Business development deals are notoriously time-consuming, manual and difficult to scale. These teams tend to focus on just a few large, highly customized negotiation at a time, limiting their ability to ramp up deals with midsize and smaller partners — especially those who are paid on a performance basis.
Companies that primarily focus on large, business development partnerships leave money on the table.
By leveraging the affiliate marketing model, companies can create far more scalable strategies with their business development deals and capture more partnership opportunities without reinventing the wheel each time.
Similarities Between the Affiliate Model and Business Development
Consider this example: A business development or partner specialist at an online stationery company does a contract-based deal with a popular baby store to place a custom coupon in its catalog.
When the coupon campaign ends, the stationery company creates a manual report based on how many customers redeemed the promotion. Weeks later, the baby store sends an invoice to the online stationery company, which then pays by check a month later.
At the year’s end, the online baby store must send the stationery company a 1099 tax form for its earnings.
This type of business development partnership is actually closely aligned with how affiliate marketing works. The partner (baby store) earns money based on how many people it drives to a particular product or promotion that the brands is looking to convert.
A key difference is that traditional development deals tend to rely on a manual process in which representatives hand-manage every aspect of a deal.
As a result, business development teams typically can only focus on those “big fish”-type partners. They simply don’t have the technology, time, resources, or bandwidth to manage more than that.
These companies may very well realize that an affiliate program could handle many of these functions, however they might be hesitant to adopt this strategy for their smaller partnership opportunities because they assume they’ll have to pay large performance fees to an affiliate network and they have no interest in doing that — especially for deals they originated.
How the Affiliate Marketing Model Benefits Business Development
The reality is that, today, affiliate technology is far more sophisticated, allowing companies to be more in control, automate contracting, performance tracking and data capture. It also streamlines their communications processes, allowing them to cultivate more brand-aligned partnerships.
Although many companies already incorporate elements of the affiliate model into their partnerships, they haven’t necessarily integrated them into their business development and partner strategies yet.
But as businesses seek greater flexibility and transparency from their partnerships, they’ll increasingly adopt strategies long associated with affiliate marketing.
Using tracking technology typically connected to affiliate marketing can free up the business development team, allowing them to focus on creating valuable new partnerships rather than having to manage and track what they currently have.
This approach also serves as a motivator for business development partners, as they can see how they are performing in real time.
Of course, not all elements can be automated. The process will still require people to manage the partnership program, recruit and guide new partners, and offer resources to improve performance.
The 80/20 Rule in Performance-Based Business Development
Another important benefit to structuring smaller or mid-sized business development partnerships within an affiliate framework is that it allows the business development team to focus on the biggest partners and the customization they require.
At the same time, smaller and mid-size partners can be engaged through scalable, automated onboarding and relationship management systems.
Essentially, it’s the Pareto Principle in practice, with 80 percent of results coming from 20 percent of input.
In business development terms, this means 80 percent of sales could be generated by 20 percent of clients. The affiliate framework allows companies to cater to that top 20 percent while maintaining momentum with the other 80%.
If you’re like most leaders, you’re constantly looking for ways to add performance-based partners without having to recreate the wheel each time — an the affiliate model can help you accomplish that very effectively and efficiently.
To learn more about how to grow your business with performance-based business development partnerships, reach out to our team.
A version of this post was originally published on salesforce.com.