As we work through this 30 Day Business framework, I feel compelled to further emphasize the importance of creating the right partnerships. This is especially true when you are starting a new business. At the early stages in the lifecycle of your business, your most valuable assets are the partnerships you can create. The partnerships with your suppliers, the partnerships with your customers, the partnerships you nurture and develop with your co-creators in your business.
All these partnerships are crucial to your success early on. Not surprisingly, these partnerships are the seedbed in which you are able to scale at the proper time. The right partners will facilitate and compliment your efforts.
There is one set of partnerships that I wanted to dive a little deeper into as we finalize the go-forward idea for our 30 Day Business Framework. Specifically, I want to explore who we need to partner with to design, build, offer for sale, and finally deliver to our end customers.
As part of the Day 3 exercises, you were asked to map out the Key Resources, Key Activities, and Key Partnerships that are required to build and delivery your value proposition (product) to your customer. The importance of doing this right cannot be overstated. You must know how your product design partners are. You must know who your development partners. You must know who your sales channel partners are.
So, let’s map that out and write a few things down:
Who specifically, are you going to partner with for designing your product?
Who specifically, are you going to partner with for product development?
Who specifically, are you going to partner with for advertising your product?
Who specifically, are you going to partner with for the sales of your product?
Who specifically, are you going to partner with for the delivery of your product?
Who specifically, are you going to partner with for the support and customer service for your product?
You might be scratching your head right now, wondering where you are going to find the right people with the right skill sets to meet all these different demands for your business. Don’t worry, we’re going to review some resources you can leverage as well as ways that you can meet many of these partnership requirements yourself until you find more permanent partners.
I’m going to talk about the idea that I’m likely to move forward with, and we’ll try to extract principles that can be generally useful for your ideas.
I’m leaning toward 2 different products, maybe 3. My choices are between 1. The subscription website, 2, the Fortnite Mobile App with Ads or in-app-purchases, or 3. The Photo filter App that I have worked on but not yet finished.
For this exercise of selecting Key Partners, I’ll use the subscription website as an example. But only because that’s the hardest one with the highest number of moving pieces.
Lets work our way down the questions listed above:
Who specificailly, do I need to work with to design this product?
Me: design and build a basic website. The subscription website is being made with a popular website building technology called WordPress. Deploying a WordPress website is something I’ve done hundreds of times over the years, and I will be the person deploying the first version of the subscription website.
Me: design and implement payment processing. The payment processing for the website will leverage Stripe’s payment technologies. I have implemented stripe payments before, so the initial setup shouldn’t be too difficult. I have never deployed a payment solution that included recurring payments. However, I have read the technical documentation on it, and there are only a few minor tweaks and differences between what I’ve done before and what is required for the proper deployment of recurring payments.
Who specifically, are you going to partner with for product development?
[Unknown]: supplier(s) of first subscription offerings on the website. This is a huge gap in my plans, and I need to start looking for the proper partner and products that will be most desirable to my target customers.
Who specifically, are you going to partner with for advertising your product?
Facebook: when selecting a partner for advertising, there are two critical considerations. First, your advertising partner needs to have access to lots of people’s eyes and ears. Second, your advertising partner needs to have a massive amount of information about those eyes and ears.
Facebook has nearly 2 Billion active daily users. Each one of those users has permitted Facebook to know something about them. Facebook also knows things about these people that, perhaps, they don’t want Facebook to know. (We won’t spend time here discussing the ethics behind Facebook’s user data policies).
The data that Facebook has available to it, and that it extends to those that advertise on their platform is extremely valuable! When you wear your marketing hat, you are looking for your target demographic. You’re trying to decide where they are, who they are, and what problems they are trying to solve in their lives (e.g. the jobs they are hiring products for).
While Facebook doesn’t have a ‘jobs listing’ of the available opportunities you can leverage, it does allow you to put your product offering in front of specific groups of people that your market research indicated might be interested. Your efforts to place your offering in front of these people – at least initially – will be to validate your assumptions, not to sell a product.
To be clear, we don’t want to invest the time, energy, and resources to build a product that has not been validated with data. The data will tell us if we should proceed. And that is what days 5-10 are all about!
Who specifically, are you going to partner with for the sales of your product?
WordPress, WooCommerce & Stripe: I plan to leverage platform technology from WordPress, WooCommerce from Automatic, and Payments from Stripe. The three of these companies all offer free tiers of their products, or will take only a percentage of sales when you have sales.
