Malaysian GST Update – will you be ready?
13/04/2017
Legal Advice for SMEs in SE Asia: Two Strategies for saving time and money
11/05/2017

Business partnerships make marriage look easy…

Channel Partnerships could be crucial for a growing SME. A good partnership can provide access to new customers and referrals that bring in more business but, just like dating, creating them takes time. You may often find what seems good on first sight may not be the best for you in the long term.

According to Noam Wasserman, a professor at Harvard Business School, 65% of businesses fail due to conflict and relationship breakdown between partners. Marriages are complicated, business partnerships even more so. The added pressures of courting investors, leading and managing employees, speaking to the public, and meeting the bottom-line add further strain to these multi-layered relationships.

Try following these steps to define, refine and secure long lasting business partnerships. Getting it wrong can be just as time consuming and expensive as tying the knot…

Step 1: Determine a channel partnership strategy – First set up a strong foundation

  1. Can you sell through partner / resellers or distribution?
    A channel reseller is a company or an individual (a merchant) that purchases goods or services with the intention of selling them on for a profit rather than consuming or using them. Distribution generally refers to outsourcing your channel business to an industry expert, this can help with scale, volume and service delivery but will generally impact on your margin.An Asian success story with this model is Qnet which originally sold gold numismatic coins. Qnet then expanded its products to include travel and leisure vacations in 2002. By 2006, Qnet had transitioned to marketing and selling ‘aspiring products’, which claim to boost energy, health and nutrition for buyers. According to their CEO, these types of products account for 30% of Qnet’s sales through its business model. The company has also introduced “life-enhancing products” such as a portable water filtration system and air purifier, which Qnet claims can fix pollution issues in homes.
  2. Can a partner sell with you?
    In this case, partners sell your products as an up-sell or missing value proposition. Any company that offers your service as a way to expand their offering fits into this category. For example, a car reseller might work with a bank to up-sell a car loan, or a software vendor might complement its offering with another partner.
    A great example of this is Asiahawk, a Singaporean based company that partners with accounting software provides like ABSS. Utilising a core set of business software solutions Asiahalk has built a successful professional services model around this. Not only do they profit from the initial product sale but increase revenue per customer with related value added services –

Step 2: Identify relevant partners and grade them – What do you have in common, no one-night stands! There are a number of factors to consider to ensure a partnership works well and is relevant and profitable too:

  • What market reach do you need? A local partner might be faster to “close” than a national partner, and could be helpful if you are targeting a niche market.
  • Do they complement your product? Determine how each partner might help you reach your goals. How motivated are they to work with you and does their business model complement yours?

To be effective in Asia, companies must think regionally but sell locally: they do better by focusing on urban clusters rather than entire countries as one market. In recent years, many multinationals & SMEs have tried to understand Asian markets more precisely by dividing them into subnational megaregions or attempting to craft multitier urban strategies based on population size or household income. Because these approaches miss crucial variations in consumer preferences and behavior, resources are invested less than optimally. ABSS suggests that in Asia, urban clusters are the most appropriate strategic specifically for consumer products. Often, we advise clients to forget the forest and see the trees.

Step 3: Develop a coherent plan for reaching these prospective partners – Recognize the power of complementarity and mutual admiration

Now that you have established criteria for suitable partners, reach out to these companies and establish a connection. Always start with companies you believe have an existing competency in your line of business be it products or services.

Develop a compelling value proposition. Position your company as a value add to the partner. Does your product help a company drive profits? Your offering should add revenue to your partner’s product line. Think about what the first 100 days of this new partnership will look like – how can you help them succeed and what level can they commit to you and your business.

Step 4: Drive growth through your partners – Take responsibility

Channel partners boost sales, reduce time to market, and provide access to competitive markets. So get started on building channel partnerships today.

ABSS have a range of partner opportunities. If you have existing relationships with Mico or SME businesses there will be value to talking with us. Let’s start our relationship today!

Visit our ‘Become a partner’ page at www.abssasia.com

Facebook Comments
Rhys Brown
Rhys Brown
Our International Country Director & SME Evangelist for Hong Kong, Philippines, Indonesia, Myanmar and the wider International business, Rhys is a 15-year veteran of the accounting software industry, having held senior management roles with MYOB Ltd spanning China, Malaysia and New Zealand.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.