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What to Know Before You Meet to Negotiate A Strategic Partnership

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Strategic Partnership Series

What Is a Strategic Partnership?

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When two business parties agree to build something they can build better together than they can build alone, you have a strategic partnership. The advantage of strategic partnerships is that partners can do more with fewer resources. Knowing ahead of time that you’re building the same basic product together means that some parts of it will serve both parties and won’t have be built twice.

Let’s say you are in Fashion and I’m in Fitness. We both have a core audience of recently graduated college students. We might decide to take the place where our Venn Diagram overlaps — Fitness Fashion — to offer a clothing line through your distribution and mine.

That shared “We” on the diagram points to the areas where we can lower costs and increase resources by working in partnership. With two teams working one clothing line or one fashion-fitness event, we’ll enjoy:

  • the ability to split costs and spread the work
  • a wider resource of experience and fresh ideas from another industry
  • a better chance to focus on what we’re good at — if you’re good at staging events and I’m great at marketing, we can specialize and give our best to the team.

A strategic partnership can be formed between any two parties who can align their goals to work together for mutual benefit. How to Identify the Highest Potential Strategic Partnerships tells what I’ve learned about how to identify the right partners. For the strongest partnerships, look for partners who share your values and philosophy of business but have different strengths and skill sets.

Don’t overlook partnerships with the folks in other departments, with your vendors, with potential customers and sponsors. Anyone whose goals align with yours can be a strategic partner. Small partnerships offer the same advantages a big ones and are sometimes easier to manage.

Once you’ve decided a strategic partnership is a good idea.
Do a little preparation before you try to negotiate one.

What Is Negotiation?

Let’s be clear on the question, What is negotiation?. The goal I set for initial strategic partnership meetings is a viable answer:

Negotiation is two parties to agree to a workable and positive outcome.

When you first meet with a potential strategic partner, you should know how you can help each other, but they may not even know you. Even if you do know the folks you’re meeting with, the idea of a partnership may be alien to their usual way of doing business. That means a discussion — a meeting. Few folks have longer than about an hour or so. That’s not much time for negotiating first impressions, new ideas, deals and relationships.

On my trip to London, I had to introduce myself and our business. I needed to make business deals and wanted to establish long-term business relationships. Most importantly, I hoped to start an international network — a collaborative effort — publishers working together to build our businesses in a way that no one publisher could have achieved alone.

What to Know Before You Negotiate Any Strategic Partnership

The best first impression and the best first meeting reflect and demonstrate how you the strategic partnership will work. If you want an open, honest, equal partnership based on mutual growth, structure a meeting that offers the best possibility of that outcome.

Strategic partnerships are relationships not transactions. A first meeting is more than just selling or “going fishing.” Relationships are established by building solid foundations.

Have a Goal, Have a Vision, and Articulate the Fit

  • Set a Realistic First Steps Goal. Great relationships take place in stages. A test case of a process establishes whether the communication has been effective. The first steps goal should be small, set in time, and easily measured.

    Time was tight. Urgency was high. The first goal was to identify, license, and bring back existing products that we could version and get to market quickly.

    In the example of fashion and fitness, it might be that I might ask you to put some of your fitness fashion in my fitness centers for distribution.

  • Have a Vision for the Relationship. Great partnerships collaborate to grow both businesses over a longer term. It’s important to know what the next stage will be.

    When I went to London, the ideal partnership would be with companies from whom we would first buy, and then collaboratively partner on products in the areas where we served similar customers (in non-competitive venues).

    In the fashion-fitness example, the future might be that we collaborate on an exclusive fashion line that is only offered in my fitness centers.

  • Articulate Why the Partnership Is a Good Fit. No partner wants to get the impression that you’re working with them by accident. It’s important to articulate why it’s them not just anyone. It’s important that potential partners in business (as in romance) know that we’re making an informed and conscious decision.

    On my London trip, I could point to products that fit the values of my audiences and how easily I could promote them with over 900,000 color catalogues to my market.

