Sales Partnerships

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Из курса от партнера University of Pennsylvania

Entrepreneurship 3: Growth Strategies

743 оценки

University of Pennsylvania

Entrepreneurship 3: Growth Strategies

743 оценки

Курс 3 из 5 — Specialization Entrepreneurship

Start-ups are designed to grow quickly, but successful start-ups grow smart. This course is designed to provide you with an understanding of the essential elements of successful scaling, including an overview of demand generation, customer acquisition, adoption, diffusion and forecasting demand. You’ll also learn how to market effectively using best practices of digital marketing, social media, PR, SEO, and pricing. Finally, you’ll cover the nuts and bolts of building a sales process, partnerships and supply relationships, and examine the crucial components of attracting, developing and retaining talent. By the end of this course, you’ll have an outline of an expansion strategy for your idea or enterprise, and also be ready for Entrepreneurship 4: Financing and Profitability

Из урока

Module 3: Cost Structures, Pricing, and Tracking

This module was designed to give you a strong foundation in the economics around growing a start-up, including how to understand and implement cost targets, pricing strategies, and outcome measurement. You’ll learn the math behind creating cost targets and margin requirements (whether your product or service will be sold via retailers or some other channel), the principles that guide pricing of products and services, and how to implement the “four Cs” of pricing while measuring price sensitivity. You'll also explore how to identify key performance indicators (KPIs) to determine whether your business is thriving or failing, how to efficiently grow a customer base through sales partnerships, and how to decide whether to make your own products/components or purchase them from a third party. By the end of this module, you will possess the foundational economic knowledge that informs the cost, price, sales, and production strategies used by successful entrepreneurs today.

Target Costing and Channel Economics21:03

How to Price the Product or Service27:41

Performance Measurement, KPIs, Dashboard, Reporting11:30

Sales Partnerships9:10

Make-Buy Decision in Operations14:13

Познакомьтесь с преподавателями

Kartik Hosanagar
Professor
Wharton School
Lori Rosenkopf
Vice Dean and Director, Wharton Undergraduate Division
Simon and Midge Palley Professor of Management
David Hsu
Richard A. Sapp Professor of Management
The Wharton School
Laura Huang
Assistant Professor
Management
Ethan Mollick
Associate Professor
Associate Professor of Management- Wharton School
David Bell
Xinmei Zhang and Yongge Dai Professor, Professor of Marketing
Marketing
Karl T. Ulrich
Vice Dean of Entrepreneurship and Innovation
The Wharton School

I'm Karl Ulrich.

I'm a professor at the Wharton School, and this session is on sales partnerships.

I want to start with a story.

In 2004, I started a company with a group of MBA students called TerraPass,

and the big idea behind TerraPass was that

we would remediate the environmental impact of driving you car.

You could join TerraPass for about $70 or $80 per year, and TerraPass would,

on your behalf, buy enough wind power to offset fossil fuel used out a power

plant that would be roughly equivalent to the gasoline you would burn in your car.

That was the idea behind TerraPass.

Now, when we came out of the course, we had a few hundred customers, and

we thought the business could potentially be something real.

And so we raised a little money, we spun out the company, and

we got started in growing that startup.

We had some successful PR, and we attracted, as I say, a few

hundred customers, and those customers that bought our product were very loyal.

They liked it quite a lot, and they told their friends.

The problem was that only about 5% of the population was at

all interested in the product.

95% of people, when they heard that idea, thought it was pretty silly.

And so the challenge for us was how do we acquire

just those customers that are really interested in our product?

How do we cut through the noise and

reach only those who are most likely to resonate with the message of our product?

So in effect, how could we acquire customers for TerraPass efficiently, and

that is at lower cost.

Now, we had tried quite a few different things, but

the initiative that really broke through for us was sales partnerships.

And the idea behind a sales partnership is to ask the question,

who already has access to your target customer, and in what way can you add

value for that partner who has access to your target customer?

Now, of course, you can just pay them,

that is you could share the revenue of your product with the sales partner.

But there are often other ways in which you can add value.

For instance, your product can bring a certain luster.

In our case,

an environmental luster to a product that otherwise lacks that attribute.

Now, typically, what we're talking about in sales partnerships

Is not a conventional retail partner.

So for instance, if you make bicycles, and you go looking for

a retailer that sells bicycles to sell your product through,

that's a conventional retailer relationship.

