advice is that it takes practice and it is a journey where you will not reach your destination at an instant so be patient and the rewards will come over time!

For more advice please do not hesitate to contact me on per@idenet.com. You might also want to visit my blog once and then on http://www.peronit.com/.

Stockholm 16th Aug 2010, Per Werngren


Per Werngren runs hosting and outsourcing company IDE in Scandinavia. He served as President of IAMCP Sweden 2003-2005, Worldwide Vice President 2004-2005, Worldwide President 2005-2008 and a short run first half of 2010. Per is also a Fellow of the Institute of Directors in London.

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