By Guy Mucklow, CEO and founder, Postcode Anywhere
Large corporations offer great business opportunities to many small companies, so it’s little wonder that CEOs of SMEs will spend numerous hours deliberating over suitable partners. Not only will bigger businesses help provide a stamp of approval and attract other large customers, but they give SMEs the potential to scale their business by gaining access to the large company’s customer base.
Ultimately, the right partnership has the potential to be transformational for an SME, providing the rocket fuel for growth of which any founder can only hope to dream of achieving.
Selling product to a large blue chip customer is usually fairly straightforward provided that you can demonstrate value and have a solution that will fix their problem. However, opportunities to partner are usually much more difficult to find and even more difficult to make successful given the significant differences which usually exist between large and small businesses.
Selling a product into a large corporate usually involves dealing with a small team of people who are trying to solve a specific issue for the business. Partnerships and licensing deals, on the other hand, often filter down from strategic decisions made at board level and involve far more people. As with most big deals; the level of risk increases almost proportionately to the level of opportunity.
When considering a large corporate partner, therefore, SMEs need to ensure that there's both a cultural and a commercial fit before proceeding. Your businesses may share the same goals but if your team clashes or you fail to get the right kind of “buy-in”, then the potential benefits will be lost and the relationship doomed to failure.
Tailoring your service to fit within the strategic plans of the partner organisation is essential. For example, I know that large data owners have a problem selling into smaller businesses as it is not cost effective. I know that many of the postal service providers, who own large data sets, are keen to exploit new sources of revenue as their traditional business is in decline. I also know that they are keen to move into the digital market and that we have a perfect fit both in terms of the technology that we provide which enables data to be sold efficiently to smaller companies as well as a strong presence in the target market.
The process of identifying and selecting potential partners is really no different from selling to any business. You find out what it is that the customer needs, identify how your service will meet that need and target businesses that fit the profile. Hopefully once you’ve landed the first one, you can then use the experiences and references gained from that to attract others.
Working with large partners is never going to be easy. Large corporates have established processes and structures that move slowly and are very political by their nature. For SMEs, this can be frustrating as it clashes with their agility and quicker decision processes.
It can also be easy to feel intimidated as well as flattered when large partners express an interest in your business. As a business owner you must have the confidence in what you’re doing and don’t try to force the pace.
It is my firm belief that, when dealing with partners, you have to make them look good. Although I aim to provide them with a level of support which makes them notice me, I am otherwise happy to take a back seat in the relationship on the basis that this enables them to take full advantage of its success.