Highway to Hell – When Partnerships have the Power to Kill your Business

Partnerships have the ability to make or break your business. Take my word for it, I’ve made a lifelong career out of great partnerships, have won numerous 5 star channel awards, countless channel chief accolades, and helped hundreds of vendors and partners make partnerships work

Today, I’m here to tell you that the partnership game is changing at lightning speed, and you will need to evolve, or perish in the process. Here’s an exercise to see if you might be suffering from the types of corrosive partnerships that could torpedo or harm your business. And if you want to listen to AC/DC while doing so, be our guest.

Step 1: Write down your top 5 partnerships.

  • If you are a vendor listening use not just your top 5 partners but instead perhaps your top 5 growth candidates.
  • If you are a partner, list the 5 vendors who make up the lion share of your revenue over the next 3 years.

Step 2: Define the most important metrics for any partnership – loyalty and results.

Step 3: Understand Loyalty.

Think about your top 5 partners and try to determine if they have high or low loyalty. To help you decide, let’s talk about why you might grade a partner low in loyalty. What I have seen most often as we consult with vendors and partners to evolve their partnering strategy is low loyalty exhibited in things like:

1. Imbalance of partnership value between the two firms. How do you know if you have this issue? Some examples are:

a. your partnership agreement becomes more and more one sided; you are almost “forced” to sign something new too often.

b. you only see the people at the top of the firm at big events and/or you are being called into a meeting with the top folks vs. you asking and getting the top to top meeting.

c. their communication cadence offers plenty of “one to many” updates on what’s happening but no personal top to top communication

2. Different stakes in the game. How do you know if you have this problem?

a. your partner sets unrealistic goals

b. they are unaware of how you make your money and they don’t seem to care about how you make more of it,

c. unrealistic program goals or making unrealistic asks of a program.

3. Growth isn’t the focus. What are some examples?

a. your partner doesn’t bring new programs for growth to you – it’s one directional for the growth ideas and they are all yours.

b. meetings are focused primarily on results and not on growth.

4. Vision for the partnership is disconnected. They are just not that in to you!

a. is your logo on their website?

b. are they referencing you in press releases?

c. do their top execs engage with you in social media?

d. do they have a following that can help you penetrate where you need to penetrate, and are they using it as such?

5. Failure of trust. This is the largest tell tale sign. How do you know there is an issue? Remember without mutual trust the partnership will fail.

a. is your partnership based on trust or proof?

b. do you feel that if something happens your partner first believes you acted in the best intentions or do they assume the worst first? Do you do the same?

c. can you share critical feedback and not create damage in the relationship?

Step 4: Clarify real Results.

Sure, sales and revenue matter, but there are other metrics that lead people to think they have great results which aren’t sustainable. Funnel growth, conversion rates, repeat business/residuals, customer retention and acquisition and cost to serve are a great start but you need more.

Look at things like customer net promoter scores, customer engagement, partnership brand position – which is particularly critical in a social media driven world, and partner program results. Are you getting the ROI you need from the program or from participation in the program? Money and time spent without a good ROI speaks of low results. If you don’t have good results across all of these metrics, you may want to mark this partnership as ‘low impact’.

Now it’s time to take some action – quickly draw a chart – this chart should have an X and Y axis and should be labeled on one axis as “loyalty” and the other as “results” with low and high being the grade metrics – in other words you will have a 4 quad with the following categories:

  1. High loyalty, high results – these are your key partnerships which should be prioritized above all others, we will talk more about them in a future episode.
  2. High loyalty, low results – these are investment partnerships, we will also talk about them in a future episode
  3. Low loyalty, high results – these are highway to hell partnerships which will lull you into doing the wrong things for the results and in the end put your business on the wrong track
  4. Low loyalty, low results – these are perished partnerships, and should be handled out of your partnership program via normal governance, if you are not doing that or don’t have the right metrics in place you will want to get some help in this area; we should talk!

So, today I am going to wrap up with some priority actions for your Highway to Hell – low loyalty high result partnerships, since these are the most potentially damaging to your sustained success.

  1. set up a scorecard for loyalty with hard metrics that will indicate true loyalty and determine the progress timeline
  2. communicate with your team, get their inputs and feedback. Don’t let your internal team find out about your plan from the partner – make sure they know what’s happening
  3. make the call. Have a frank and honest discussion with the executive leadership at the partnership firm, ensure you also engage your day to day support teams in this dialogue. We recommend using the “feel, felt, found” method a proven way to communicate tough news – here is what we would say: “We feel as if our partnership does not have the reciprocal loyalty and trust necessary for our joint success”; “We’ve felt this way before with other partners where we now have a great relationship”; “We’ve found that by addressing the issues we were able to build an even better partnership. How are you willing to work on this with us?” Ask how are you willing not are you willing? Don’t let an easy “yes” answer fool you – you are looking for concrete steps to solidify this relationship.
  4. review all partnership documents, make the changes now to them to overcome the hurdles you are seeing – above all protect yourself. If there are things like immediate termination clauses with soft metrics toughen them up
  5. agree with your partner on scorecard, communication and timelines. This cannot be an annual or even a quarterly thing – this takes time and everyone must invest and be held accountable.

Finally, be prepared to terminate the partnership before it terminates you; if the partner is unwilling or unable to execute on the 5 step program above, move quickly and decisively to find a new partnership to make up the gap, and have a 6-18 month exit plan so that you don’t find yourself on the Partner Highway to Hell.

JS Group is here to help if you would prefer to have one of our team members assist in developing your plan, meet with your partner to facilitate the productive dialogue, and follow through on the plan – we are here to help.

Please call us at 908-566-7241, DM me on Linked In, Twitter (@channelsmart) or visit us at www.jsgnow.com

As always, there is a companion podcast with more in-depth information on this topic, just click on our podcast link and you’ll find it there.

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JSG specializes in creating impactful indirect go-to-market strategies for tech firms. We develop next-gen channel frameworks and deploy innovative growth strategies that go well beyond theory, delivering real-world results.


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