Go-To-Market Partnerships: Driving Innovation Through Collaboration (Forbes)

Go-to-market (GTM) partnerships are an essential part of value creation and the innovation ecosystem. Strategic, well-executed GTM partnerships create synergies, streamline technology integrations and bring cutting-edge solutions to a global market.

It can be a challenge to build enduring partnerships that generate a return on investment (ROI). Over the course of my career, I have worked with numerous startups and scaled my own—and observed firsthand the benefits and difficulties of enabling GTM partnerships.

Here’s how companies can find, structure and maintain valuable and resilient partnerships.

Understanding Go-To-Market Partnership Models

Many companies use “channel” as a catch-all term for GTM partnerships, but there are several types and structures with varying dynamics.

In co-marketing partnerships, companies market each other’s products or services. This often involves co-branded marketing materials, joint advertising and events. These partnerships can broaden each company’s audience and generate sales leads, brand awareness and buzz. Co-marketing can also occur when there’s a joint solution offered by the parties for even more impact.

Co-selling partnerships involve companies referring each other’s products or services to customers. Partners may share sales resources, personnel and leads and take joint pitch meetings. The partnership has the objectives of gaining customers, lowering sales costs and generating higher revenue. For example, large enterprises like Google and Microsoft have robust co-selling and co-marketing partner programs that are often product- or vertical-specific.

Re-selling partnerships allow a company (the reseller) to purchase products or services from another company (the OEM [original equipment manufacturer] that embeds your product or the ISV [independent software vendor]) and sell them to its own customers. Resellers expand their product offerings and revenue while OEMs and ISVs increase their market reach and brand awareness. Resellers have control over the way they market, sell and support the products and services.

Value-added resellers (VARs), common in IT, SaaS and cybersecurity, take reselling a step further. They enhance the value of resold products and services by packaging them with other offerings, customizing products for a target market or developing additional product features.

White labeling involves reselling the product under a partner’s brand with no mention of the original ISV.

Licensing agreements involve one company (the licensor) giving another (the licensee) the right to produce, distribute or use its intellectual property (IP) for a fee or royalty. The IP may be a technology, patent, copyright or trademark. Licensing agreements allow licensors to leverage another company’s operations to generate revenue, while licensees can use proprietary technology or IP without acquiring it outright or creating their own solution. For instance, IBM has a global licensing program for other organizations to license its products for use.

System integrators (SIs) design, customize, integrate and maintain complex IT systems for their customers, often on a consulting basis. They develop partner relationships with disparate vendors whose solutions they consolidate in a streamlined platform.

Managed service providers (MSPs) offer IT support and consulting services, acting as the IT department for their customers. They may be responsible for infrastructure, network and cloud services. Managed security service providers (MSSPs) offer cybersecurity services to their customers in a similar model, overseeing capabilities including endpoint detection and response (EDR), data security and identity access and management (IAM). MSPs and MSSPs partner with companies that produce products and solutions, and they supplement their offerings with ongoing customer services and support. The goal of MSP and MSSP partnerships is to enhance operational efficiency and resiliency for customers.

Collectively, re-selling (including VARs), the SI model and the MSP/MSSP model comprise the main types of channel partnerships. Many enterprises run channel partner programs to work with other companies at scale. For example, Cisco has a robust channel partner program that supports VAR, SI and MSP partners.

Mergers and acquisitions (M&A) form the ultimate partnership. Well-executed GTM partnerships can lead to strategic M&A transactions when enterprise partners see the value of an emerging technology. These can be beneficial for companies and their customers in creating a more complete solution, enabling a unified platform and scaling innovation globally while opening up new markets.

Strategies And Tactics for Successful Partnerships

Well-executed GTM partnerships dramatically accelerate the adoption of new technology. Partners can gain access to a new customer base, add revenue streams and scale solutions globally. However, companies seeking a GTM partnership must recruit the right partners and properly manage partnerships throughout their lifecycles.

This starts with qualifying partner organizations based on potential synergies. Seek out hungry and well-matched companies—those that have expertise around your solutions, are trusted advisors to your target audience and are looking to grow.

A good partnership typically centers on product truth: a clear link between the value of an offering and the way it’s sold, marketed or integrated by a partner. Otherwise, a partnership can be a drain on time and resources due to insufficient product integrations, misaligned value propositions or bad customer fit. Companies should also structure partner incentives around fair market value, adding incentives for exceptional or niche partner capabilities and outcomes.

Once a partnership is launched, enablement and ongoing management are critical. Equip your GTM partners with product documentation, sales and marketing content and training resources. Validate partnerships by tracking performance based on key performance indicators (KPIs). These can include the number of sales representatives and engineers a partner assigns to your offerings, how many utilize or complete training resources and the number of additional leads, customers and revenue the partnership produces. Compare KPIs to your resource input to evaluate the ROI for your time, effort and financial input.

Prioritizing Diligence, Enablement And Validation

The most effective partnerships create synergies, drive sales and open new opportunities for growth. Emerging companies often land flagship clients from well-matched partners. Enterprises can gain additional revenue streams and find M&A prospects from productive relationships with startups.

Focused, strategic partnerships utilize diligence during recruitment along with a disciplined enablement and validation strategy. Companies that prioritize these fundamentals can mutually generate high ROI while furthering their respective growth.

***This article was originally posted on Forbes.com. You can read it here.***