0
0
Having recently returned from the HLTH 2022 conference in Las Vegas it became abundantly clear that the term “partnership” is both over-used, and frequently mis-used. This is also something we’ve routinely seen in the engagements we undertake with clients. It may seem like a simple issue of terminology and definition, but we’ve seen how it can have an insidious effect on the growth of a company.
In our experience a “partner” – preceded with the term “strategic or not” – is an organization with which you’re contracted that is similarly promoting your solution’s use at scale. It is not the same as an organization that contracts with you to use your solution in pursuit of their own goals; also known as a “customer.”
Sure, a “customer” who uses more and more of your solution will in fact be helping your organization achieve it’s goal of growth. But the growth in use of your solution is not an objective the customer has. At least not in the same focused way the commercial organization does. For example, as a business grows in terms of headcount it might need more software licenses to things like MS Office to support that headcount. But the growth in the number of MS Office licenses is an ‘expense’ to the business, not something it intentionally seeks to see increase. If your business is selling those MS Office licenses to the business, you are in a conventional customer-supplier relationship.
We suspect the use of the term “partner” has crept into the healthcare ecosystem as a way of trying to soften the fact that somewhere in the core of these relationships is truly a transactional, money-transferring component. As Daniel Pink conveyed in “To Sell is Human,” the concept of “sales” has a sleazy or smarmy connotation for many of us. Similarly to many people the idea of “customer,” “supplier,” or “vendor” are terms that are based in this sleazy sales context. Therefore, referring to the other party as a “partner” is believed to suggest a more collaborative relationship (and thus less sleazy) than the vendor-customer terminology.
Using the term “partner” to refer to what is truly a “customer” is fine until the organization then begins actually “partnering” with organizations who are not customers, but true partners. Ongoing support of a customer as they use your solution is vastly different than support of a true partner who is either reselling your product “as is” or as an embedded part of their own offering (also known as an Original Equipment Manufacturer or OEM relationship). At the simplest level the difference stems from what the other organization expects of you. A customer doesn’t include you in their planning meetings to the same extent that a partner might. They simply expect the solution to arrive and work as advertised when they agreed to by it. And failing that, they expect you to fix any issues. That’s really the extent of the expectation.
A partner on the other hand will tend to be either reselling your solution, or otherwise integrating into their in such a way that requires a much broader range of services and support from you, both initially and over time. For example, if they are going resell your solution not only will their sales and marketing teams need to be trained on how to market and sell the solution, but depending on the terms of the relationship you may need to train their staff in supporting their customers. And doing so well is in your best interests as well as in their own. Your KPIs are dependent on theirs not just “this month” but over the long-term. In other words, you are truly “partners” in the relationship.
Similarly, if they are embedding your solution as an integral part of their solution, again, additional support will need to make its way into the relationship. A famous example of such a relationship is Intel, a world-leading designer and manufacturer of computer chips being “inside” many computers (“Intel Inside” being the famous marketing tagline).
A simple vendor-customer relationship would have had the computer manufacturer buy say 100,000 processor chips from Intel at an agreed-to price and with a defined delivery schedule. Upon receipt of the chips the customer will install them in the computers, and begin marketing the computers under their own brand, pricing, and processes. Upon delivery of the last chip in such an order Intel would would no longer have any obligations or responsibilities to the relationship (presuming no failure of the product) .
As a “strategic partner” the computer manufacturer – let’s assume Lenovo – will enter into a long-term agreement not only for the initial 100,000 chips, but for what is coming successively after that. They will ask Intel engineers to explain and agree to design specifications of chips coming long after the initial order so the Lenovo engineers and manufacturing processes can be adjusted to accommodate what comes next. Intel will in-turn (did) ask that Lenovo put a sticker on each computer expressing “Intel Inside.” They both will negotiate who will produce those stickers, and then Lenovo will agree to place that sticker onto the computers in the manufacturing process. And on and on the considerations will go so that both parties were moving forward as “partners.”
As you can see, the ongoing obligations in a true partnership are far more complex than a typical vendor-customer relationship. This is why they often have Relationship Managers who have a day to day, indefinite responsibility to make sure all aspects of the relationship are moving along. Such “Relationship Management” is not “support” in that if the product isn’t working or the customer has a question, they get “support.” Instead and keeping with our example, it is working with Lenovo to find a solution when we as Intel realize there will be a delay in delivery of the stickers so that Lenovo doesn’t miss it’s delivery obligations to Best Buy.
When a business doesn’t delineate between true customers and partners, both the sales processes and post-contract-signing support processes can become confused. This can lead to both inefficiencies and role / responsibility confusion amongst personnel. For example, if the “Account Manager” who supports customers is asked to “do Account Management” for a partner, many things can be overlooked, leading to issues in the relationship.
Business are better off to very clearly define and manage customer relationships distinctly from those of partners. Everything from the “sales cycle” to invoicing to ongoing relationship management are different. Organizations will perform best when they align KPIs, manage staff, and define processes to be aligned to these realities.
When you say “partner” what are you referring to?