    In the fashion-fitness example, I might point to how our customer groups were the same people, how our companies shared the same values, and how well our skill sets complimented each others’ skill sets.

Preparation was a foundation to solid success of those 8 or 9 days of meetings and the resulting strategic partnerships. Having a goal, having a vision for the relationship and being able to articulate why this partner and not just anyone made it easier to keep the tables even when I walked in the door to discuss strategic partnerships with that would grow both of our businesses.

It started a chain of irresistible events.

Be irresistible.
–ME “Liz” Strauss

Watch for more on negotiating strategic partnerships.

How to Identify the Highest Potential Strategic Partners

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Strategic Partnership Series

The Story

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I sat at the conference room table with two other people. I was the consultant. They were the President and Key Partner of the Investment Firm that Owned the Company. It started as a simple conversation.

We talked about the company’s situation — their revenues were declining by 10% a year. Their product mix wasn’t robust enough to support growth. Attempts at new product had been poorly conceived. Now they were sitting with one potentially successful product that, if left alone, would leave the business in a slow growth, high risk situation.

We talked about product life cycles in their industry. Successful products could expect to grow for 3-5 years. Then the natural decline — the downside of the bell curve — would follow and sales might continue out to year 10.

“What would be your product strategy?” the big boss asked me.
“I’d get on a plane. Go to the U.K. Buy quality product and adapt it to fit the U.S. market.”
“Why the U.K.?” was the next question.
“Because everyone has already been to Australia, and if you don’t get some product to market and earning as fast as you can, it won’t matter what strategy I conceive.”
“You’re going to London,” was the man’s answer.

By the end of the year, I not only went to the U.K., I was hired and I took my first of what became a yearly trip to build and nurture strategic partnerships around the world.

How to Identify the Highest Potential Strategic Partners

The idea of entering a strategic partnership is both intriguing and challenging. Strategic partnerships grow TWO businesses at a faster rate. The ability to share ideas, piggyback resources, decrease costs, and shorten timelines by distributing, versioning, and repackaging can bring a huge increase in ROI even to the smallest business.

But partnerships are tricky to begin with. Choosing the right partner is critical to success. Use these questions to identify the highest potential strategic partners for your business.

  • Who has product we can version for our customers? Would they consider making two versions as they build their next product? Potential strategic partners have to make product appropriate for our market that we might want to distribute. Define that as something for customers who are like ours, only slightly different.

    If we make packaging for boutiques, we might explore companies who makes packaging for department stores, grocery stores, computer stores, jewelry stores, restaurants — the list is huge. We’d be looking for what we might distribute to our boutiques. Those tiny “to go” boxes used by Chinese restaurants might make interesting packaging for boutique candy stores. Would they be willing to print an exclusive series of those boxes in fashion colors, we could sell them to our clients at exclusive prices?

  • Who shares our standards and values? Naturally a partnership needs to agree on what is quality workmanship, what is good service, and how to respond when problems arise. Shared values and standards are foundational to trust. Partners who share our values and standards see the quality in our work, understand our pricing, and trust our choices and decisions.
  • Who is good at what we’re not and needs what we’re good at? Can they extend our brand or strengthen our marketing? Can we shore up their product offers and idea development? A great partner doesn’t look like us. They look like what we’re not.
  • Who has a similar process for approving ideas? My experience over time has taught me to be wary of potential partners with numerous approval stages. A business with the more approval stages will control final decisions. The approval process will break down ideas and steal time.
  • Who sees the value of the partnership immediately? High potential partnerships are agreements between businesses each contributing value to the other business. If a potential partner needs to be converted to the idea, that equality of agreement is missing. It’s wise if we don’t work at making it work. Converts rarely stay converted. We’re likely to end up in something that looks more like a client/vendor relationship.

Great strategic partnerships demonstrate the idea that leaders look to build things that they can’t build alone. We share easier, faster, more meaningful way to reach customers that are just outside our “sweet spot.” We can offer product ideas that we could pursue without partner help.

Have you given strategic partnerships enough thought?

Be irresistible.
–ME “Liz” Strauss

Watch for more on negotiating strategic partnerships.

