The Piggy Back Theory: Part One – The Approach
Before I started shoestring.com.au and the hardcopy magazine that preceded it, I attended my first Young Entrepreneurs Unconvention. At that stage, I didn’t know about the “startup scene” in the way that I know it today, I had no connections and NO idea who I was going to even interview for the bloody magazine.
When Jack Delosa was up on stage talking he started to explain growing a business through strategic partnerships, it instantly caught my attention and I very quickly realised that the only way to get the word out about my idea was by creating relationships with people that were going to give me leverage.
Since that Unconvention and launching Shoe String Media I have created well over 60 strategic relationships for our business that have helped us [a] grow readership [b] build myself a profile in the space [c] create lead generation and [d] close sales – I have developed this method of partnering into a theory and training strategy which I like to call “The Piggy Back Theory” – Over the next 12 weeks I will be taking you through a step by step process on how you can implement the exact same strategy into your own business – it DOES work for everyone but only if you do it the RIGHT way. So many people think they know what they are doing, but are actually driving away potential leverage instead of attracting it.
Part One – The Approach
Because you are a self centred entrepreneur and all you can think about it how much money this new relationship may drive into your business, you will fail. You see, the person you are approaching has something you NEED which is customers, a database or a service that is critical to you being successful. You on the other hand have nothing they need, you are a startup, nobody knows you, you have no money coming in, you don’t have any customers, partnering with you is going to do nothing for their business, unless of course you give them something they WANT.
Before the Approach
You can not just identify someone that has a customer base that is the same as the one you are targeting and then go in unprepared, they have customers for a reason – they are a successful business. Before you contact anyone, you need to do an exercise:
What are the strengths of your business? If you have a similar customer base, than you will most likely have a product or service that will help the business you are approaching for a strategic partnership. Before you sit down with someone for a meeting, have a good look at you and your startup and what you can ACTUALLY offer them, make sure your strengths are achievable with the limited resources that you have. If they are not and you over promise people, your partnership will come crashing down around you.
What are their needs? Most of this will be established during the process of sitting down and having a conversation, however there is quite a bit of research that can be done prior to the face to face. Scan their website thoroughly; look at the services they offer – is there anything your business can do to enhance this offering? Look at the team and about us sections – this will give you an idea of their goals and mission, it will also give you an idea on how to approach them. Most importantly, look at the careers section and search for the business on the jobs sections on Seek and Linkedin – If they are hiring it is because they are usually growing the business, this will allow you to ask key questions during your meeting. For example if XYZ company are hiring a business development manager to work across the Sydney Region, this is obviously a key area and location they are targeting now and in the future, you can start to position yourself to be an aid to them in that area ahead of time.
Forget the Win – Win approach, when you are a startup your partnership needs to represent 2 wins to them for the 1 win they give to you. This is important that you accept and are comfortable with the situation because it means that you will be putting slightly more effort into the partnership than the other side – and so you should, strategic partnerships are not handouts – they are working relationships with benefits and consequences.
Set up the Meeting
Once you are satisfied with your research, it is now time to approach the organisation for a discussion. But who should you be opening up discussions with? Do this exercise to identify where your startup best fits into their food chain.
Business is simple, and the bigger the company you are approaching about a partnership, the more simple you should keep your approach. In my experience across SMB’s and Corporates there are always four things that everyone is looking to do.  Improve the services they provide to their customers  Make more money and increase revenue  enhance their marketing efforts without spending more and  solve problems that have arisen within the business.
Get a piece of paper, or use a mind map, create a visual representation for yourself of exactly what it is your company can do for them, use the above categories.At the end of the activity if you don’t know the answers to this – you should not go ahead with the meeting – you have nothing to offer them of value. You are one of a million startups all wanting the same thing – customers. Why would someone give you access to theirs if you don’t even know what your business can do for them?
Executing the Meeting
Most people think that there is a massive difference between a sales meeting and a strategic partnership meeting – this is incorrect. Both meetings are closing a sale, the only difference is this one is more critical as it for the purpose of building a database of customers for your business, therefore you need to sell them it is a good idea for them to effectively act as your lead generation or sales channel.
The first rule in sales. Never assume. You will always be wrong, because you will mentally block yourself off from hearing triggers that may mean bigger opportunities than the one you are vying for. Start your meetings by giving an overview of yourself and your company, then ask them to tell you a little about them and their role in the organisation. It is important to be up front with people – there is nothing worse than pretending you are not going to sell someone something, if you are open about it, they will be more receptive to it – because they have had time to accept it before you pitch them.
Last week, I had a meeting with Contiki to discuss a strategic partnership with another one of our publications, when I set up the meeting I was open about my purpose for the meeting, when I had the meeting – I opened with “I want to look at ways our site and Contiki can work together strategically in 2013, without either of us having to spend a lot of money” – They knew what my end game was and that we would be working to budget straight off the bat – it allowed us to have a very good strategic conversation, I was able to identify how I could help the marketing side of things in a number of ways.
The next stage is to suggest [high level] solutions, based on the conversation that you have had, pick two. I personally like to concentrate on something you can do that will make them more money [a return on investment in a partnership is always going to grab attention] and then I usually go the marketing route, this is because my business is in media, I have the reach and resources at my disposal to complete these types of activities at limited cost to me and my business. Depending on your business, you will have a particular area out of the four that best suits what you are doing too.
Soft close them, “is this something you are keen to explore further?” – “would you like me to put you something together to show __________ what the investment and return would look like?”
Once you have got a commitment to submitting a proposal, it is important to discuss what your end goal looks like, if they have not already asked you. Remember 2 wins for them 1 win for you. Be open about what you want and always be reasonable. For instance you would ask them to promote your services to their customer base, not for direct access to their customer list.
In Part two we will be going over constructing a proper strategic partnership proposal, what to put in their, why you should have it in writing and how to set our expectations from the outset.
This Thursday our first “Strategic Partnership Opportunities” email goes out, it has a list of companies that are looking for strategic partnerships and those that we have identified that may be good to approach in relation to partnerships. Fill in your details below to make sure you get a copy.