Optimize Your Return on Relationship: Building Value Creating Alliances

Return

At one time many alliance managers thought of themselves as relationship managers; but to be relevant to their organization’s business, they need to think of themselves as performance managers. Gone are the days when merely a good relationship could be considered the primary goal of alliance management. While a good relationship can be an important factor in alliance teams reaching their goals, by itself it is not a means of achieving alliance objectives. If your alliance is aligned to strategic objectives of the organization, then performance to those objectives is the true measure of an alliance.

How often do partner managers or their management focus only on: “What do we get out of the deal?” While it is important as good business managers that we understand the return on investment on our partnerships and alliances, it is also important to understand that viable, sustainable partnerships are based on a more complex value proposition. They are not just a deal. A winning value proposition isn’t just a two-way proposition. It is a three-way proposition – one that includes not only your partner, but also your joint customer. In order to optimize your Return on Relationship™, you must understand how you are creating value for customers, your partner, as well as for your organization Valued Partners.

Successful go-to-market alliances start with a compelling JOINT value proposition that addresses the customer buying motivations first. Creating value propositions for all stakeholders in the partnership creates not just a WIN-WIN partnership, but a WIN-WIN-WIN where the customer wins, too. This value triangle is often expressed as “partner math,” where 1+ 1 > 3. Customer value ultimately translates into value for partners in creating product or service opportunities and new sales opportunities.

We have conducted research into hundreds of alliances through client engagements with companies such as Cisco, Adobe, PayPal, and IBM. In our case study research, we compared the value propositions of very successful alliances and those that yielded disappointing results. We found that successful alliances defined and tracked partner value in three dimensions: Solution, Financial, and Sales/Marketing. The less successful cases were found to be lacking in one of the three areas

Solution value which creates a compelling reason to buy for your customers,

Financial value which creates a compelling reason to partner, and

Sales and Marketing value which creates a compelling reason to sell and drives sales engagement.

Look for our other articles that address Customer Value Creation and go deeper into each aspect of creating Partner Value.

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