How to Enlist Awesome Sponsor Partners for Your Projects

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The Art of Finding Great Partners

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As the co-producer of SOBCon, a small event conference, I had to invent a few things about working with sponsors. It took a while to build and explain the value proposition for an event that only offers 150 attendees. Yet, those weren’t just any 150 and my goal was to entice, encourage, and enlist the most awesome sponsors to invest in making it work.

Last week I wrote a blog post about the 6 Cold Truths of Building Business. Two points in that list really apply here. Take a minute to go read it if you haven’t had a chance to; then come back here.

Learning the art of finding great partners might be the biggest value of my business career. I’m delighted to be sharing what I’ve learned about finding great sponsors with you.

How to Enlist Awesome Sponsor Partners for Your Projects

How often does it happen that we get emails often from complete strangers, requesting our time, resources, or money that outline what our investment will do for person asking? For me at least, it happens more and more. It’s a sadly tuned request that only lays out the benefit to the person who is asking. No giver has resources to answer every one-sided request generously — it’s not good friendship or good business. How would the giver ever survive?

Whether you’re looking for a sponsor to send you to a conference or someone to support your newest project … you have to make it in the best interest of the people who might help.

Here’s how to entice, encourage, and enlist awesome sponsor partners for your project.

  1. Do your homework. Know what you have to offer. What about your event or project might be attractive to what sort of partner? Find out how folks value it. Be ready to walk in with an broadly sketched business plan that considers what the exchange of value will be.
  2. Choose your partners. Don’t ask everyone. Look at what you’re doing and find the ideal match for the event or project you’re building. It will be so much easier to connect and collaborate if you can explain to a potential partner how you already see them participating in a meaningful way.
  3. Start with asking them, “what are your goals for the next two quarters?” Then listen. Listening lets offers a chance to adapt what you’re doing to include something that fits the sponsor irresistibly.
  4. When you hear a goal that aligns with yours, suggest how you might be more efficient working together. Negotiation is aligning your project goals with the goals of the folks you want to buy in. Sit on the same side of the table and align what you want with where they want to go.
  5. Last word: Love your sponsors and the sponsors of any event or project that you enjoy! Sponsors make all of our lives easier.Talk about them. Write about them. Personally thank them for all they do for us! Give them lots of reasons to be pleased, proud, and ready to come back. You can bet that helps when we ask them to sponsor again!

A great example might be …
If you want a sponsor to send you to a social media (or SEO or education) conference or workshop, research to find a local business that wants to get involved social media. Ask for a meeting to discuss how you can help each other. You might suggest that they send you to the conference and that in return you spend 4 hours with their team teaching them what you learned.

Even if they don’t have the budget, you’ve made call on a local client who’s interested in social media (or SEO or education). You’ve started to establish yourself as an expert. You may find other business come from it.

Show how doing what you want will make them a hero, get them closer to their goals in ways that are easier, smarter, and more meaningful. Look for how you can make folks feel proud and smart to be a part of what you’re doing, you’ll find someone who wants to invest in what you’re doing.

I’m pleased to say that SOBCon2010 has an incredible list of sponsors, including Intuit, Allstate, ReveNews, Smart Brief of Social Media, and IZEA. Every one of them has been a pleasure to work with. We’ll be announcing a few others soon!

Any questions about getting awesome sponsors?

–ME “Liz” Strauss
Work with Liz on your business!!

Buy the ebook. Learn the art of online conversation.

Register Now!! for sobcon-vmc

What Would Need to Drive a Sexy Yellow Sports Car?

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Context

All our lives we hear this statement.

Tell me what you need.

Do you hear it differently depending on the context?

When Is an Offer an Offer?

In the office supply store, “Tell me what you need.”
“I need a box of gel pens, colored file folders, and a nice notebook.”

In a project meeting, “Tell me what you need.”
“I need three months, two more designers, and a traffic manager.”

Planning a conference, “Tell me what you need.”
“I need a 3200 sq. ft. room with 30 small conference tables and 5 elegant executive chairs at each.”

