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When creating strategic partnerships, you must first understand your own why. Is it for growth in your existing market, entering a new market, reducing churn or gaining the “trust” of the end buyer by partnering with a well-known name?
This clarity purpose drives everything that follows. I have learned a lot from my journey in different partnerships, from recruiting to educating strategic partners. While signing a deal is the goal, looking at long-term, mutually beneficial relationships that can highlight the capabilities of both parties is a whole other level to consider.
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Choosing the ideal strategic partner
When you identify and choose ideal strategic partnersI focus on alignment, mutual value and long-term potential. First, it is essential to ensure that our missions and goals are aligned. Only when both parties strive towards the same vision will a strategic relationship flourish.
If our values don't match, our collaboration is probably more of a transient transactional relationship than a long-term partnership. For example, I ask myself: Do they sell a complementary solution that makes my solution more powerful? Do our combined solutions make us “sticker” together? Are we talking to the same “buyer” on the other side? These questions help ensure that we are really moving forward in an efficient manner rather than just having a simple business deal.
For example, we successfully established partnerships with some of the biggest names in the dental equipment distribution industry. As we grew in the dental service organization (DSO) space, clients often asked if we worked with companies like Henry Schein, Darby, or Patterson.
By encouraging customers to ask their distributor representatives the same question on our behalf, we were able to attract the attention of these larger companies. Each new client win strengthened our presence, ultimately giving us a seat at the table with these industry leaders. This strategy built our momentum and strengthened our brand within the market.
Effective communication efforts
Starting partnerships isn't about making cold calls and hoping something works out. My approach has always been about customization and providing value ahead. To really have an effective partnership, you need to have a sense of market pull or demand for your product. This allows you to facilitate and start a conversation.
I also look for partners who bring complementary strengths to the table—skills or assets that we may not have in-house but can elevate our collective offerings. This could be industry expertise, market access or unique technology. Partnerships thrive when both parties offer something unique that enhances the other's business.
The question is always: how much trust and reliability do they have their customers with them? It is important to assess their reputation – are they known for great customer experiences and do they get good feedback from the industry? Their credibility can boost our solution when integrated.
Negotiating mutually beneficial terms
In any partnership, it is essential to create a win/win scenario. There is a common phrase that “a good compromise is when both parties are unhappy”. I believe that when you are working on a partnership arrangement, this is a sign of a potentially bad fit. You should never pursue partnerships where this balance cannot be established. I provide one transparent exchange of value determining what each side offers. When one party believes they are offering more than the other, the probability of imbalance and resentment would definitely hinder any progress. The ideal approach is openness throughout the negotiations. I lay out our goals, what we need and where we are flexible, encouraging the other party to do the same. The meaning of why after each term ensures that we create fair, future-focused terms.
Finally, clear expectations and accountability are essential. Although this is hardly the case, it is natural to assume that mutual warmth will help solve any problem. Establishing formal agreements with important performance criteria ensures that both parties know what is expected and helps eliminate later errors in interpretation.
What NOT to do when finding a partner
First of all, avoid creating a partnership just for the purpose of expansion unless you have identified an advantage for the other party. Merging brand names alone is not reason enough. Unless you're also a major player in the space, you're likely not going to occupy much of their thinking about how to make you successful unless you're part of a publicly announced strategic initiative or put at work to be top of mind.
Another common mistake is to focus only on the business benefits while ignoring them cultural compatibility. A partnership may look great on paper – complementary skills, access to new markets or mutual benefits – but if work styles and values don't match, it will be difficult to execute smoothly. For example, if you change the onboarding experience after the sale, the communication with the customer or even the way employees feel about working in their company, it will create problems that can hinder success.
Finally, don't leave things to chance or assume you're on the same page. Discuss and explain the techniques and any criteria that may be included in the agreement. Overcommunicate if necessary.
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Quality always trumps quantity in partnerships
We have many partnerships across the market, about 15 now. I learned that assuming you are the most important thing to the new partner and everyone is excited about selling your combined solution is another recipe for disaster.
Remember that some are uncomfortable selling something they don't fully understand and won't pull your new tool out of the toolbox. They'd rather not “look dumb” in front of a customer. This happens in many partnerships until you can call a friend and guide them until comfort is established.