As the heading suggests, partnership marketing is when one company or a brand collaborates with another brand to mutually benefit from each other’s strengths.
We have observed the partnership between Wimbledon and Slazenger. One of the longest partnerships in the tennis world. An excellent example of this.
It is not about partnerships between two brands that are equal in stature. It is about the vision and objectives two or more brands commonly share and believe in.
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Understanding Partnership Marketing
Partnership in marketing is a useful strategy for many businesses eager to increase their existing customer base. Profitability, goodwill, customer loyalty, brand image, and cost savings are the components that also get impacted rather positively in the process.
Different types of businesses like retail, restaurants, carmakers, and electronics manufacturers use this partnership marketing to create synergy between them. As each brand has unique strengths of its own.
Simply speaking, this strategy tries to increase market share by capitalizing on greater customer awareness.
YouTube and NBA have joined forces to develop a special NBA Channel on the video platform, which basically is an individualized microsite providing primarily NBA material and offering user recordings of NBA games/players
How partnerships can form?
Partnership marketing can be driven by two sometimes more brands deciding to collaborate on their own specialized offerings.
At times, a merger or acquisition also makes a partnership happen. To transfer a brand associated with one reputable company to a much better-known company and brand.
Partnerships can see more than just name and brand associations, there is a very good chance of sharing technologies and expertise. Just taking advantage of the uniqueness of each brand partner.
A partnership sometimes provides a limited outreach in terms of audience than a broad, single-name corporate product.
The image it conveys is more distinct, so companies should consider first whether this partnership can yield the benefits that were expected. Or it might turn off customers who are more comfortable with a single name for their favorite product.
Another reason a company would like to choose partners very carefully is that the risks associated are more than the benefit.
It’s also a good idea to find firms that have a similar set of values. This will make the actual partnership much more enjoyable for both parties.
The brands having this sort of alliance should develop their own identity to create a unique brand, its logos, themes, etc.
Partnership Marketing Examples
This kind of marketing has become ubiquitous.
BMW & Louis Vuitton
Name of the campaign: The Art of Travel
Luxury car manufacturer BMW and designer Louis Vuitton came together. Though it may not be the most straightforward of pairings.
But if we observe closely, they do have a couple of important things in common. Louis Vuitton’s signature luggage lines, and BMW, both are associated with travel.
Second, needless to say, they both operate in the luxury segment. And certainly, they’re both well-known, classic brands that undoubtedly offer high-quality craftsmanship.
This kind of shared value is exactly why this partnership was a smashing hit.
The partnership was such that when BMW developed a sports car model called the BMW i8, the partner Louis Vuitton designed an exclusive, four-piece set of suitcases that fit perfectly into the car’s rear space.
It was obvious that those designer luggage fit perfectly. The not-so-obvious aspect was the design.
They brought the experience to the next level by designing the looks in such a way that it uplifted BMW’s image and exhibited inimitable characteristics in more ways than one. They were sleek, elegant, and supremely high in quality and aesthetics.
On the technology front, both the luggage and some parts of the car’s interior used carbon fiber, strong yet light composite material. Shared values, to provide their customers best of what is available, reinforced.
Uber & Spotify
the tagline – Soundtrack for Your Ride
Spotify, as we know, is a music streaming app. It partnered with app-based taxi service Uber to create “a soundtrack for your ride.”
This was a great example of a beneficial partnership between the two very dissimilar companies, though with very similar goals — to increase customer base.
When riders booked a cab and are waiting for their ride, the Uber app prompted the users to connect with Spotify and become the DJ of their trip.
Users can create their own playlists to decide what they would like to listen to.
This smart and new-age partnership helped the customers (who have already become fans of Uber and Spotify) enjoy a whole new experience.
Their efforts were paid handsomely, and customers have become more eager to pick Uber (and Spotify) over competitors since they now know the next ride will be comfortable and enjoyable by listening to their favorite songs.
Citi AAdvantage cards: Citibank credit card that earns Airlines miles with selected purchases
Supermarket foods: Pillsbury baking mixes with Hershey’s chocolate;
Nike+: A Nike and Apple partnership that includes connected activity tracking technology in sporting gear with iPhone apps and the Apple Watch.
Advantages and Disadvantages of Partnership Marketing
Overall, partnerships will affect the bottom line(also known as revenue) as partner brands agree to develop and jointly promote their new offering.
Advantages
The guidelines are set together and when they are executed flawlessly; the partners are bound to benefit from them.
The South Korean manufacturer of electronics products LG Electronics has teamed up with the luxury brand Prada in order to better tap the potential of the growing mobile phone high-end market by creating a Prada branded phone, the “Prada phone by LG
Companies launch product extensions that suit their loyal customer base. But to enhance profitability, they need to attract new business as well.