Simple. Someone asks. We tell them what we require. We find out if our needs are available or if adjustments are in order.

But Then

When someone makes an offer of work to “die” for …

It can sound like this.
Would you like to

  • speak at the palace?
  • travel with your favorite rock band?
  • visit all of your friends around the world?
  • tour the vineyards of Europe?
  • drive this sexy yellow sports car for a year?

“Um, sure!”

“Tell me what you need.”
“I’m there!”

“Tell me what you need.”
“Whatever you’re offering.”

We wouldn’t use that response in the office supply store. “Tell what you need.”
“Whatever you’re offering.”

Not so simple. Not the best answer either.

Reality Check

Someone asks what we require. Do you give up your needs because the offer is cool?

Attractive work doesn’t stay attractive
when you work for less than you need.

Overlook the delightful; see past the golden; think through what it will cost you to explore that delicious adventure. Then you’ll know how to answer. “To drive your sexy yellow sports car for a year, I’d need … ”

Have you ever talked yourself right past the words, “Tell me what you need”?

–ME “Liz” Strauss
Work with Liz!!

Did you buy the ebook yet?

Do it for your blog.

Have You Tried Negotiating from the Same Side of the Table?

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Colgate Palmolive and Metzer Associates!

Monday, at a meeting at the Chicago Executive Summit, Louise asked how the SOBCon conference this year compared to last. She was surprised to hear that in this economy attendance and sponsorship are both tracking higher. We discussed what might be contributing factors:

  • an even more dynamic, high-value content offer
  • the increased interest in social media
  • the longevity of the conference
  • the return to such a fabulous venue — the city and the Summit facilities
  • and one other … more practice at partnering with sponsors.

Last year as I was putting together the sponsor kit for SOBCon08, I faced a marketer’s problem. How do you communicate the value proposition of a conference with a potential of 150 attendees to potential sponsors who would rather be reaching 150,000?

Knowing Where to Sit at the Table

In trying to find the correct sponsor value proposition, I considered the people who come to the conference. This isn’t a room of 150 “ones” — people who never met each other — but rather one 150 — people who are connected to each other. I thought I had it. I could even explain it.

If one evangelist can move a crowd, imagine what a swarm can do.

I’ve been wrong before. On it’s own the idea of a network of 150, didn’t carry much sway in the minds of sponsors who were looking for more concrete value.

I’d been offering a transaction for sale. I have this. This is why it’s of value. I pass the contract across the table. The magic didn’t happen until I metaphorically moved my chair to the other side of the table. It’s easier to make a deal when I sit beside the person I want to make a deal with.

“What are your goals for the next two quarters?”

“How can we configure a part of the conference to help you there? Would doing this work? Suppose we added an interaction like this one?”

From the same side of the table it’s easy find mutual goals and a path where doing business is natural.

This year, I built the conference with flexibility for sponsors goals inside their role as participants. I’m pleased and grateful that as a result I’m announcing that Colgate Palmolive and Metzger Associates have joined our sponsor team.

and

We love all of our sponsors: Wal-mart, Allstate, IttyBiz, BuzzCorps, Blog Catalog, Proforma, One2One Network, Pathable, and Summit Executive Center. And can’t wait for the chance to work at the same table with them and you!

Have you tried negotiating from the same side of the table?

–ME “Liz” Strauss
Work with Liz!!

Buy the ebook.

Register for SOBCon09 NOW!!

See the value of a powerful network!

Pick a Number–Just Make Sure It’s a BIG One

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The First One to Pick a Number

HAS POWER. I found that out last night. It was exciting. Here’s what happened.

Customer Think Logo

In yesterday’s article, Job [and Client] Hunting ala Liz, I added three bits of advice I had learned about negotiating meetings. This was one.

The first one to name a number loses. To me that’s self-explanatory. If I say a number, they’re not going to go higher. If they ask, I usually answer with . . . what the work is worth, let’s talk a little more about what’s involved and what you usually pay for this kind of work.

I found out in less than 2 hours I was wrong. WAY COOL. [Read more…]