In short, the work is very different, based on the appropriateness of the trading partner –– which, again, has been determined by the segmentation process.

Becoming Trustworthy

Which brings us back to trust: All the above efforts require a great degree of trust on both sides, because all require sharing sensitive information.

 

What is the best way to develop the necessary initial level of trust? According to the Economist survey, it’s through personal relationships, understanding, flexibility, mutual goals and shared rewards.

 

One good way to approach this is to say to a trading partner: ‘Okay, how can you show your potential partner that you are serious about making this effort?” Because in all probability, the trading partner on the other side does NOT trust you.

 

In our experience this requires four commitments, to:

n Disclosure

n Access

n Resources

n Advocacy

 

If you decide with strategic partners that you are going to disclose information, you encourage your trading partner to do the same. Just as in a personal relationship, if you open up, the other person will usually open up.

 

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Disclosure: What you will disclose is important to think about. If you disclose movement data or profitability analyses, this will elevate the discussion and build trust.

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Access: With whom in the trading partner organization will you interact? If you charge your lead people with meeting their counterparts, you will elevate the relationship, also building trust.

 

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Resources: Investment of time and assets speaks volumes about your commitment to the process and to results –– building more trust.

 

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Advocacy: This can be the biggest trust-builder –- and also the hardest to demonstrate. An advocate demonstrates goodwill. He or she gives you the benefit of the doubt. In our experience, this is often very difficult for retailers especially to do something like support a vendor partner in a meeting. But if you can, you can make huge deposits in your “trust account.”

 

Additional ways to build trust:

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Appoint a formal relationship manager to ensure that someone within your organization “owns” the relationship. A single point of contact, communication and internal advocacy for the partnership –– a person who promotes the partnering concept and makes sure the relationship is going somewhere –– can help assure that the strategic partnership’s potential is tapped and maximized.

 

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Make sure you have strong IT capabilities, particularly business information reporting, analytics, and especially profitability analysis. After all, if you can’t measure the success of the partnering effort, it won’t achieve your goals for it. And because many initial pilots tend to center on supply chain opportunities, supply chain software is also important.

 

How to begin? It’s important to do the right foundation work. Who are you in the marketplace? Who do you want to be? What are your objectives? With whom should you to partner for the best chance