I think people were surprised by the appointment as I’m not your typical marketer. I’d spent most of my career in commercial finance after training as a lawyer so to suddenly be CMO probably seemed a stretch to some. I had a lot of visitors that first day and many calls of congratulations. I had worked my way up from near the bottom of the organisation in Chester and even though I was born in America there was no doubt that People were finally glad to have 'one of their own' looking after Marketing.
I can remember one call in particular from what would have been a “vice chairman” in the old mbna. He was one of the guys there at the very beginning who helped build the company from next to nothing. He told me I'd got the job because of many factors. He said (his words, not mine!) the staff really liked me, I was commercially talented, I could hold my own on marketing, my work ethic was strong and my personal values and customer-focus were good. But, he said, there was one thing that I would need help on if I were to be a success and that was managing partnerships.
He went on to explain that I was seen as an introvert (I am!) and that I generally made a poor first impression because of my perceived diffidence to others. A key part of the new job would be building relationships with new and existing partners and he thought I would struggle. He suggested that they would get me some veteran partnership managers to help guide me and to make sure it wasn’t a derailer for me. In actual fact, the conversation almost derailed me as it made me question my ability to do the job, after all mbna had nearly 800 partners in the UK at the time. But, after a pause, I shook it all off and went to work.
I was lucky to be blessed with a great partnership team, ten of whom are with me now at my new place. It was a group of people who I trusted a great deal. We had one very big partner, Virgin Money, who were felt to be a challenge because they were always unsettled and just a bit unhappy and I was puzzled by this because it had been going on for years. mbna had a core ethos of taking care of the Customer and back then it was in our corporate DNA to constantly find ways to grow the business. VM wanted to make “everyone better off” and also shared the same strong desire to grow. This was an old relationship and by the time it came my way we were on the second contract and had both had made good progress, but it was clear that something was fundamentally out of kilter.
I may not have been experienced with partnerships but I knew how to build an effective team and any effective team starts with a foundation of trust, which is where the issue lay in our relationship. VM felt that we were benefitting more than they were and we were constantly asking for changes that would benefit only mbna. I know this because Jayne Ann, their CEO, told me in our very first meeting. Of course we disputed this but it was obvious that Virgin did not trust us. My team recognised this and wanted to reset the relationship but mbna, the people who had invented affinity marketing, won these type of partnerships by saying they were best when it came to managing a credit card portfolio and from the outside that looked the case.
Tell an awkward truth
The issue with the relationship for us was, in the way the deal was structured, we just didn’t make the proper margins. Virgin essentially supplied accounts and then we managed them. We had little say on the supplied accounts except they had to meet our credit criteria but then they had approval on Customer management changes. I realised we had to tell an awkward truth: that we made little or no money off this current deal. I call that an awkward truth because it would not necessarily make our lives easier. If I was really transparent then maybe they’d start focusing their efforts on efficiencies in our core business or funding choices, which would be a huge distraction. It was a very tough decision internally because in order for them to believe us we would have to show them enough high level financial detail about the partnership for the story to be credible. My team and I made the call to share that info with minimal air-cover in our broader business. No one outside me and my team really wanted to do it so I just stopped talking about it and quietly shared enough info to build that trust.
Align the goals
Now that we both had visibility of the issues we could get to work aligning goals. My sales pitch was if you take a bit less now and let us be a bit braver on Customer risk management, we could open up Customer recruitment and then both share half of a much bigger pie later. I knew they would say yes because VM had said all along that they wanted a real partnership where we both contributed what we knew best and shared equally in the rewards. The new structure was as close to a JV as you could get without going all the way; the type of deal that requires a lot of transparency on both sides and builds trust. We could then focus on building a great proposition for the Customer that would have a fair return for both of us. I think that may have been the seventh year of the partnership and we were finally aligned. A lot has happened since then but for a few years we were both firing on all cylinders. I couldn’t imagine a more aligned partnership of that size.
Communication is a two way street
It was during this re-alignment process that I realised the mountain of information we both shared frequently meant little to either party. We shared what we wanted and they shared what they wanted. We both also shared what was required in the contract. Then at meeting after meeting we would both ask each other the same questions. It was only after we trusted each other and really started listening that good things started to happen for both of us.
I know this all seems rather mundane but I’ve seen it all go wrong before and since. At HomeServe, partnerships were not really partnerships at all. They felt like we were vendors instead of partners. It isn’t this way anymore and the win/win/win is obvious. It is nearly eight years since that first big job at mbna and I don’t think I’d get the same advice now on needing some help to manage partners. I don’t worry about being the life and soul of the party when we get together with a partner but before we see them and after they have gone, I do worry about communication, shared goals, and, when it is needed, telling that awkward truth.