How to Build Marketing Partnerships that Work

Lou Friedmann is the Chief Revenue Officer at Bento for Business, a Chicago-based financial services startup. When he gave this talk, he was the Senior Vice President of Insureon, a Chicago-based insurance technology company.

Below is a transcript of his presentation at the January 27, 2017 Here’s How Startup Marketing Conference, where he shared advice for building meaningful partnerships.

I'm Lou Friedmann, the Senior Vice President of Insureon. Insureon, for those of you who don’t know, is an insurance agency technology company. We’re basically a Progressive or an E-Insurance type model but only focused on business insurance, which is workers’ comp, general liability, E&O, and BOP. Our particular niche for partnerships is companies throughout the country who are under about 20 employees. According to the last economic census in 2012, that's about 30 to 40 million businesses. It's the growth engine of our country, and that’s the last political statement I’m going to make. So, talking about partnerships today, I have a story. Partly because of my personality, where, because I'm somewhat extraverted, I'm no longer afraid to call people or companies of any size.

I'm somewhat fearless about it because I've gone through failure and I've gone through tremendous successes. I've built businesses on partnerships and I haven't gotten fired. Some of that fear kinda wore off over time, and Brad and others here can attest to that. So, the way I look at partnerships is the difference between – and I've never used these websites before, I swear – Tinder and eHarmony. In trying to oversimplify it, I would say the difference between eHarmony and Tinder is the length of the relationship. To be doing partnerships really well, you have to want long-term relationships. And that is the kind of the the guy I am. I’ve got a family of five, I’ve been married for 25 years and when I build partnerships with people I tend to look for ones in which I can trust them with my cell phone and possibly even have a personal relationship with them over time. It’s more than just a business relationship.

So, for me, again, you've got to know a little bit about your personality to do the partnership thing. I'm looking for something where even if I move from Options Express to Insureon to other companies, I might maintain those relationships over a long period of time because they're so strong and because of what we've built together, and it's mutual. I have to make them some money and help them to be successful. I have to help myself to be successful. And that's not every conversation they have.

So, the situation for us is B2B. A lot of people have been talking about B2C and B2B, that distinction is important. For us it's even more complicated because it's B2B2B. How many people are in B2B2B? So there are some things that apply only to this, and some things that apply to B2C but things about partnerships are generic to all and that’s what I'm going to try to stick to. So, in my case, back in 2012 when I joined Insureon, me and the CEO created an alpha brand. We were totally reliant on SEM and then I built an SEO program with content, but that was still not enough growth for the CEO and the board.

So, we said, we're not growing fast enough on the retail program, even though it's doing okay. We have the capacity with our IT development, our sales team, our service team, etc. that we want to fill. We've got hungry service people, and in our business, in B2B, the whole company is divided by vertical. We have 1,000 verticals. We sell insurance to IT businesses, restaurants, janitors, everyone, and all the salespeople are divided up by those verticals. We want to grow revenue from partnerships as a percentage of all our overall volume and overall revenue. We've had, up to that point, partners in place but it was loose and haphazard, there wasn't a guiding principle or someone who owned it.

Mea culpa, I owned it, but the CEO and other people did as well. And there were some things, if this makes sense in your company, that were on autopilot, which is really dangerous. I was doing a million things, there were a lot of things that we were working on with the development side including how to keep up with our growth and how to deal with turnover. And, by the way, this insurance thing, it's not exciting or sexy, nobody buys insurance because they want to. Has anyone bought insurance because they want to? Any Scorpios in the audience? So we were dealing with something where there was a drive and a demand for partnerships to have a bigger focus and more success. So what did I do?

1.  I put all of the partnerships that I could find on one sheet of paper and organized them

Not two sheets of paper, one. I organized them by past, present, and future. In other words, what's already producing leads and revenue, what’s not and what conversations were started but didn't have follow-through. I ranked them in order of what part of the sales process they were in, i.e., ones that were already producing new customers versus ones where there's a guy named Bob who's at this insurance carrier and we should call him. I also tried to rank them through other factors. For instance, an insurance carrier and an Intuit software company require two totally different partnership processes. This one is just a personal relationship that I have and I'm not sure what this company does but we seem to have the same clients. So the channel is what drove the whole thing.

