Partnerships are increasingly under attack as less than credible in enterprise software, no more so than in CRM. Starting with classic logo and press release swaps between vendors desperate to fuel each other’s sales pipelines, partnerships are met with increasing scrutiny in the world of enterprise software in general and CRM specifically. A prime reason: CRM vendors see consolidation coming in specific sectors, and it is much easier to partner with someone you cannot afford to acquire or don’t have a chance of being acquired by. The scope of this article includes partnerships between vendors not including system integrators — which is a completely separate topic.
The Truth About CRM Partnerships
Often mistaking common sense for strategic vision, many of the CRM and sell-side vendors strike partnerships for the following reasons:
- Rushing to add in difficult-to-develop functionality including analytics and pricing. One vendor did this and didn’t generate a dime of revenue from the relationship — and all because the time was not taken to define an integration strategy between applications. The process workflows of customers, it was assumed, would be enough to make shared customers in the respective pipelines of companies buy. In reality, the partnering companies were woefully unprepared to make a true solution out of their respective applications.
- Only focusing on the launch of the partnership. Web sites littered with logos and press releases that extol the virtues of partnerships are so prevalent because managers are given bonuses to get in dozens of partnerships a quarter or year. Don’t take any logo and press release-based partnership at face value; drill deeper into the partnerships and see if engineering is involved. If your sales rep comes in and trumpets the fact that the solution they didn’t have a month ago is now suddenly available, ask about the business case from the vendor’s standpoint as well. Often the two critical links — engineering and management — are completely out of the loop on partnerships.
- One-and-done in a sales cycle makes for good PR. Certain CRM vendors strike partnerships purely to keep themselves alive in a sales cycle for one specific opportunity. The general rule is this: the bigger the opportunity, the greater the pressure to make one or several partnerships happen overnight. You have to credit CRM vendors for the entrepreneurial approach to making sales happen — yet you have to doubt their ability to scale these hastily done partnerships into a long-term solutions strategy.
- No references signals no sales. At the center of the failure of partnerships to gain credibility in CRM is the paper-thin execution so many deliver. Instead of just telling the truth and saying “Look, we did the partnership to get this functionality and we’ve not sold a thing yet,” too many CRM vendors act as if partnerships are generating millions in revenue. It’s best to keep this in mind if you are about to buy into a CRM system with partnerships being a critical component of the total solution mix. If there are no references, chances are very high there is no real revenue either, which means you’ll probably be one of the first true customers — and beta sites.
- Push for proof of integration. Another sure sign a partnership is about to fall apart is when there is little if any integration between components in the solution mix — and within the workflows the CRM vendor is touting as being “complete” due to the partnership. What you’re looking for here is proof engineering has been involved to make sure there is a reliable integration of collaborating and/or transactional elements in the system. If there is no evidence of this the partnership is really just a press release.
What Is Working
With so many partnerships being nothing more than press releases and shared logos, it’s great to see some partnerships really working. Here are their characteristics:
- Evidence that engineering, marketing and management are on the same page. You can see this in the real partnerships. Engineering has done the work to make sure both vendors’ components are working together, and management has signed off on the investments to make sure there is tight integration between applications, and marketing executes the launch of the partnership with a wealth of data on just what it means to the user.
- Certifications are a requirement now. In the several sales calls I’ve seen in the last month between CRM vendors and users, the re-occurring need for validation of a partnership being real — in the form of certifications — is becoming commonplace. Prospects just aren’t taking anyone’s word for it anymore when it comes to their applications working with another vendor’s apllications, even if both claim they have a partnerships.
- References from your industry and global distribution. When a partnership has these, it’s another proof point — and don’t accept the excuse of confidentiality, because if you dig long enough, you can find what the truth is — if there are failed implementations based on the partnership you will never know. But if your company is about to invest based on it, don’t settle for a complete lack of references — that signals you are the beta site.
Bottom Line: Face it, the vast majority of partnerships are more fiction than fact. It’s better to get to the truth about them by looking at how coordinated engineering, management and marketing have been in executing what it takes to make a partnership deliver for your needs. Don’t just believe the press release — get to the certifications and references before buying based on one.
Louis Columbus, a CRM Buyer columnist, is a former senior analyst with AMR Research. He recently completed the book Getting Results from Your Analyst Relations Strategies, which is available on Amazon.com.