Breaking the Feast or Famine Cycle: Part 5
In my last post I briefly referenced Strategic Partnerships (SP) as another leveraging tactic to build your business. This is a lesson I learned early in my entrepreneurial incarnation, thankfully! It’s like networking on steroids, a true force multiplier. Strategic Partners are your “go-to” people for specific expertise. You may know a number of people who could provide a solution to a client’s need outside your area of expertise. However, your SP should be at the top of that list. They are super referrals and your most trusted service providers. They enhance the value of your brand and if managed properly, strengthen your bond with the client. After all, we are known by the quality of our work and with whom we are associated.
So what makes a good Strategic Partner? SPs are people who serve the same target market but are not competitors. Or, they could be competitors who serve a different target market, an indirect competitor. They work in a market that you do not plan to penetrate, but would welcome opportunistic income. In my case, an indirect competitor and a viable SP is another executive recruiter who might specialize in global manufacturing or maybe, healthcare. Or someone who works in the same industry segment but places lower than C-level talent. Yes, this is another executive recruiter, but it is unlikely that we would ever compete for the same search. We both come across candidates and prospective clients who we cannot help due to our lack of expertise in their market segment. Certainly, we would like to help those folks and earn a fee; however, the learning curve to compete in that market would be cost prohibitive. A SP is the perfect solution.
The SPs I have developed grew out of referrals from my network. My network pointed me to these folks, initially as a resource for searches. In my work, as with any consultant, I learn a lot about my client’s needs. It is only natural to want to help them solve problems and become more successful. Their success will guarantee a long term relationship and continued success for my brand. I look at this kind of support as value-added. So, having the ability to refer additional resources to help one’s client becomes a win-win. When including your SP, it is a win-win-win.
Working together over time, we developed trust, leading to a more formalized relationship. In one case I needed to help a client find a consultant to support program development under the direction of the new VP Training & Development that I had placed. I received an excellent referral that led to my SP connection, with Morreen Rukin Bayles of Creative Restaurant Solutions. Two of my Strategic Partnerships grew out of alumni connections.
Strategic Partnerships are more than just a value-added service you provide your clients. These relationships are revenue generators. When you enter into an SP you are formalizing your relationship into a line of business. In exchange for being the go-to person for their services you are entitled to referral fee. This makes sense as there is minimal, if any acquisition cost incurred by your SP. You become a marketing resource for your SP and should be compensated, just as your SP would be compensated if she brought you a business deal. As in any business relationship it is important to document your agreement. The type of agreement you choose will be driven by the potential gain and risk in the transaction. At the very least you will want to have a letter agreement on record. A more complicated arrangement may require a more formal contract so you should consult your attorney.
A final thought about quality control. It is still your brand at risk. You need to be careful when selecting your SPs as your brand will become tied to theirs. The wrong partner will introduce serious risk into your business. You must exercise oversight of their work. Check in with your client on a regular basis to secure feedback as to their performance. If there are issues, you must to be alerted early on so that you can help facilitate corrective action. Ultimately, you have a brand to protect so you must be engaged.
To break the feast or famine cycle, be sure to have Strategic Partners on your team!
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Jim Weber, President
New Century Dynamics Executive Search