2.  I leveraged the channel partnerships

What's channel partnership? Are we selling to the same customer? Is that segment at the bottom of the economic pyramid with companies that are 10 employees or less, is that where we're selling to? By the way, about 60 to 70 percent of all the people we sell insurance to are home-based. They're 1099s. They're freelancers. There's no employees. They're not on LinkedIn, unless you're in real estate. So, they don't show up as professionals and it might not even be their primary job. We're trying to reach a channel that is – I'm an amateur photographer; in photography they call them “prosumers.” You're not professionals, it might not even be incorporated, and you're not a consumer, so who are you? How do we reach them? That's where the channel partnerships become really interesting because nobody has a database. The list of brokers who call you don't have lists of these people. And if they do, they're full of shit. Because you have to go and find them through other ways.

3.  I asked a lot of stupid questions and I delved into little details.

I've gotten a lot of feedback on that, but I hadn’t been in insurance until five years ago. A lot of people who are in marketing, and who are here today, are in an industry that they weren't in before. A lot of people in marketing don't go into one industry and stay in one industry for a long time. We like the variety, we like to learn new things. So I'm learning about insurance, and I have to learn in order to talk to people who know a lot more about insurance than I do. And the only way to do that is...

4.  I had to nudge people.

You have to ask for a little bit more. Ask a favor, do something for someone, give someone some education in order to get something back from within the company. A lot of partnerships depend on all of these dotted lines, to everyone else in your company, if you've got five people or you've got 500 people. Dotted lines of people that were going to help you get this done. And the sooner you acknowledge that, the better.

5.  I created a framework and categories according to workflow

But the categories are also important because some of these partnerships require a ton of thinking in terms of the workflow. The difference between the partnership with someone like a top-five software company would be that the leads are coming in, it's one-way. They're not asking me for leads back to them in this particular case. The leads are coming in and they just want us to do our job, close the sale, inform their sales people and then report back and share some economics, and I’m oversimplifying that. That workflow comes through the front page of the website, they don't want to co-brand it, they don't want anything fancy, they just want us to get it done.

This, as opposed to some of these really complicated deals where for an insurance company, like one of the top five insurance brokers in the world, we had to present a very complicated workflow with what people are doing through the customer journey, their agent journey, another workflow from internal operations, IT, etc. You have to think about all this stuff because what they want isn't just a software relationship where they dump someone on the front page, they want you to think through how their whole company could integrate, potentially, with you. Sometimes it's an RFP, sometimes it's not. So the more you think that through, the more likely it is they're going to stay engaged and want to talk. And, frankly, it creates a lot of credibility, too.

So knowing what I just described, that might be a hundred conversations. The software example, where it's just leads coming into the website and you're just tracking it, that might be 10 to 20 conversations. Are you the kind of person that's going to sustain that over time and follow up, do all that work and do everything they ask you to over a six to 12 month period? You have to ask yourself that, and you have to ask for a lot of help. None of this I did on my own. None of it.

6.  I figured out how to spend time.

I spent a lot of time in the wrong conversations. Because I develop a lot of relationships, I spend a lot of time in relationships and then I find out that they don't feel the same way about me. So, just recently, there was one of the top 10 insurance providers, they focus on auto insurance and they wanted to sell our kind of insurance. But it didn't come through the company, it came through a broker. The broker had this great idea that he was going to, through his broker relationship, introduce me and plug me into their whole network. We're talking about 20,000 salespeople representing our products, whether it's online or on the phone, etc. I got really excited. We went down the whole road. We had people flying to Chicago and to the West Coast. We had all of this time and energy on it, but in the end, because it wasn't going direct to the company and through a brokerage, it was doomed to fail. He was already trying to manipulate the economics. He wasn't representing me and he wasn't letting me talk to the company. He wanted to be the intermediary.

I had spent all this time, this intellectual and personal time, with him and then it ended up blowing up in my face when he accused me of backing out because, in the end, I wasn't comfortable with the contract or the relationship. I wanted a direct relationship. But I kept my job, so it's good. But I could have known, early on through this system, that going through a brokerage like that wasn't going to work. And that's part of the process too, making that mistake, spending hundreds of meetings and hundreds of hours on something that's going be a rat hole, as Michael said, or a dead end. That's just part of it.

