3 Ways to Develop Successful Long-Term OEM Partnerships

September 22, 2009

Hello Again.

In my last post I talked about 3 ways to increase your “retail” sales via the OEM channel: https://brucechandler.wordpress.com/.

Today I’m going to spend a few minutes on how to grow long-term OEM partnerships.

In many ways the OEM channel isn’t unlike other sales channels in that in order to be successful, you obviously need to develop relationships with your partners.  In principle, this is quite simple.  However in practice, due to a number of factors it can be quite difficult.  Factors affecting relationships with your partners may include the following: pricing pressure, pricing/relationships with subsidiary unit or division, executive support on either side, technology roadmap and potential incompatibilities therein, marketing integration, etc.  This is by no means a complete list but represents some top line potential hurdles.

In years past, in many markets, if you had a good product that met the minimum requirements of your bundle partner, there was a good chance you could develop a successful OEM relationship.  In today’s market in particular, competition is fierce and many companies, in an attempt to drive down costs, are taking the “build-it-yourself” route, or in some cases ceding to the lowest bidder in order to add the right software technology to their own product.

Here are a few ideas which will help you develop successful long-term OEM partnerships, regardless of your specific product offering or industry:

1) Get executive support Whether your executives, or those of your partner, are involved in your target accounts on a day-to-day basis or not, it can pay to keep executives at both organizations connected, updated and informed.  If there are issues, they may be able to help reach a solution; if there is good news, they may want to be the first to know.  Also if there will be a product roadmap or other important change, this info may go out to executives first and in any event you need to stay current with what’s going on both at your company and your account’s.

2) Solicit feedback actively Depending on your relationship with your account, you might be saying, “are you crazy”?  The reality is, your customers are always willing to give you feedback (okay, maybe it’s not always positive!).  One key reason they may move to a competitor, or build it themselves, is if you’re not responsive to their input or suggestions.  Clearly you can’t fix every bug or implement every new feature they want, but perhaps in some cases you can.  And in any event, some times just listening to their suggestions/criticisms is enough to diffuse the situation and improve your relationship with them.

3) Initiate co-marketing initiatives Frequently in the OEM space, once you close your “deal”, the tendency is to move on.  Of course you follow through with all of the deliverables, whether it be Gold Masters, engineering deliverables, contracts, etc.  Since you are placing your product in your partner’s box (unless it’s embedded technology) it is likely there are co-marketing efforts which can either expand your market share or grow sales–if done correctly this can impact revenue positively for you and your partner.  Examples include in-box promotions, web/email promotions and/or PR.  Frequently this will involve a upsell to a higher end product, or a cross sell to a product in a different category.  At Adobe, I put together a promotion with Epson, who bundled one of Adobe’s products with one of their photo printers, to offer Epson customers a significant discount on Photoshop, which was a upsell from the product that was bundled with their printer (Photoshop Elements).  If your product is embedded in your customers product, this may not always be possible, but it is possible to promote your brand/technology in your partner’s marketing materials.

Thanks for tuning in, we’ll see you next time.

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