When Partners Become 'Frenemies,' the Customer Loses

In e-commerce, many different technologies need to work together seamlessly for online merchants to deliver an exceptional customer experience. As the backbone of every online retail operation, e-commerce platforms typically rely on an ecosystem of business and technology partners to deliver the features and services that help merchants build, manage and grow their storefronts.

These technology partnerships often involve integrations with specialized vendors for marketing automation, payment processing, product reviews, or one of the many other features and functions often built into e-commerce sites. E-commerce agencies and consultants provide services to help design, build and manage online stores for clients. They often partner with multiple platforms to have flexibility and expand their own field of play. In both scenarios, the expectation is that partners send each other customer prospects and often share revenue. Through that alignment of interests, the customer always comes out on top — except it’s rarely that cut and dried.

How companies choose to interact and manage partner relationships can vary greatly, and conflicts can arise when an overlap in features or services exists. Sometimes the platforms themselves can conceivably provide all that a particular merchant needs for a specific function or requirement. Other times, the technology or services of a partner are better suited to deliver what the merchant needs. The challenge for platforms is determining when to promote their own product capabilities instead of presenting partner-enabled options.

Take Amazon.com and Apple for instance. When the Apple iPad was originally released, Kindle devices for purchasing and reading books through Amazon were already in the hands of consumers around the world. While Apple offered its own application for purchasing and reading e-books through the iOS platform, it determined that allowing customers to access their Kindle books through their iPad was smart business. Amazon was the competition, but offering this convenience to Apple customers was a sacrifice with an upside.

Organizations forge partnerships because they’ve determined that together they can fulfill some customers’ needs better than they can apart. When partnerships get clouded by competition, it creates a gray area where either company could potentially provide the customer with a viable option. Friends become "frenemies." Driven by aggressive sales and profit goals, some companies, as a rule, promote their own capabilities and take revenue wherever they can before passing it through to partners. To them, it’s just business after all.

This profit-first mentality might provide short-term revenue gains, but when platforms consistently put incremental revenue over the best interests of the customer, it damages the fabric of the partner ecosystem and ultimately degrades the customer experience. Companies cannot afford to partner with platforms that seem to intentionally cost them business. Eventually, frustrated partners will retreat, and merchants will lose options that could help their businesses.

Billions of dollars of venture capital investment have gone into the various elements of the e-commerce value chain because so little of this is one-size-fits-all. It would be folly to think that any one company can or should divert merchants solely to their own native solutions, especially when merchants differ in complexity, growth expectations and scale requirements. Penalizing merchants financially for choosing the solution that works best for their company only serves to corrode trust and stifle innovation. Advances in technology over the last 20 years have primarily come from smaller companies offering third-party solutions that larger corporations then acquire. Take Adobe as an example. Since 1990, the company has acquired 52 other brands, including Magento and Workfront. Adobe recognizes where innovation happens.

The role of the platform provider should be to foster tight-knit integrations with best-in-breed solution providers and ensure that a complex web of these interconnected partners can come together seamlessly in the eyes of both the merchant and the end consumer. Identifying that ideal combination of features and services should be driven by the needs of the merchant, with the e-commerce platform as the nucleus.

While this approach requires platforms and partners to, at times, concede that their own offering isn’t the best option, ultimately the whole will be worth far more than the sum of its parts. A mutual commitment to merchant success should solve any potential conflict caused by overlap and develop a lucrative structure of trust and collaboration for all parties involved. Companies can turn frenemies into friends or avoid developing an adversarial relationship in the first place by simply remembering that the ultimate goal is delivering the best service possible to merchants.

Dan Fertig is vice president of agency partnerships at BigCommerce, a leading open SaaS e-commerce platform for fast-growing and established brands.