Nina Ricci and Ladurée’s partnership is an excellent example of this.
When executed meticulously, companies get to increase exposure, in turn, strengthen brand recognition.
We all know that a company earns respect and credibility when it aligns with a reputable and prominent partner of the segment.
One of the highlights of partnership is it allows each partner to benefit in terms of revenue and new customers and minimizes the advertising budget. And most important of all, share the risks associated if any.
Disadvantages
This marketing strategy is built based on association, but the major challenge is the different cultures emanating from different companies. If the thought process is not aligned, the situation can take a toll on the business.
The agreement requires a lot of trusts, and clear and precise operating procedures or guidelines to be followed.
A horse-cart reaches its destination when both wheels work smoothly. Similarly, both companies have their own way of functioning, yet here, they need to work in tandem.
Most importantly, brands need to consider how a consumer reacts to this newly established partnership. A market research department will be helpful here.
A brand’s image could take a dip, and market presence can go haywire if companies fail to exhibit a sensible relationship.
For example, if high-end brand partners with a brand that is perceived as a mass-market player, the brand partnership ought to fail because of the mixed message it gives to its customer base. This, in fact, confuses the consumers.
In the worst-case scenario, the product might fall flat, the brand image would be tarnished, and this joint venture proved to be a costly affair.
A brand searches for another brand with a similar target audience and also the one that offers products or services which are complementary to each other. This is important because the conflict of interest is an absolute no-no.
Types of Partnership Marketing
Affiliate marketing
In this type of marketing, the brand partners with bloggers in that domain, social media influencers, and content creators who are trusted in their respective fields. This builds trust in the eyes of the customers. We also know these partners as affiliate marketers or simply affiliates. They promote the business on their own channels by developing relevant and brand-focused content.
Channel partner marketing
These partners are like third-party businesses or individuals. They help market and sell the products or services to a much wider audience and more importantly, to the new geographic areas.
Distributors, wholesalers, and retailers all are considered channel partners.
They purchase multiple quantities of the products from the brands. They would then promote and sell in their own marketplaces.
We also have brokers or agents, a very important link in the chain. They help establish partnerships, albeit on behalf of other businesses.
Referral partnerships
Customers who are happy with your product or services tend to promote via WOM (Word of mouth). This inadvertently makes them “referral” partners. They already have first-hand experience with the brand.
So, the tendency to recommend the products or services to people is very high. They are doing it out of satisfaction. The brands also reciprocate by providing them with commissions on every sale.
It is to be noted that this differs from an affiliate partnership.
As we know, affiliates promote the business to anyone who visits their channels.
So, what’s the difference between them? The difference is the prospects are not known to them, but in referrals, prospects are already known.
On one hand, it is true that referral partnerships bring leads in smaller numbers when compared to other initiatives. It is also true that these leads have an excellent chance of converting. The recommendations they make are especially powerful and prospects most of the time have already made up their minds to a large extent.
Strategic partnership
A strategic alliance is a carefully picked partnership between two business entities.
The crucial aspect is that they should share similar values and objectives. Each of them stays independent, but both businesses pool their resources together.
This will help in reaching out to new markets, both brands get visibility, and both try to accomplish mutual goals.
As many times it happens that they might not be able to reach on their own.
For example, Taco Bell’s Doritos Locos Tacos: Specialty food item co-developed by Yum! Brands, Inc. and PepsiCo subsidiary Frito-Lay, Inc.
Brand ambassador programs
A brand ambassador program is a type of partner marketing because they mutually benefit each other.
This will also help elevate the ambassador’s personal brand.
Omega partnered with the James Bond franchise to help promote their watches; Daniel Craig appeared in advertisements.
In this kind of initiative, a brand forms long-term partnerships with experts in a certain domain.
the best part is these ambassadors, promote the brand to their followers online and in person too.
Their own content channels are utilized rather effectively.
An important point to understand is that an ambassador program differs from an affiliate program.
Though they both rely on partnerships with influential, trusted individuals. However, an ambassador’s priority is to form sincere relationships with the target audience. This will give them a chance to share how the brand fits into their daily lives and what benefits it brings.
Conclusion
Determining all the details from the beginning will make the partnership process smooth. This also helps ensure a positive experience that is rewarding for the partners.
A meaningful strategic partnership is all about setting expectations, planning them well, and executing them methodically.
To start the alliance with a firm grasp on the defined goals. Build trusting relationships with brands that can help them reach those goals, while you help them reach theirs as well. Elevate both brands marketing to the next level with handsome profit in the pocket.