I'm in a sales job and always used to wonder the meaning of the term strategic parter. I always used to think it as more of a sales/marketing terminology, since at the end of the day we have to sell at the best profit possible. Sometime back i went into deep thought over this and I came to realise that the term 'strategic partner' has got a deep meaning.
I will start from the basics. Why an organisation is into business? In very simple terms - It is to make money. The owner/management/enterpreneaur has some money and he can get the returns by putting this into a bank. However he wants to get higher returns that what he would get be getting from the bank. So, he does some assessment and decides that investing the money into a particular business best suits his objective. Mind it, if he gets an instrument which would give similar ROI on his investment, he won't get into the hassle of business at all. But he has to because there is no other instrument available. This becomes the basic obejective of getting into a business - 'TO GET RETURNS ON HIS INVESTMENT BETTER THAN A BANK DEPOSIT'. Now her has to create the 'factory' for his business - the term is symbolical because it would mean capital equipments, people, tools, IT etc. Of this factory, he may be having few things such as few people, some IT infrastructure etc. but in all probability he won't be having everything. Hence, he has to start looking into the market for the missing components of the factory. The roles of the vendors now come into play. Now the vendors may chose to think like a vendor or a strategic partner. The act perse more or less remains same in both the cases i.e sell goods and/or services. However, what differentiates the two is the end goal that he is seeking. If the vendor thinks his end goal is making money and stops at that, then he'll just stay as a vendor. However, if the vendors choses to go further and makes the success of his customer as the end objective, then he becomes the strategic partner. In this case, he becomes an integral part of the factory which is working towards the end goal of the customer. Of course while doing that, the vendor has to take care of his KPIs because he has to remain healthy in order to continue serving the end customer. This also puts the onus on the customer to take care of the vendor in order to remain healthy so that the factory components remain healthy. This relationship is based on TRUST and the one common objective. In comparison, in the strict vendor-customer relationship, the two parties have two different objectives. The vendor in this case is not looking at the success of his customer as the end goal but shrinking its thinking just to making profits. The customer in this case is looking at squeezing the vendor to the maximum because he doesn't trust the guy. So this will always lead to 'my interest, ur interest' case and then either of the two parties will rejoice its success at the cost of the other.
This has been a big revelation for me and since then, while thinking about my products or solution, my thought automatically goes to the questions - "Is it going to make my customer successful? If yes How?"
I will start from the basics. Why an organisation is into business? In very simple terms - It is to make money. The owner/management/enterpreneaur has some money and he can get the returns by putting this into a bank. However he wants to get higher returns that what he would get be getting from the bank. So, he does some assessment and decides that investing the money into a particular business best suits his objective. Mind it, if he gets an instrument which would give similar ROI on his investment, he won't get into the hassle of business at all. But he has to because there is no other instrument available. This becomes the basic obejective of getting into a business - 'TO GET RETURNS ON HIS INVESTMENT BETTER THAN A BANK DEPOSIT'. Now her has to create the 'factory' for his business - the term is symbolical because it would mean capital equipments, people, tools, IT etc. Of this factory, he may be having few things such as few people, some IT infrastructure etc. but in all probability he won't be having everything. Hence, he has to start looking into the market for the missing components of the factory. The roles of the vendors now come into play. Now the vendors may chose to think like a vendor or a strategic partner. The act perse more or less remains same in both the cases i.e sell goods and/or services. However, what differentiates the two is the end goal that he is seeking. If the vendor thinks his end goal is making money and stops at that, then he'll just stay as a vendor. However, if the vendors choses to go further and makes the success of his customer as the end objective, then he becomes the strategic partner. In this case, he becomes an integral part of the factory which is working towards the end goal of the customer. Of course while doing that, the vendor has to take care of his KPIs because he has to remain healthy in order to continue serving the end customer. This also puts the onus on the customer to take care of the vendor in order to remain healthy so that the factory components remain healthy. This relationship is based on TRUST and the one common objective. In comparison, in the strict vendor-customer relationship, the two parties have two different objectives. The vendor in this case is not looking at the success of his customer as the end goal but shrinking its thinking just to making profits. The customer in this case is looking at squeezing the vendor to the maximum because he doesn't trust the guy. So this will always lead to 'my interest, ur interest' case and then either of the two parties will rejoice its success at the cost of the other.
This has been a big revelation for me and since then, while thinking about my products or solution, my thought automatically goes to the questions - "Is it going to make my customer successful? If yes How?"
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