Building Sustainable Value Propositions
Posted: 6/24/2010 by Norma Watenpaugh
Building Win‐Win‐Win Value Propositions: The Key to Sustainable Partnerships
by Norma Watenpaugh, Principal, PhoenixCG
How often do partner managers or management focus only on, “What do we get out of the deal?” While it is important as good business managers that we understand the return on investment on our partnerships and alliances, it is also important to understand that viable, sustainable partnerships are based on a more complex value proposition. A winning value proposition isn’t just a two way proposition. It is a three way proposition. One that includes not only what your partner gets out of the deal, but also what your joint customer gets out of the deal.
Successful go-to-market alliances start with a compelling JOINT value proposition that addresses the customer buying motivations first. Creating value propositions for all stakeholders in the partnership creates not just a WIN-WIN partnership, but a WIN-WIN-WIN where the customer wins, too. Customer value ultimately translates into value for the partners in creating product or service opportunities and new sales opportunities. This value triangle is often expressed as “partner math,” where 1+ 1 >3.
What happens if any of the three value propositions is weak? Then, investment and commitment to the alliance will diminish for lack of a compelling return on investment. When customer value proposition is weak, sales of the joint offer will falter for lack of a compelling reason to buy on the part of the targeted customers. Alliance case studies have shown that successful go‐to‐market partnerships not only define value of all the stakeholders but also define partnering value in three dimensions. They include:
- Solution value that addresses key customer buying motivations will create competitive advantage and drive revenue generation.
- Financial value will create motivations for both partners to invest and commit to the alliance.
- Sales and marketing value will drive active sales engagement and joint selling.
In my next post, I'll flesh out what I mean by solution, financial, and sales and marketing value, as well as present a case example of how a global systems integrator applied the principles of this "value triangle."