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June 8, 2020

How Your Partner Business Proposition Gives You an Advantage

The essential first step to partner recruiting is to strengthen your partner business proposition. The partner business proposition is the value the channel receives from selling your company’s products and solutions. Forming a strong partner business proposition is a key part of improving your channel recruitment.

You are probably familiar with the concept of a value proposition the compelling statement detailing the value of a product or service relative to the competition. Almost every company spends a good amount of time fine-tuning its value proposition.

What is a partner business proposition?

A partner business proposition is why a partner should sell your product or service instead of your competitors. Our experience is that the same companies who fine-tune their value proposition, don’t spend nearly enough time thinking through their partner business proposition. In fact, often this statement isn’t even written down in a formal way that ensures a consistent, deliberate, and repeatable message with partners.

A good value business proposition has three elements: momentum, relationships, and economics. 

First, how compelling is your market momentum? Second, what type of relationship does that partner have with you? Third, what are the economics of the sale?

You should also understand these questions are hierarchical. If customers reject your product, partners will be reluctant to sell it even if they like you and can make money selling it. Likewise, they may opportunistically sell something they can make good money on, but they won’t focus on it if they distrust the vendor.

Let’s spend a little time understanding what goes into each area.

Momentum

Momentum is built on three components: market share, customer demand, and technology leadership. While you don’t need to have leadership in all three, you do need to think about showing leadership in at least one. If you are the market share leader, you are in a good position. If not, then you need to demonstrate that you have customer buzz and excitement or that you have a more innovative, better technology.

Relationships

Relationships are comprised of three components: fit, reputation and experience. You also need to show strength in one of these areas. Fit is how well your offering fits into their business. Partners don’t like changing their business model. If they need to, then that can be a high barrier. Also, it will hurt your business if you are tough to work with, have reputation of poaching plum accounts, taking business direct, or having unclear rules of engagement.

Economics

Lastly is economics. This is the margin partners make selling your product, the costs of doing business with you and how your programmatic benefits compare with the competition.

When building out these three areas keep the following in mind: 

1. Each of these areas can be quantified and measured against your competition. You can create a competitive roadmap against other vendors that show your specific strengths and weaknesses. This lets you gauge which competitor is the most vulnerable. Sometimes you are better targeting a number 2 or number 3 vendor rather than a top vendor.

2. You can offset areas of weakness with specific recruiting tactics. If your margin isn't the best, perhaps an incentive program or special pricing can make the difference. If fit is off, offer free training or architectural assistance. If it’s lack of understanding of customer demand for your product, use managed leads to show customers are asking for your product.

3. Document your business proposition in your partner marketing. Build it out as part of the marketing and sales collateral that is used by your field reps to tell your story. Don’t relegate it to an afterthought.

The key is to quantify your position, craft your message and consistently bring it to the forefront of any recruiting conversation.

Understanding competitor partner business propositions

It is unusual for a single company to have strength in all areas. All companies will have soft areas within their proposition with some channel segments.

Understanding your company’s strengths and weaknesses is key. But not enough. You must also understand your competitor’s business proposition. A truly effective partner business proposition assessment benchmarks a company’s business proposition relative to its key competitors with each targeted partner segment. This will avoid costly missteps in channel management.

  • If you have poor market momentum, then you must either reposition your core offering in the marketplace or greatly enhance the economics or joint alignment to offset your market position.
  • If you are recruiting solution providers with poor alignment, your targeting or messaging is ineffective and your efforts are unlikely to yield the desired results.
  • If your channel economics are weak with partners but better than your competition, then running rebates or other margin programs may not add much to your business proposition, but will cost you profit.

Tuning your competitive position and conducting regular business proposition assessments is critical to driving effectiveness in your channel management.

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Richard Flynn

Richard Flynn is a recognized leader in channels and go-to-market business strategy and execution. A Founding Partner and Chief Marketing Officer for The Spur Group, Richard has over 25 years of go-to-market experience in sales transformation, channel management, and customer marketing.