This way I don’t have to pay for a payment processing solution before any money is flowing! Save your money until you make some money!
Who specifically, are you going to partner with for the delivery of your product?
[Unknown]: Ideally the partner who will be providing the subscription service has some sort of logistics and shipping functionality they leverage. However, as this will be a new partnership for them, I shouldn’t expect to just plug in to their existing systems as they might be at capacity or they might not offer services in a way that are compatible with my business model.
As a result, I need to answer a few questions about product delivery before I can move forward with confidence.
- If I need to store products, who is a wear hosing provider that I can partner with to store the subscription products before sending them to the end customer?
- Who is a shipping provider that I can partner with to ship product from my product partner to my warhorse? And can this shipping provider also handle the sending of product to my end customer?
To get the type of support need, I will have to find a 3PL partner. (3PL stands for Third Party Logistics). Working with a 3PL has its advantages and disadvantages. So, I’ll need to discover and decide which trade-offs I’ll be willing to make and how they will impact my margins.
Who specifically, are you going to partner with for the support and customer service for your product?
Website, Email, Forums, Forwarding: Ideally, I only want to provide customer support for those parts of my service that are within my control – or at least those services that my website communicate that I’m in control of. For example, I might not be doing the actual charging of their credit card, but it would be unreasonable for me to expect users to head over tor Stripe’s website for support on a failed transaction on my website. Similarly, if the WooCommerce or WordPress elements of my site don’t work properly, I should plan to support those issues directly instead of forwarding my customers to WordPress or WooCommerce for troubleshooting or support.
On the other hand, if there are issues with the quietly of on elf the products inside of the subscription service, especially if that product is part of my supplier partners product offering, It would be in everyone’s best interest of those questions are directed to my supplier parter to resolve.
Of course there is a right wand and a wrong way to forward customer service issues to external parties.
The right way too forward support issues looks a little something like this:
A customer reaches out because a bottle of supplements was delivered with the seal broken and they would like a replacement. This is a completely reasonable request, and you absolutely want to service this customer and satisfy their request. In essence, you definitely want your customer to have a good experience as they go through the process of getting a replacement.
You might even be thinking to yourself that there might be an easy way for you to fulfill this request, instead of forwarding it on to your supplier partner. But, in this scenario, you didn’t set up the relationship with the supplier that way, so you must forward the customer on.
Before you started sending product to customers, you met with your product supplier and wrote up an agreement on what types of issues would be forwarded to them and which types of issues you would handle yourself. You decide that the supplier would handle manufacturing and product defects, along with replacement requests, and you would handle order processing and delivery issues.
Along with the devision of labor around what areas each party would handle, you also agreed on what type of response was appropriate for what type of issue.
Since the issue with the customer receiving a product where the seal was broken fall in the product or manufacturing defect area, your supplier partner is happy to handle it and promptly sends a new bottle of supplements to the customer. Everyone is happy.
Corner Cases:
You can probably imagine where there is a gray area, or where the two areas of responsibility overlap. Here’s one example in case your imagination hasn’t wandered into these areas before (I don’t blame you, logistics can seem boring until things go wrong. Then they are not only boring, they are annoying).
So, the scenario includes a customer wanting to return something that they argue is defective, but your supplier partner says is actually meets their quality standards. Because you have responsibility for the delivery of products, you also assume that sending items back to the supplier also falls within your area of responsibility. After all, your logistics partner makes is super easy to ship items back to their origin from customers, and including ‘free return shipping’ was part of the package you paid for. So you happily offer that to your customers.
So the customer executes a return and you refund their money.
The issue comes when your supplier partner received a return shipment and you ask for a credit for the value of the order. The return order arrived with most of the products open, which made them unsellable to another customer.
Your supplier partner isn’t happy about this, but agrees to swallow the cost on this order, but wants to have a meeting with you to discuss how this particular situation should be handled in the future.
Action Item:
How would you successfully navigate the upcoming conversation with the supplier partner? Why type of financial and brand value questions should you keep in mind when discussing the return policy? Are there any core business principles that your business has adopted that requires you to respond in a specific way? How important is the idea that the customer is always right? Where do you draw the line?
One reply on “A Word on Partnerships”
[…] was also a separate post written specifically about the Importance of Partnerships. In that post we covered what types of partners you’ll need to work with, and what […]