Get the Strategic Alliance Partner to Come After You

BeggingThe courtship almost always starts with the small company approaching the HQ of the big company they desire as a strategic partner.  Usually, the big company is too distracted or the joint value from a partnership isn’t perceived as significant.  If very lucky, a successful pitch is followed by numerous conference calls, lab trials, partner program paperwork and accompany payment.  Eventually, the new partnership is revealed to the big company’s sales team and the pitching starts all over again.  After all, if this sales team doesn’t take interest in the offering then all the work leading up to that point was wasted.  So why not reverse the sequence of events?

Strategic alliances take on many forms.  The example above involves the big company selling your product, maybe in modified form and maybe integrated with one of their products.  But the taunting suggestion to reverse the sequence of events applies to many forms of strategic alliances.

The key question to ask is what would cause the big strategic alliance partner to come after you instead of the other way around?  Remember, big companies you want to partner with will do only what’s good for them and you almost certainly have more to lose than they do if the relationship doesn’t work out.  If your offering provides valuable synergies for the big company, follow those synergies in a direction furthest away from the big company and then work your way back towards the big company.  Usually this means starting by selling into their customer base and using that to gain an introduction to their field sales team (for companies with a direct sales model) or marketing team (for companies with a light-touch or zero-touch sales model).

Here’s a sequence of events I used in the past to gain a significant partnership with a Fortune 100 company.  To make the narrative easier to follow, let’s call the big company “Acme” and my company “Shockwave”.

  1. Acme added a significant new capability (let’s call it “ABC”) to its product.  They intended this new capability to further distance them from their competition.
  2. Acme did quite a bit of sales training on ABC and even provided sales incentives to help get a jump-start.  But the sales team struggled to convince customers to use the new ABC feature.  It just wasn’t compelling enough by itself. (see related article titled “Vitamin or Aspirin – Which Are You Offering?“)
  3. Shockwave’s product could utilize Acme’s ABC data to help solve a gnarly problem experienced by most enterprise companies.
  4. Each time Shockwave sold its product to an enterprise that also had Acme’s product, the Shockwave rep found a way to notify the Acme rep.
  5. Soon, Acme reps started inviting their local Shockwave counterparts into their regional sales office for demos and lunch-and-learns so they could better sell together.  The news spread to other sales regions and the process repeated.  Soon, Acme was winning competitive deals in new accounts and giving Shockwave at least some of the credit.
  6. After a few months, Acme HQ started hearing about this little company named Shockwave that dramatically helped Acme customers decide to use the new ABC capability.  Shockwave got invited to give a 1 hour briefing and demo at Acme’s North America sales kickoff meeting.
  7. Following additional success, Acme invited Shockwave into their Platinum Partner program with fees waived.  They installed Shockwave’s product in all 215 field sales offices around the world to enable their sales team to demo the joint functionality whenever needed.  Finally, Acme embedded a small piece of Shockwave technology into the next version of their product to make the experience even better for the customer.  The license fees for this deal soon represented 10% of Shockwave’s revenue and the follow on upsell/cross-sell revenue brought in by the Shockwave reps added another 15%

The above events actually happened.  In fact, I’ve used this “playbook” four or five times with Fortune 500 strategic partners.  Each situation was slightly different, so I’ve blended interesting attributes of them to create a new story for this blog article.

The moral of the story should be obvious.  It is extremely difficult to get the attention of the HQ operation of a very large company.  But something they almost always pay attention to is passionate feedback from their customers and their sales team.  If customers see 1+1=3 value, they will let it be known.  If the large company sales reps figure out a better formula for putting money in their pocket, they will do it over and over again while letting their counterparts and sales management know.  If the large company’s demand generation marketing team figures out a better way to bring quality leads that contribute to bigger/faster sales, they will immediately give it attention.

Here’s a generic sequence of events to evaluate and adjust based on your specific situation and the value you bring your prospective strategic partner:

  1. Close a deal, then ask the customer who their sales rep is from _____ (the partner company you think you bring value to)
  2. Let the sales rep know you just closed a deal in one of their accounts and describe the value you just brought him/her.  (Confirm the value, otherwise you either need to start over with a different customer or you need to reassess the value you can bring this partner)
  3. Get introductions to more of that sale rep’s customers and close deals to firmly solidify the value
  4. Get the rep to introduce you to the other sales reps in his/her office or territory.  Repeat the steps above in these additional customer accounts.
  5. Get an introduction to the sales manager or director.  Communicate the value you’re bringing to his/her sales region.
  6. Gain commitment to do a lunch & learn session in their sales office or participate in the next weekly sales staff conference call.  Keep it short and focused on the value you can bring them, not the other way around.
  7. Provide a couple of Powerpoint slides on your solution to be included in the sales reps’ standard customer briefing presentation.  Their headquarter organization won’t like this but sales reps will do whatever it takes to put the most money in their pocket.
  8. Ask to participate in some local, field marketing events with your prospective partner (seminars, happy hours, etc)

If you and the other sales reps in your company are able to make it to step 6 or beyond, I would be amazed if someone from their headquarter organization doesn’t proactively reach out for a conversation.  Now the balance of negotiating power has shifted in your direction.

Again, figure out how to create synergistic value in the field (customers, channel partners, sales reps) and then drop bread crumbs in the right places so that your prospective strategic alliance partner comes after you.  I once heard Mike Maples Sr. say “a truly strategic partner is one that needs your solution as much, or more, than you need their money and influence”.  If you’re really lucky, the partner will show their high interest by uttering the “exclusivity” word (see related article titled “Exclusivity – Run Away of Embrace?”).  At that moment you really have them where you want them.

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Author: Gordon Daugherty

Over the past 15 years Gordon has seen nearly 1,000 startup pitches, advised more than 200 entrepreneurs and been involved with raising over $45M in growth and venture capital. Throughout his 28 year career in high tech, serving twice as President and three times as CMO, Gordon has both an IPO and a $200M acquisition exit under his belt. Now his emphasis is purely focused on helping startups and early stage tech companies. Through his Shockwave Innovations advisory practice and as Managing Director for Austin’s Capital Factory startup accelerator, Gordon is an active angel investor, VC and startup advisor.

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