7.  I course adjusted when needed

If I'm lucky, one out of 10 of these is going to hit, and if it hits, it could be a substantial part of our revenue. And then I course adjusted every week, I nudged people and I measured everything. We have a partnership with a Big Five bank, which means that their bankers and all their branch locations, 15,000 locations, can represent our product to their customers. They're not selling it, but they're introducing it. And then based on that introduction, they can come into our funnel and then we can do our job. So we started and there was this big launch campaign and we had all these people, maybe 50 people, on the phone. And we got it all done. And the campaign went out on an email, and they were driving people to our website and to the bank branches, and it was great. The first week was awesome.

And then the next week, it wasn't as awesome. And by the third week there was zero traffic. There was no blood flowing through the relationship we had set even though they had done all this promotion and we'd done all this promotion. So we found out that we're just one of 50 products that they're representing to their small business clients and that they had moved on to the next product. So, what does that do for our partnership? We had spent all of these IT resources and everything else on it. So I had to go down to some of the bank branches myself, with other people, and ask stupid questions, poke around, find out what their world was like, etc. We gave them an iPad so that it could sell better but they had just put it in the drawer because someone at the bank said they couldn't do that. We didn't know that. We were going to buy 50,000 iPads, or whatever it took, in order to increase the partnership. I think what Michael, other speakers and Brian have said is, understanding the point of sale and understanding that individual at that bank is crucial.

We had this relationship, "This is going to happen to you. You're going to have this great relationship at the top." You find out the top isn't controlling the bottom. They're not controlling the front line. So that's the bad news. The good news is the front line is accessible to you and they don't need to find out about it. Or you could say, "I'm going to go and make these trips. I'm going to talk to so-and-so. I'm going to report back," and they say, "Great. Go for it. The more sales you can generate for us, the better. Together, okay?" So then the outcome of that is from 2014 we branded Insureon, we started to organize and consort our efforts on partnership, we grew from 16 to 18 partners, but that's not really a good measure. That's kind of bullshit because they're all different sizes. One of those could be a huge portion of our revenue. But the number is important because you're going to get some hits in there, some hits and misses. We went from a 30% to a 100% growth from partners in terms of the number of apps and the number of sales.

An app, for us, remember, is someone going through and having to answer 50 to 100 questions that he doesn't want to answer, including his social security number and all this other awful stuff, in order to get a quote. So getting through to a completed app is hard for us. Really hard. So the growth in that and getting more people to be motivated to go to the end of that process is part of the problem, part of the reason why partners aren't so important to push them through. We went from 600 to 52,000 apps a year as part of our funnel. When we measure the apps and then measure our conversion from the apps, which on a good day, one in four of those apps will turn into a sale. And our sales are very small, because they are very small businesses. Our typical premium is around $1,000 a year. And on a good day, we make 25% on that, so we make $250. They might be around for three years because of the kind of businesses that we serve. We don't lose them to a competitor, we lose them because they get a company job and they don't need insurance anymore or they decide that they're not making enough money and they can't pay the premium, things like that. So all of that is an accomplishment, but also why the partnerships are so important.

The Results

So, in conclusion, this is an example of a workflow that we created with the team across all of these different swim lanes. The partner, the client experience, our call center, our internal CRM, AMS, and our sales producers, and so on. For one client, we might do five or 10 of these things to explain to everyone, internally and externally, what we're doing and how we're doing it. If you don't like to do this and you're in B2B partnerships, then you shouldn't be in partnerships. Because this is part of the bread and butter of what we do, what I do. If you can think this through and you enjoy it, you're on the right track.

Woody Allen said something like, "60 percent of life is showing up." Michael said it really well. Brian said it really well. Michael had this one-in-24 rule: if you and the team aren't going to respond immediately to a partnership opportunity, if you're not going in the same day, if you're not comfortable with that kind of responsiveness, if you don't look to problem solve within 24 hours and develop things that people are going to use, you're not going to be as successful as you could be. It's very important to show up for the partner, and it's very important for everyone else in the organization to know how important this is just by your actions. Know your personality.

The last thing I'll leave you with is, especially with partnerships, especially when you might have some initial success on a small scale, David Colt, Ned Bene, Jim Gray and other people who were very successful CEO's that I've worked with have said something that's very applicable to this, which is, "Potential is interesting, performance is everything."

Think about the partnerships, in terms of what your goals are and what you're trying to do for the company, and focus on the performance. That will allow you to make some tough decisions about the ones that you want to walk away from and the ones you want to go and dive deeper into. Thank you for that today.