Alliance sales: the third-generation sales model

21st March 2019 |   Mike Nevin

Alliances between organisations can be marriages made in heaven, or they can go horribly wrong….

When organisations are first formed, whether in garages in Silicon Valley or back bedrooms in Bangalore, the original founders use the first-generation sales model to grow the business. That is, they “sell to” people. They sell to fellow enthusiasts to convince them to join the new company. They sell to investors to raise capital. Most importantly of all they sell direct to customers to get them to buy their products and services.

However, once the company is established and beyond the start-up phase thoughts turn to expansion and growth, and the company looks to the second-generation sales model which is “sell through”. In this phase companies look for distributors and resellers of their goods and services. The sales model and the skills involved in developing “sell-through” opportunities are considerably different from those employed in the first generation “sell to” model.

Assuming that the company is successful in its development of what is most commonly called a channel programme, then there will come a time when its thoughts turn to growth once again. But this time the growth is not just about sales volumes, it is also about margin growth, growing the size of the companies that they sell their products and services to, and growing the size of individual projects. This is typically when organisations turn to the third-generation sales model: “sell with”. Typically, this involves establishing a strategic alliance with a large enterprise partner, and the resulting sales are called alliance sales.

Managing Director at Alliance Best Practice Ltd

Mike Nevin is managing director of Alliance Best Practice Ltd, a research and benchmarking consultancy specialising in strategic alliance relationships. To date, over 300 of the world’s leading partnering organisations have benchmarked themselves against ABP’s best practice database which has resulted in the development of a highly detailed knowledge base of over 200,000 entries. This database allows ABP to offer its clients insights into ongoing best practices in strategic alliances.

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