How to choose which partners to pursue first

In part 1 of this series, I said your potential partners are already in your customer’s ecosystem. The challenge starts once you map it. You end up with a long list of suppliers, technology companies, professional services firms, service providers and data providers, and every one of them could be a partner. You can’t pursue them all at once, and you shouldn’t try.

At Thumbtack, I built a framework to decide which ones come first. It has five steps:

1. Map your customer’s journey.

2. Filter on what matters to you.

3. Score what matters to the partner.

4. Sequence by horizon.

5. Commit to an 18-month roadmap.

Start with your customer’s journey

Don’t start with the partner list. Start with the customer, and lay out the moments when they have to hire or work with another company.

For a homeowner, that journey runs from buying a home, to moving in, to living there for years, to eventually selling. Each moment brings in different companies: lenders and inspectors when you buy, movers when you move, repair pros and retailers while you live there.

For a warranty company, it’s the life of a contract: selling the plan, supporting the customer, handling claims and renewing. The claim alone runs through first notice of loss, triage, authorization, parts and payment, and other companies are involved at every step.

Each of those moments is a category of potential partners. That’s your universe. The rest of the framework is about narrowing it.

Filter on what matters to you

Start by filtering those categories on two things that matter to you:

• Customer salience. How much does the customer care about getting this done right now? It’s highest in the big moments, like buying a home, moving or dealing with a repair. It’s lowest in routine ones, like checking a bank balance. A partner who reaches your customer in a high-salience moment reaches them when they’re ready to act.

• Partner awareness and affinity. How much does the customer trust the partner, and will that trust carry over to you? People tend to trust their bank, their insurer and their security company. They don’t have the same relationship with a party supply store. When a trusted partner introduces you, their credibility comes with the introduction.

The categories that score high on both are the ones worth a closer look.

Then look at it from the partner’s side

A category can matter a lot to you and still be the wrong place to start, because the partner has to want it too. These are the key success factors I score each category on:

• Value proposition. Do you have a compelling reason for this partner to work with you? Revenue, customers or a capability they don’t have.

• Product achievability. Can you actually build what the partner needs to say yes within the next 12 months, inclusive of prototypes and sales materials?

• Willingness to partner. Can you point to a partnership that already exists between a company like yours and a company like theirs? If nobody has done it yet, you’ll be the one proving it can work.

• Industry concentration. How concentrated is the industry? In a concentrated one, landing a single partner can give you a big share of the market.

• Barriers. Are there legal, security, regulatory or cost hurdles that will slow everything down?

• Sales cycle. How long will it take to close? A large insurer can take two to three years. A small retailer might take two or three calls.

• Frequency. How often does the customer deal with this partner? Once a year is very different from once every five years.

Do the rough math

To size a category, I multiply three things: how many of your customers touch it, how many of those need what you offer, and how much influence the partner has with them. Then weight it by frequency. A category your customer deals with every year is worth more than one they see once every five years.

It’s a rough number, and that’s fine. Its job is to rank categories against each other, not to forecast revenue.

Sequence by horizon

Now sort what’s left into three horizons, based on what it would take to make each partnership work today:

• Horizon 1: scale. Nothing in your product blocks the partnership. Sign, go live and expand, and build the playbook as you go.

• Horizon 2: experiment. There are gaps, and you’re actively closing them. Build relationships and run pilots while the product catches up.

• Horizon 3: discover. Major gaps exist. Do the research, make initial contact and test the value proposition.

Each horizon lines up with a stage of the partnership: horizon 3 partners are in discovery, horizon 2 partners are experimenting, and horizon 1 is where you land, expand and grow. I walk through all five stages in part 3.

What an ideal partner looks like

When you get down to individual companies, the best partners have three things in common:

• They serve the same customers you do, in a way that complements what you offer instead of competing with it.

• They have a strong brand that helps build trust in yours.

• What you offer appeals to their customers.

It’s the same idea as the overlap test in part 1: some overlap, but a third or less.

Commit to an 18-month roadmap

Narrow the list to your top three categories, then pick your top three to five partners in each. The output is an 18-month roadmap: which categories you’ll pursue and in what order, which partners in each, and the product work it takes to earn the right to play.

That last part matters. A partnership roadmap is also a product roadmap. If your product team hasn’t signed up for the features a horizon 2 partner needs, that partner stays in horizon 2 and doesn’t go live.

Remember that the Product org is not being resourced for that entire 18 month period, most of that time is Discovery, Ops driven experiments, sales cycles.

How we’ve applied it in warranty

For Polygrade, the customer is the warranty company, so we map its journey, not ours.

On the partnership side, parts suppliers and appliance replacements were the clearest place for us to start. Every claim that needs a part runs through a supplier, suppliers already sell to warranty companies, and the win is clear for both sides. Neither party needs to do anything new, no significant behaviour change, Voice AI was our next partner category. Every warranty company we work with is looking for a voice AI solution today, so we might as well offer it, which is why we partnered with Humach.

Choosing your partners is only the first decision. In part 3, I walk through how a partnership grows from there, stage by stage.

If you’re a supplier, technology company, professional services firm, service provider or data provider working with warranty companies, and you think we should be partners, I’d be glad to compare notes. Let’s talk.

If you run claims at a warranty company, you don’t have to work through this framework on your own. We’ve already assembled the partners for the jobs around every claim, and the best place to start is a claims analysis on your own data.