Happy New Year and welcome to 2016!
Incredibly we haven’t posted a new blog since July 2015; but since September we have won 4 new clients, delivered 3 websites and we have another scheduled for launch in March. In other words, we’ve been extremely busy.
Most of that success has come from the relationships we have built up with our various partners since we formed in February 2015, so we thought it was a good thing to talk about in our first post of 2016.
A lot of agencies try to collaborate or partner with other businesses but often fail to build profitable partnerships because they underestimate the amount of effort that is required to realise the potential value. But as we have found since September, if you are prepared to work at it and be persistent you can realise long-term and very tangible benefits.
Our approach to starting an agency hasn’t been to poach clients from our old employers but to go looking for our own opportunities, build our client base from scratch and fund our growth from the business. That is a fairly bold thing to do without a lot of VC (or other investment) capital behind us and is something that we’re proud of. But it’s probably the toughest way to go about starting a new digital agency or any other business.
So what tips would we give to people thinking about trying to build profitable partnerships? Our 7 steps are:
- Have a very clear idea of the strategic direction of your business
This sounds obvious in any situation, but you are likely to have to invest 6-12 months of time and effort before you realise any revenue benefit from a partnership. So you need to be pretty sure that the partners you are considering are well aligned to your long-term strategic goals and the personality of your business.
- Pick the right partner
You’ll get better results if you target partners that:
- You already know or have some connection with.
- Have a definite need for the services you can provide (not an aspiration).
- You can deliver mutual benefit to on the Business Development and revenue fronts.
- Has enough crossover of skills to appreciate each other’s talents without being in direct competition.
- Has a similar culture to your business.
Above all, make sure that the business you are partnering with makes your joint proposition much more compelling than either of your individual solutions; otherwise you are going to waste a lot of time for a much lower chance of success.
- Have defined models in mind, but be flexible
There are many different ways that partnerships can be structured but the key thing is to find the one that works best from both operational and value perspectives. At the end of the day you’re doing this to improve your profitability so there needs to be clear, tangible and well articulated benefits to both parties that don’t add massive overheads to realise.
When you’re sharing skills, expertise and client knowledge to access opportunities you can share the spoils in a number of ways:
- Revenue share.
- Profit share (can be a bit messy to calculate).
- Consultancy charges.
- Skills swaps.
- Trades (skills for office space for example).
That isn’t an exhaustive list, just the most common that we have seen short of official legal partnerships / mergers. Take time to think about what you want from a partnership, and what you’re offering in return. There has to be a balance in terms of what both parties perceive as value.
- Be prepared to invest
I have mentioned before that it can take 6-12+ months before you start seeing real return from the partner relationships you have developed. You need to be prepared for that and to be doing a lot of pitch work and joint proposition building with no guaranteed return. You also need to be sure that whoever you are partnering with is ready and prepared for that too. But if you have picked the right partner and developed a compelling joint proposition you will start to realise the value in time, sometimes you just have to wait for the right opportunity.
And that investment requirement may not be just in time, you might also need to actually make some capital outlay to add that little extra gloss to the proposition to make it really strong enough to compete.
- Find the right spark and move quickly
Most partnerships are the result of somebody having visibility of a particular opportunity that they can’t deliver on their own. That can be an opportunity to add a specific skill set to their business model or a live client opportunity.
You might wait 6 months before the right opportunities to come along but you need to be sure you recognise them and move quickly when they do.
- Keep talking and build trust
Once you are engaged with another business and are discussing opportunities, pitching together and ultimately delivering work together you can’t forget that you are still two independant businesses. You have your own objectives, revenue targets, strengths and weaknesses. It is rarely an entirely harmonious experience and there are many challenges.
But the key is to acknowledge that and when issues arise address them directly, maturely and quickly so your partner knows you will respond in the right way even when things aren’t going to plan.
- Don’t be scared to discuss money
Over the years, we’ve seen many potentially profitable partnerships fail right at the point when something interesting is about to happen. This is invariably because the really big conversations (i.e. effort, and money) haven’t taken place.
Particularly in agency-land, we’ve often heard it said that there’s no point dealing with such vulgarities as money until there is a live client opportunity. We disagree. We think there is no point wasting time and effort on building opportunities unless you broadly know everyone is happy with the proposed splits.
You can feel more comfortable if you have clearly articulated ‘rules of engagement’ and ideally a contract signed between you that outlines the terms of the partnership. This doesn’t have to be a 300 page contract, just something that covers the key terms for each engagement.
How has this worked for us?
Acquia are a business that genuinely recognises the value of building partner relationships and who are prepared to invest to foster these. They do it on a global scale with hundreds of partner agencies like Walden O’Neill.
In September we became the first agency partner to sign up to their Acquia Cloud Enterprise Ramp (A.C.E.R.) solution. This allows us to offer our clients the benefits of an enterprise level, high availability hosting solution and really means that our claim of being a full service agency is complete. We can now offer a best in class hosting and technology solution (owned by us) as well as the strategy, user experience, design, development and optimisation services.
We wouldn’t have known that solution was being developed or have been in a position to be the first agency to sign up to it if we hadn’t been talking to Acquia about how we could work together pretty much since Walden O’Neill was founded.
We very quickly realised that Drupal was a strategic direction for us, so partnering with Acquia and building a good relationship with them was an early priority. That relationship has played a part in the last 3 new clients we acquired and now we’re conducting joint marketing activities. We’ll have a case study on the Acquia site talking about the A.C.E.R. solution in January and we were their first ‘Partner of the Week’ in 2016. They’re helping us get our message out and reach our audience because they see that we are committed to working with them and building a mutually beneficial relationship.
This is another great example of how following the principles above can yield results. We started discussions on a partnership with Bates JPW in June 2015, launched our first site with them (a recruitment site for Guy’s and St Thomas’ NHS Trust) in November 2015 and have another very exciting site scheduled to launch in March 2016.
We have had to be responsive when short-notice opportunities arose, persistent for longer term opportunities, flexible in the models we use, adaptable in how we govern the relationship and professional in overcoming obstacles.
But having put all that work in last year we are extremely optimistic about 2016 and the value the partnership can deliver for both businesses on top of the success we had in 2015.
Those are just two examples and we have lots of other conversations with other partners that we expect to see results from in 2016. All this helps Walden O’Neill grow and move towards our own goals for 2016 and beyond.
Get in touch if you think you’d like to work with us as a partner or a client and here’s to an exciting 2016!