After referrals, strategic partnerships are the largest source of new business for founder-led consultancies.
But first, what are those partnerships? The term has been used so much, by so many people, to discuss so many different things, that it has become fuzzy. Almost to the point of being useless.
My definition of a commercial partnership is "a strategic relationship that benefits everyone involved." Consultants who develop the ability to structure and maintain these strategic relationships outperform their peers in business development. They bring more opportunities, money, and visibility to the firm.
The basic idea behind a partnership is to multiply impact. Instead of competing for clients and resources, strategic partners work together so that both win. This is how skilled consultants think of it:
It's a win-win.
If these alliances are that effective to activate pipeline, you would imagine many boutique consulting firms are exploring the idea. Right?
It turns out that, according to this BenchPress report, less than half of the consultancies have tried to implement strategic alliances with referral partners in the 12 months prior to the survey. Most firms have concentrated their marketing efforts on LinkedIn, creating more written content, networking, and email marketing.
Which leads us to the big question: Why? Why is effectiveness not leading marketing strategy?
Different things contribute to this. Many consultancies might not be aware of this information. The way partners and advisors lead and manage their firms - their strategy, operations, and financial capabilities - also plays a role. And the difficulty of creating powerful, win-win commercial partnerships is often not discussed.
But something few growth advisors openly discuss, and you and other consultancy founders would benefit from, is adding context to the stage each business is in. Partnerships require clarity and effectiveness.
I believe a big reason why most consultants don't even try to implement strategic partnerships is that they're not ready for it yet. There are countless ways, strategies, and paths you can follow to grow your business - but the journey, or the sequence of activities that generate that growth, matters.
You can't just jump into a lucrative partnership if you have a poor positioning, no credibility, or a broken business model.
If you try to create an offering but don't know which market you're in, it will never sell. If you try to build an audience without sharing or publishing any of your ideas, you won't go far. And if you don't know how to price your work, how exactly would you benefit from selling more?
I remembered witnessing a "data-driven" marketer lecturing a consultancy partner for putting written content and networking first in his business development plan. "Look at the industry numbers, you are not prioritizing the best-performing channel!" I laughed out loud. It was clear he had no idea what he was talking about.
Strategic partnerships can bring huge growth to your consulting firm, but they won't succeed until you have the other pieces of your business in place. Sometimes you need to forget about the benchmarks, investing in marketing initiatives that seem less effective in the short term. These are often stepping stones to future growth.
Before considering strategic partnerships, focus on having the right foundations in place.
You can partner with individuals or organizations. Either way, show them how they'll benefit from the relationship. Stay ahead by providing more value then you receive. Some partnerships are so important that it's best to have a formal agreement, maybe even including a commission. You might even establish goals on the metrics - number of introductions, volume of work sold, and so on. I usually recommend starting slow, with two or three introductions in each direction.
As with a new hire, some partner relationships will work out and some won't. Focus on the most valuable ones and invest in them. Meet frequently with your partners to make sure you're communicating well. Keep them apprised of new developments in your business, and listen to what's going on with them. These tactical conversations will spark ideas for new connections and new projects.
Cross-industry research by Alliance Accelerator found that up to 80% of alliances established without careful planning and implementation are likely to fail. But 56% of boutique consulting partners said that, when they made alliances work, they were the most or one of the most important channels of value creation.
Get the basics rights first and then start planning for partnerships. It pays off if you do it right.
Source: Alliance Accelerator
Who would you partner with if the agreement could never be undone?
As some of you know, I've had a few partners in the past. A couple of them have been incredible. But the vast majority were not.
This is what I learned so far:
Looking back, I see that my first partnerships were a reflection of my lack of self-confidence and poor mindset as a founder. I believed I needed someone to bring more value to clients because I wasn't bringing it enough myself. That's not how you want to think.
Treat every partnership deal as if you can’t get out of it. This will properly tighten up your filter. Beware opportunists and don’t be an opportunist yourself.
You don't need many partnerships. Just the right ones.