Five Steps to Building Strategic Partnerships That Drive Revenue
Building strategic partnerships is a critical pillar of growth for companies today. However, creating successful partnerships that drive tangible revenue requires much more than just signing an agreement. It demands thoughtful planning, solid execution, and securing executive alignment across organizations.
Last year, Deven Revel, Head of Channel Partnerships at Hightouch, hosted a panel with Ashley Taylor, Director of Integration Partnerships at G2, and Chris Lavoie, Business and Development Partnerships at Arrive.
We’ll share a proven framework for planning, managing, and building strategic partnerships to maximize revenue potential based on insights from our industry leaders.
Step 1: Align on Vision and Secure Executive Buy-In
Building strategic partnerships without leadership support and alignment is like trying to paddle a canoe without any oars. The partnership may stay afloat for a while, but it will eventually falter and fail to reach its destination.
Importance of Leadership Support
Executive buy-in sets the tone for building a culture that values partnerships across the organization. As Taylor noted during the discussion:
“One of the most important things is a top-down culture that is going to support the partnerships effort and really understanding whole organization alignment of what the expectation and the goals are around what partnerships you’re going to deliver.”
Without leadership emphasis and resource allocation, a partnership program will lack the focus and fuel required to succeed.
Defining Joint Goals
Before committing to a partnership, organizations must define their shared vision and revenue goals. This involves:
- Quantifying existing partnerships to identify needs and gaps
- Setting specific revenue expectations for new partnerships
- Gaining agreement on outcomes across all levels
Getting alignment on measurable revenue impact is crucial. Otherwise, partnerships become vague vanity projects that fail to deliver results.
Step 2: Tailor Partnership Structure to Growth Stage
Getting alignment on vision is just the first step. Partnership strategy and structure must also align with the company’s current growth stage. Otherwise, the partnership will falter.
Early Stage Flexibility
For early-stage companies, partnerships with other agile startups can work well. There is openness to experimentation on both sides.
“If you are an early-stage company, then it’s probably best to partner with other early-stage companies,” Lavoie said
With less bureaucracy, these partnerships can start small and build incrementally. Short-term goals validate the potential before committing more resources.
Enterprise Complexity
Strategic partnerships often have long sales cycles and legal considerations at the enterprise level. Revenue impact may be indirect, like influencing sales via increased brand visibility.
“While being listed in the marketplace of a larger company may not directly impact revenue with leads, it can significantly influence revenue on the sales side due to the boost in public perception and credibility,” Taylor said.
With more moving parts, forecasting, and tight alignment are critical for enterprise partnerships.
The growth stage dictates strategic partnerships’ tempo, flexibility, and revenue model. Evaluating where your company sits on the maturity spectrum allows you to shape partnerships for success.
Step 3: Build a Strong Foundation
Building a solid foundation is crucial once leadership is aligned and the partnership structure is defined. This foundation establishes the value exchange and ensures the partnership can scale successfully.
Identify Mutual Value
Partnerships flounder without clear value delivered to both sides. Lavoie said you “need to be in a position where you can actually add value to partners.”
Potential sources of mutual value include:
- Co-marketing campaigns: Collaborative marketing efforts aimed at generating a pipeline of leads and prospects. Partners can leverage each other’s resources and reach a wider audience by joining forces.
- Technical integrations: Seamless integration of systems and tools to streamline customer workflows. This facilitates a more efficient and effective customer experience, enhancing satisfaction and promoting loyalty.
- Joint products or solutions: Combining expertise and resources to develop and offer new products or solutions that address market needs. This enables partners to tap into new markets and expand their customer base.
- Partner directories: These directories offer a platform for increased visibility and exposure, allowing potential customers to find and connect with partners easily.
Defining the initial value exchange establishes a solid basis for growth.
Stakeholder Management
Internal teams are critical stakeholders in any partnership. Failing to manage expectations with product, sales, marketing, and support teams will bog down partnership progress.
“One thing we’ve learned the hard way is making sure that we’re really treating internal stakeholders like stakeholders. They’re a part of the equation as well,” Lavoie said.
Get buy-in from internal players early on. Set clear guidelines for partnership roles and responsibilities. With stakeholders aligned, partnerships can flourish.
Laying a strong foundation establishes trust and value on both sides. This creates fertile ground for the partnership to take root and grow.
Step 4: Prioritize and Protect Resources
The most strategic partnerships still require tough decisions on resourcing. With limited budgets and bandwidth, companies must allocate resources wisely.
Tier Partnerships
Not all partnerships hold equal revenue potential. Conducting diligence to segment partners into tiers allows more intelligent resource allocation.
Invest more in high-potential partnerships poised to deliver significant pipelines and profit – shortlist based on revenue potential and strategic fit.
Balance Give and Take
In an ideal partnership, equal value should flow both ways. However, imbalanced partnerships are common, as noted by Taylor.
During the initial foundation-building phase, it becomes apparent that there may be an imbalance in the direction in which leads flow due to the structure of integration or go-to-market motions.
Manage imbalanced lead flows through transparency and saying no when needed. Don’t overextend resources based on lopsided value. As with any relationship, partnerships require give-and-take. Set boundaries to protect your resources when needed.
Step 5: Measure and Refine
Partnerships are living, evolving relationships. Consistent measurement provides insight to refine the partnership for optimal growth.
Key Leading Indicators
Track metrics that act as leading indicators of partnership health and revenue potential:
- Activity metrics: Number of co-marketing campaigns launched, joint event participation, and integration adoption rates. Higher levels of collaborative activity indicate better engagement.
- Short-term revenue: Actual pipeline and deals driven by partnership initiatives. Near-term income wins validate the partnership’s potential.
- Expansion opportunities: New initiatives proposed for deeper integration, additional joint products, or expanded territories. The growing scope shows future potential.
Monitoring these metrics shines a spotlight on high-performing areas to double down on. Leading indicators give you the foresight to optimize proactively.
Creating an Optimization Loop
To continuously improve partnership performance, build in an optimization feedback loop including:
- Quarterly partner business reviews: Assess what’s working well and what’s not. Celebrate wins and discuss areas needing alignment.
- Dynamic resource allocation: Increase resources for high-potential partnerships demonstrating solid traction. Pull back resources from stagnant partnerships.
- Real-time course correction: Don’t let small misalignments fester. Have open conversations to address issues quickly before they balloon.
- Iterative goal setting: Establish new 30/60/90-day goals based on emerging opportunities. Extend goals showing progress.
This disciplined approach turns partnership management into a cycle of constant refinement rather than a set-it-and-forget-it model.
Measurements provide the fuel for data-driven partnership optimization. Quantify value frequently to focus on what matters most.
Conclusion
Building strategic partnerships is a vital growth lever that often fails to deliver expected revenue. You can expect to build thriving partnerships by following the best practices outlined by our experts here.
This framework requires upfront planning and communication. But the diligence pays dividends in partnerships that fuel measurable revenue growth rather than simply vanity metrics.
With leadership support, strategic construction, and ongoing optimization, your next partnership can steer significant strategic value rather than spinning aimlessly. Careful navigation builds partnerships that accelerate growth.
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