Collaborative sales have become the standard way of doing business and generating revenue growth for many companies. Collaborative sales through strategic alliances are more elaborate strategies to find new channels to market, augment capabilities and grow revenues.The sales function grew exponentially after the second world war in North America and later in Europe. The way “modern” sales developed was approaching the market as a numbers game. The assumption was that if you made a great canned pitch to as many people as possible in the shortest amount of time possible, you would achieve your sales goals.
The best sales people made effective small talk and this was the version of relationship building for an entire generation of sales representatives. They worked hard and made the pitch over and over and got very good at treating objections and closing the transaction.
Over the last three decades, sales has become more complex, sales cycles have lengthened and the lone wolf commando approach to selling is becoming obsolete for many firms. In today’s sales environment, the sales executive must foster referrals and repeat business. He/she must truly understand the needs of his/her customer and design creative collaborative solutions to meet those needs.
Sales collaboration is often more effective than the one-man-show. No one salesperson can correlate all the information, manage all the contacts, and develop all the insights that a coordinated team can in a long, more sophisticated sales process.
Collaborative solutions selling (pull model), marshaling resources within one’s own organization is already a much more complex model than the transactional product sales approach of the last fifty years (push model). Collaborative sales through strategic alliances adds another layer of complexity, but also has the potential to create deeper value for the end customer, the sales team and the organizations who practice collaborative selling through strategic alliances.
Collaborative sales through strategic alliances can be tricky to design and execute. Frustration and exasperation can set in and fester. Missed sales opportunities can be blamed on outside partners and their inability “to make it happen”. But, if done properly with business acumen and professional guidance. the juice is definitely worth the squeeze. The volume and nature of the opportunities will not only increase, but the key concept of earning the right to even bid on larger projects / accounts will increase exponentially.
Here are some recommendations learned overs years of practice to make collaborative sales through strategic alliances a successful and sustainable business proposition:
- Plan the work and work the plan – designing a complete sales alliance life-cycle is the first step, but beyond partner selection and alliance launch, the sales engines in both firms need to be synchronized (cycles, calendars, sales approach to markets. go-to-market strategies…). Most often, success requires professional alliance strategic account planning acumen and experience.
- Get the contracts right – the degree of formalism and granularity in crafting the alliance agreement is a key success factor. The legal review should come at the end of the process, otherwise the agreements tend to get caught up in overly detailed and complex legalese. Especially for small to mid-sized firms, remember KISS (keep it short and simple).
- Do more than just splitting commissions – the first move many sales managers make towards encouraging collaboration is to divide commissions among the salespeople who worked on the deal. In practice, though, splitting commissions always ends up in a vicious circle of compensation gamesmanship, and we are all familiar with the ability of sales professions to “game the system.” It is preferable to set up a creative give-get model, and monitor the alliance relationship to make sure what goes around, comes (back) around. The overall “pie” and corresponding sales commissions should grow.
- Build a common language – every company’s sales culture is a little different. The way each firm hires, trains and sends its sales executives out into the market, with tools and methods specific to its own culture, is different. Not surprisingly, a company’s sales culture most often evolves over time, originating from the style of the founder(s). Making sure the terminology is clearly defined and shared across the sales organizations can make the sales teams collaborative efforts go much more smoothly.
- Go-to-market together – although this seems self-evident, often the collaboration is simply lead sharing or deal sharing where one firm is the prime and the partner is “thrown a bone” in the form of a minor, sometimes insignificant add-on. Years of collaborative alliance sales experience has shown us the importance of actually crafting the proposal together, going to see the client together, closing together. This collaborative sales effort is laborious, especially if it spans boarders , languages and cultures, but the learning process is an important investment in future success and augmenting sales capabilities.
- Get your executive leadership involved – sometimes top management will launch a collaborative project and then go back to business as usual. This is almost always a mistake. Get the leadership teams together on the phone or for a meeting or better yet an evening meal. Socializing the sales alliance relationship is neither a waste of time nor a distraction. Furthermore, business leaders often enjoy the opportunity to discuss one-to-one with their peers, and it will be much easier to work with any escalation process when the deal gets stuck because the C-suite players already know and trust each other.
- Strive for annuity revenue streams – long, complicated solutions selling is an arduous process. When you add the additional complexity of an outside partner, the perception can be that collaboration costs more in time and energy than it reaps in benefits and learning. This can be a valid point, especially if the sales process is simple and transactional in nature. One way to gain a strong return on the necessary time investment to make collaborative sales through strategic alliances work, is to strive for more annuity sales, and create an ecosystem with the client and the other partner providers. This is especially important for longer, more complex sales cycles.
Generally speaking, collaborative sales models will replace and render obsolete the traditional sales models in all complex solutions offerings, especially as the lines between products and services becomes more blurry (everything as a service). This means sales departments will need to be re-engineered and the key learnings from alliance excellence will need to be incorporated in all aspects of the sales function: new job descriptions, skills training, pipeline reports, compensation systems, territory logic, management, etc.
Collaborative sales through strategic alliances are just beginning to become the new way of working in many industries. Intelligent ecosystem development within the sales & marketing functions – design, build and run – will be a key factor of sales excellence going forward.