It isn't really what I mean by a sales partnership.

What I'm talking about here is a partnership for someone

that is selling something else or has some other relationship with your costumer, and

you're basically riding along with them in order to access their target costumer.

Let me make this concrete for

you with three examples that we did in sales partnerships with TerraPass.

The first was with Ford Motor Company.

The insight we had was that when somebody is buying a car, they're already thinking

about options and additional accessories that they might buy to go with the car.

What if, at the point of purchase,

we could offer a TerraPass to go alongside a new vehicle?

And the benefit proposition would be that TerraPass

mitigates the environmental impact of owning that vehicle.

Now, we thought, maybe this would be particularly attractive to those who were

buying cars that have relatively poor fuel economy, or

maybe it would be appropriate for those who were hesitant to even own a car.

But if they could get a TerraPass with that car,

it would mitigate an objection to owning the car.

And we therefore thought that might be quite attractive to either car dealers or

the automobile manufacturers.

In fact, we were able to establish a partnership with Ford Motor Company

called Green Miles.

And the program behind, the idea behind that program

was that someone buying a Ford automobile could buy a TerraPass, and

TerraPass would mitigate the environmental impact of driving that car.

And as part of that exchange, TerraPass would share some of the revenue

from the TerraPass purchase with Ford, and Ford would provide the email address and

customer information of their customer, and TerraPass could then have

access to that customer for the lifetime of the relationship with the customer.

So that was one example of a partnership.

A second example was a deal that we did with Expedia.

Expedia is a travel retailer.

It sells airline tickets, hotel rooms, that sort of thing.

The idea behind the Expedia deal was that during the checkout sequence,

after someone had purchased an airline ticket,

they would be offered the possibility of purchasing a TerraPass

certificate that would mitigate the environmental impact of that flight.

So you would be buying enough environmental remediation to cover

the fossil fuel use of that flight, and that would be done during the check out

sequence on Expedia in the same place where Expedia offers you things like

airport packing or rental cars or theater tickets during the check-out sequence.

That partnership turned out to be fantastically successful for TerraPass.

I believe TerraPass acquired close to a million customers as a result of that

Expedia deal, and something like 2% of those who checked out

on Expedia after buying an airline ticket opted in to buy the TerraPass add-on.

So we acquired those customers as a result of that transaction.

That partnership brought us exposure to millions and

millions of customers that we otherwise wouldn't have been able to reach.

The benefit for

Expedia, in addition to the percentage of the revenue that we shared with them,

was that it mitigated an environmental concern that many customers had.

And so it polished the environmental attributes of the Expedia product.

It made the airline ticket feel more environmentally friendly, and

thus mitigate a risk factor for Expedia that consumers would

consider flying to be too environmentally costly to purchase.

The last deal that we did as a sales partnership was with

Bloomsberry Chocolate, and

what we did was we bundled a TerraPass certificate with a chocolate bar.

And so the idea was that when you purchased a chocolate bar,

a Bloomsberry chocolate bar, you also got the equivalent of one day's

mitigation of your environmental footprint.

And so to think about that,

TerraPass would mitigate the environmental impact of your living for a day.

That is the average driving, air travel, household energy use,

embodied embodied and products and service for the average American.

TerraPass would mitigate one day's worth

in conjunction with purchasing that chocolate bar.

And for that, Bloomsberry charged an extra $2 US

on the purchase price of that chocolate bar.

Those chocolate bars were sold through the Whole Foods grocery retailer

in the United States, and I believe we sold about a half a million units

of that chocolate bar in conjunction with the TerraPass product.

So another example of a sales partnership that allowed TerraPass

to reach customers it wouldn't otherwise have been able to reach.

So in some, the advantage of sales partnerships is that

your partner already has access to your target segment.

So you target partners who already have a customer profile or

customer segment that closely matches the segment that you're looking to reach.

And then you have to think about what is it you can offer the partner that makes it

attractive for the partner to want to bundle your product or

to want to refer their customers to you.

In addition to money, which is an obvious benefit,

you just share some of the revenue with the sales partner.

You have the opportunity to bring some brand attributes to that partner.

So in the case of TerraPass, we brought the environmentally

friendly brand attribute to brands that really wanted to have that.

For instance, to an automaker and to the seller of airline tickets.

Sales partnerships have the potential to dramatically expand your reach and

accelerate your growth beyond what you can do on your own.

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