How to create Win-Win-Win partnerships

  • How partnership are different from sales and marketing?

  • When to consider partnerships?

  • When should you expect ROI from partnerships?

  • How to incentivize partners to ensure results?

In conversation with Sal Mohammed, who led Strategic Partnership Development at Google, and currently CEO of partnership consulting QTA.


This is part 1, you can find the second part here: How to measure success in partnerships


How partnership are different from sales and marketing?



That is usually quite tricky, because they're all intertwined. The number one question you get is: "Oh, so you do sales, right?" And it's not a completely ridiculous statement.

Partnerships is sales, but it's not just sales. Think about a traditional sales transaction - you go in, maybe there's a structured price, you sell and that might be the end of it. With partnership that's just the beginning.

partnership doesn't end with a handshake, it starts with a handshake.

I often say that a partnership doesn't end with a handshake, it starts with a handshake. That's where the real work really has to come.

  • You have to get a team to do maybe a technical integration,

  • design team to then draw up the partnership, wireframes need to be made,

  • sales incentives need to be made.

So there's so much more to a partnership than just an agreement or a handshake. And it's trying to see actually what are these things, what makes a partnership tick, how do I do the engagement? And that expands way beyond sales or just marketing. It's really, when you want to look at, the closest thing to a partnership is starting a new business unit, because it has all of those elements that you would need to create a new business.


The closest thing to a partnership is starting a new business unit, because it has all of those elements that you would need to create a new business.

It's incredibly more strategic and difficult, because typically if you want to start a business you start it in something you know most of the things about, right?

Whereas a partnership is joining together - one typically is something you know a lot about and the other, which is quite new to you and foreign, hence why you want to partner. So it could be one of the hardest things to do in business.



When to start partnerships?


If I'm a CEO of a tech startup, should I figure out direct sales and marketing first?


There's no magic answer. In terms of where you are in either funding, business size or scale, it completely depends. What I would say however, is you do want to have some sort of product market fit. It's a futile effort to execute a partnership with a partner and then two months later say "Oh, I need to change my product."


Partnership example for a email marketing SaaS


So what I tell people a lot of the time is partnerships actually could supersede sales as a driver for growth. For instance, if you are email marketing tool you might never want to build a sales team, you want to build a strong product. But you then don't want to bring a hundred people in to sell the product, nor do you want to spend millions of pounds on Google and Facebook ads just to drive growth of the product.


partnerships actually could supersede sales as a driver for growth.

Really in that situation of a strong product and a competitive advantage somewhere within your technology, you'd really be looking to say "Well, how could I work with someone like GoDaddy?" who produces domain names, and say "Could you add us to the end of your basket journey? And someone can tick my email marketing tool and I'll give you 30% of that revenue."

You suddenly reach millions of people every month with a strong partnership leveraging somebody else's assets i.e. that base, but it's also beneficial to them. So it completely depends on what type of business you're, what model.


It's not just as simple, as saying "Oh, go direct first, make it work, scale it, then do partnerships on the side." Or what typically people do is they try to have partnerships as a side unit. I actually think that partnerships can be the main driver of growth for a lot of businesses.



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When to expect results from partnerships?


I need to figure out product market fit and then start thinking about partnerships. But what is the time horizon I should keep in mind? Is it a couple of quarters or is it a couple of years?


Partnership with large companies


Completely depends on the type of partnership you want to execute. For instance, you could go and work with a large company, have a big integration to do, create sales collateral for a thousand salespeople to then resell the product. All the design, the legal work that goes with that. And it could be the biggest partnership you'll ever see in your life, it could be monumental for the business.


Partnership with new channels


At the same time there are new channels emerging. Having your company's product at the end of an influencer's video who's going to get 10 million views is equally as impressive, but you could do that in a month or a week.


So the timeframe really depends on the type of partnership you're trying to execute, but typically keep a rule of thumb that people underestimate the time of partnership by half. So it usually takes twice as long to do something then do you think it does. The only thing I would add to that is not every partnership is a success immediately.


So there are really two phases to look at the time for partnerships.

  1. how long does it take you to get set and implemented?

  2. how long does it take for this to become as big as it can be?

For different companies that means different things. So it could be driving a million pounds of revenue every month for you. But perhaps a potential could be 10 million pounds of revenue. So you still got a long way to go, so it's working, but there are still time and effort you need to put into that partnership.



How to incentivize partners?


How to incentivize partners to make sure that they produce results? Especially coming back to influencers, non-transacting partners who you keep in your ecosystem.


When we're setting up partnerships for companies, we always say "Go into it with the mindset that your partner is going to get more out of it than you are". Because you take what you need from it, but always make sure that they're getting more out of it, at least in your head.

Go into it with the mindset that your partner is going to get more out of it than you are.

It's kind of when people say: "When you find a partner, make sure that you're lucky to have them, rather than they're lucky to have you", right? Because then you know they're going to be incentivized from the get-go, because there's a lot in it for them.


But in terms of incentivizing, there's multiple angles to it. It's really understanding what matters in this business and what leavers do I need to push to make it happen.

  • It might be you need to incentivize the CEO and the metrics that the board is trying to drive,

  • but it might be that you need to incentivize the sales teams,

  • it might be you need to incentivize that partnership manager's on the other end quarterly targets.


Understand the context to get incentives right


In terms of incentivization, it's typically one that the people miss a lot. So for instance, let's see you might work with a telco and you'll see a startup saying "we have our product with the telco, they're going to sell it to 2 million business customers, we're going to be rich, it's going to be amazing!" Without understanding that it's people on the phone that are selling that product, each of them have call handling times of 3 minutes per call, they have 8 products to sell. Within that they have a company strategy and targets to hit.


Unless you're aligned on all levels and also have a pay incentive that makes it worth their while, the best partnership in the world could fail.

Unless you're aligned on all levels and also have a pay incentive that makes it worth their while, the best partnership in the world could fail. So it's understanding what matters for your client on the other end, and how do their incentive systems work internally to make the most out of partnership.


There are 3 people who it needs to work for. It needs to be a "win-win-win"


I typically think there are 3 people who it needs to work for. It needs to be a "win-win-win" we call it.

  1. It needs to work for the customer,

  2. It needs to work for you,

  3. and it needs to work for your partner.


A great example we use in the UK is Orange Wednesdays, which was a system with Orange where basically every Orange's customer could get free cinema tickets on Wednesday. 2 for 1 cinema tickets on Wednesdays.


What that did was it drove millions of customers to Orange, because they needed an Orange code to go to the cinema.

At the same time, it was amazing for the cinemas, because they got to maximize a dead day for them. Wednesday is their driest day in terms of sales, but because people aren't paying as much for the tickets, they're spending a lot on concessions.

And for you as a customer free cinema ticket is amazing as well, right? So that's something that works well for everybody and there's some sort of financial incentive for everybody.

  • Orange get the long-term business of the customer who will probably not change or drop out, unless is an incident or situation.

  • The cinemas get a lot of revenue on days when they weren't getting anything.

  • And the customer is getting a free ticket.

Three are incentivized all in one partnership.


Continues in part 2: How to measure success in partnerships


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