Let Them Eat Pie

We recently decided to retrofit a small den into a study room for the kids. While our primary motivation is domestic bliss and eliminating the piles of schoolwork around the house, we are also certain that this investment will be rewarded with full scholarships to Harvard.

Excited by the opportunity, our kids built their wish list from a well-known direct marketer of furniture with hip, adolescent style. I was impressed with their due diligence and, after some fine-tuning of the configuration, went online to buy. That was until, at checkout, I noticed a "delivery surcharge," in addition to the customary shipping and handling charge. In total, these two charges equaled 23% of the order and totaled hundreds of dollars for two simple desks and shelving units.

I called the reseller to see if I could get some insight into the two shipping charges. The customer service representative told me that the "delivery surcharge" assured me that my items are taken into the house, rather than left outside. In the end, she admitted that the additional charge was required by the furniture manufacturer, who contracted with a specific "white glove" delivery service. The conversation, and sadly, the order unraveled, as I was unable to rationalize the value of the additional charge.

Ultimately, I found a local retailer that carries similar products and delivers for a nominal fee. Not only were there no spurious delivery charges, the retailer even offered custom configurations and an array of paint colors to maximize our investment.

My experience as a buyer reinforces the importance of having a solid customer value proposition. But equally important -- if you sell via indirect channels -- is that your partners understand, and can readily qualify, the value they derive in representing your products. For purposes of attracting and retaining partners, that message is delivered through your partner business proposition.

A compelling partner business proposition is made up of three distinct ingredients. Think about it as a pie with three slices, if you will. Your business proposition needs to fill up the pie plate, but the size of each slice may vary. Failing that, your business proposition has less substance and is a less enticing dish.

1) Your Brand
The degree to which your company's reputation and name buys awareness and clout with the business partner's target audience. I found my local retailer by searching on the web for the furniture brand. The retailer's name was unknown to me otherwise. In this situation, the furniture manufacturer's brand is a strong component in driving business to its retailers.

2) The Product or Service Fit
The degree to which your company's product or service fits into the business partner's solution and addresses its customers' requirements, as compared to your partner's other choices. In the case of the study room furniture, both the online reseller and the retailer represented high quality products that fit their business and customer profile.

3) The Return on Investment (ROI)
The degree to which the business partner benefits from its investment in your product or service, as compared to your competitors. A business partner's investment in you revolves around the profit picture, but also involves the market opportunity, the competitive environment, and lost revenue or focus from other opportunities. The partner's perspective on its ROI can affect the customer's decision if there are costs that are not packaged or represented well, as the additional "delivery surcharge" was not.

Ideally, a solid business proposition requires that at least two of these three ingredients fill up the pie plate to ensure that you have engaged, motivated, and loyal business partners. Not all companies can tout an acclaimed brand, and many need to work harder on product fit and ROI. Others can compensate for a weaker product by standing on brand and ROI. (Brand, for instance, is less important for a product or service that is integrated into a solution provider's, or OEM, product.) If, however, you have strength in just one of these ingredients, it may be worth rethinking your business proposition recipe.

Here's to enjoying the last stretch of summer and some excellent berry pie. May your partner business proposition always be inviting and keep you ahead of the curve.