Growing through partners
- Date Published
As a growth equity specialist, SEP supports emerging European technology businesses to scale into established technology leaders. An effective way to accelerate this journey is through leveraging partners. For the latest in SEP’s Growth Series, we brought our portfolio together to discuss how to identify and develop successful partnerships. To kick-off the discussion, John Kerr, SEP advisory board member and former Global CEO of Deloitte Consulting, and Sean Taylor, co-founder and CEO of SEP backed Content Guru, shared their experiences and advice on how to form successful partnerships.
Product partnering can offer many benefits including accelerating product development or creating technical synergies. Sales partnerships act as a scaling engine, enabling access to new territories and new customers, helping to accelerate revenue growth. However, a partnership needs to be differentiated from a reseller, sub-contractor or supplier relationship. Often, they are confused. In a true partnership there is sharing of risk and reward, equality of relationship and compromise on both sides.
A successful partnership leverages mutual resources to generate additional value for both sides. Whether the resources are a sales team, marketing spend, brand (especially in new markets for small vendors), IP, expertise, or customers – both sides need to bring equal investment to the relationship. A partnership also enables each side to focus on their core value proposition. For example, product partnerships might blend a product-development focused and a services-focused partner to enhance the post-sales experience.
Below are some key considerations when choosing a partner:
– Restrict the number of partners you engage with and ensure you have adequate resource to support each one. Overcommitting can result in failed relationships.
– Ensure there is strong overlap in target customer types but restrict the overlap of value propositions. Put in the context of a Venn diagram, each party’s value propositions should have limited overlap. If there is too much overlap, conflict may arise or there may be scope for one of the parties to be cut out of the customer relationship.
– Goals should be transparent and aligned. Think about your prospective partners’ needs and drivers and how you can play to these to help them reach their goals.
– Avoid exclusivity. If the partnership is exclusive, make sure this exclusivity runs both ways. Try to limit by time (12-24 months), geography and customer types. Exclusivity can result in single partner dependency which increases operational risk.
– Don’t be seduced by the size of the partner. Focus on the value that can be mutually created through enhanced value proposition, customer satisfaction and ultimately revenue for both partners. If you don’t regard each other as equals, with the same level of investment and commitment to making the partnership work, then don’t enter the relationship.
– Be open to small, initial opportunities for joint work. Treat this as a means of nurturing the relationship while evaluating how you can secure bigger, more attractive terms, for example through creating individual or joint intellectual property.
Making the partnership successful
Shaking hands on a deal with senior management is no guarantee of partnership success. Buy-in and relationship development is required at multiple levels within each organisation – from high level sponsors to the salesforce on the ground. In addition, you need to bear in mind:
Mutual commitment and investment – ensure both partners have allocated the right resource and upfront investment required to make the partnership successful.
Accountability – an individual on both sides should be accountable for the success of the partnership. Measure success through jointly developed KPIs and targets.
Honesty and openness – transparency on needs and realities for both sides is important to ensure alignment. For example, quarter ends may not match up resulting in a mismatch of motivations through the annual sales cycle. Mismatched quarter ends can work, but mitigations should be put in place to accommodate.
Quick time to value – consider introducing hot leads to cultivate a short list of sweet spot target customers. Focus on converting these leads to prove value quickly. This helps generate buy-in across all levels within each partner. Use an agile methodology of sprints to add value quickly versus grand deals which are too ambitious and time intensive which may result in fatigue.
Co-opetition is inevitable – seek clarity on how competitive situations will be dealt with and be consistent and open about the approach to avoid surprises or miscommunication. Avoid partnering with any organisation you compete with directly on a regular basis.
Be clear on who owns the customer – pre-agreed protocols for dealing with the customer through the customer lifecycle are crucial to avoid conflict. Clearly segment responsibilities and hold regular reviews of how the protocols are working.
Open book lead sharing – once trust and mutual value creation is established the nirvana is to reach open book lead sharing. This is a key milestone to target, but will only happen when you have the trust of your partner’s sales team.
Successful partnerships take mutual commitment, effort and trust. Through focusing on a limited number of partners, and making a material investment into each partnership, the opportunities for mutual value creation can be significant. To do this, consider concentrating on one or two partners initially to ensure they are successful, which then provides a structure and positive referrals for future partnerships.
If you are thinking about how to secure new partners or leverage existing relationships for your growth stage technology business, please get in touch with the SEP team. We would be happy to discuss your partner strategy and connect you with relevant individuals from within our network.
John was formerly CEO of Deloitte Consulting where he led the creation of Deloitte Digital and built channel partner relationships with software vendors such as Salesforce, Workday and SAP. From joining in 2003 as COO to leaving in 2018 as Vice Chairman, Deloitte Consulting’s revenue grew from less than $4bn to more than $16bn . John is now an SEP Advisory Board member alongside being Chairman of technology focused consultancy Kin + Carta.
Sean is co-founder and CEO of Content Guru. Content Guru has developed a leading Contact Centre-as-a-Service (CCaaS) solution and generates approximately 50% of revenue through partnerships with organisations such as Vodafone, Rakuten and Serco. SEP has worked with Content Guru since the start of 2018 during which time the business has doubled in scale, with partnerships being a major contributor to growth. Last week the business was placed #21 in the Sunday Times International Track 200 – a league table that ranks Britain’s mid-market private companies in order of fastest-growing international sales. The international business in particular has been driven by successful partnerships. The business now employs over 300 people with offices in the UK, US, Japan, the Netherlands and Germany.
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