Partnership marketing is what’s next
Changing consumer attitudes and behaviors towards brands, businesses, and advertising have resulted in sales and marketing no longer being considered the main drivers of business growth.
Consumers lack trust in advertisements, salespeople, and brands. It is widely believed that consumers are exposed to 4,000 to 10,000 advertising messages daily, and 69% of audiences have a lack of confidence in advertising.¹
A better, more trustworthy, innovative solution: partnership marketing
This ultimate guide to partnership marketing is suitable for both those who are unfamiliar with partnerships as a revenue channel and for those who are knowledgeable and looking to assist their enterprise in launching a program.
What’s the difference between business partnerships and partnership marketing?
A business partnership and partnership marketing differ in terms of their nature and legal aspects. A business partnership is established through formal agreements (such as general, limited, and limited liability) and holds a legal relationship. On the other hand, partnership marketing typically operates on informal, verbally agreed terms without significant legal implications, resembling a friendly business relationship.
What is the purpose of partnership marketing?
The main goal of partnership marketing is to lower the cost per lead (CPL) and increase sales. The concept is that collaboration between two parties can lead to a mutually advantageous relationship through the pooling of resources and audience sharing.
By collaborating with a larger company, a small business can enhance its credibility and position itself as a respected participant in its industry. Marketing partnerships between brands enable them to collaborate through co-branding, where both logos are placed on a product, or cross-promotion, in which they advertise each other’s products – further elaboration on this will follow.
What are the advantages and disadvantages of marketing partnerships?
Identifying potential partners and effectively collaborating can sometimes pose a challenge. There is always a possibility of the partnership turning sour, resulting in damage to the reputations of both participating companies.
Before making a decision, contemplate the advantages and disadvantages.
Benefits of partnership marketing
There are several advantages to partnership marketing, including:
1. The advantages include a higher level of exposure and increased reach. 2. The benefits involve the sharing of costs and workload among participants. 3. The distinctive selling points are identified as unique value propositions.
1. Increased exposure and reach
By utilizing the social media networks, email lists, and search authority of another business, you can expand your brand’s reach to a new audience. Pauline Mura, Senior Marketing Partnership Manager at Livestorm, explains that by leveraging both your own and your partner’s databases, you can access leads that would not be accessible within a usual timeframe. If you select a partner brand carefully, you will swiftly establish credibility with a pre-qualified audience.
2. Shared costs and workload
Partnering is a wise decision for teams with limited resources who want to expand because it effectively doubles their marketing budget for specific campaigns and provides access to multidisciplinary talent and new perspectives, all without the need to hire or contract out.
3. Unique value propositions
By taking a methodical approach, you can rephrase the text as: It is possible to devise exclusive value propositions and acquaint your partner’s audience with complementary products in your assortment. The combination of resources, skills, and offerings can result in novel solutions, improved and swifter services, and potential disruption within the industry.
Risks of partnership marketing
Some of the potential drawbacks of partnership marketing are:
1 – Deviating from the intended path 2 – Differences in opinions and clashes 3 – Impacting the level of trust
1. Straying off course
According to Pauline, it is important to share deadlines in order to avoid losing control over communications and feeling pressured to make decisions. Working with others may result in some priorities being delayed, and it could also lead to goals or direction being altered in order to reach an agreement.
2. Disagreements and conflicts
It is possible that your partners may not complete the tasks they agreed to on time or fulfill their responsibilities as agreed upon. Although you have control over your own business processes and resources, you cannot control theirs. In the event of a campaign failure, partners may point fingers at each other and become competitors, which can harm both parties’ reputations.
Profit sharing can be a delicate matter, particularly when one partner contributes more than the other. Additionally, if you have invested a substantial amount in the partnership, you may become overly dependent on co-branding or be left with products or services that are not capable of functioning effectively on their own.
3. Damaging trust
You can potentially lose the trust of your customer base by supporting a partner who fails to meet expectations. According to Pauline, if you haven’t done your due diligence to confirm the partner’s reliability in terms of branding, or if there is a public relations crisis or any issue related to their reputation, your brand integrity is negatively affected due to your association with them. Additionally, there is always a risk involved in sharing customer data and trade secrets, even with strong event partnership agreements.
Deep dive into channel partnerships
There are two categories that channel partnerships can fall into, which are reseller and referral partnerships.
- Reseller partnerships are when one company resells another brand’s products or services directly and marks it up and keeps the margin. When reselling products, the company may purchase the product at wholesale prices and carry inventory.
- Referral partnerships introduce, influence, or perform some kind of last-mile persuasion to refer a consumer toward purchasing a product or service from the business itself, and earns a commission as a result.
Referral partnerships are becoming more popular, and there are several different forms of partnerships that fall into this category.
- Strategic brand-to-brand partnerships are mutually beneficial programs that leverage complementary industries or customer needs. They are set up to increase sales, customer engagement, and/or mindshare for all businesses involved. The receiving business usually enjoys a new customer, while the referring business obtains a payout for the converting traffic it delivers.
- Native software integrations are more technologically involved types of strategic brand-to-brand partnerships. In order to activate a more personalized consumer experience, some sort of integration needs to be undertaken to share relevant data with the partner (or vice versa).
For example, Ticketmaster has a native software integration with Spotify. If a person is listening to an artist on Spotify, they can tap through content within the Spotify app, see a list of concert events, click on a date, and pass consumers through into the Ticketmaster ticketing experience to purchase a ticket.
These integrations are not advertisements, but rather an enhanced consumer experience. The native software integration links Ticketmaster event and venue data with whatever artist the user is currently listening to on the Spotify app to create an experience that adds value to the listener’s experience.
- Loyalty programs represent a special class of strategic brand-to-brand partnerships. Consumers often indicate that their choice of retailer is influenced by where they can earn loyalty points or rewards. That’s why many enterprises choose to partner with different businesses through their loyalty program.
- Influencers are individuals and brands with a large social media following who promote a business on social channels, blogs, and newsletters, typically receiving
a fixed fee per post and/or a commission for sales generated.
This kind of partnership is seeing an uptick in popularity, as businesses look to connect with younger consumers who look to their peers and opinion leaders on social platforms for advice on what products they advocate for.
- Mobile partnerships represent a red-hot part of the strategic brand-to-brand partnerships landscape. The mobile app space represents 70% of all mobile transactions. It’s no surprise considering users are three times more likely to convert in-app versus the mobile web. Thus, businesses are keen to have partners drive prospects deep into their mobile app experience.
- Corporate social responsibility/charity partnerships are an opportunity for companies that embrace a purpose-driven brand strategy or strongly advocate for
a robust corporate social responsibility program. Smaller companies may not have deep pocketbooks to donate outright, but cause-based partnerships provide an economically accessible way for them to create a partnership while helping causes they care about.
- Traditional affiliates are still very important parts of partnership programs. This type of partnership focuses on businesses that specialize in driving traffic to a company’s owned channels by specializing on providing discounts or incentives to their audience, typically receiving a commission for leads and/or sales generated. To learn more, read our Ultimate guide to affiliate marketing.¹
- Content partnerships, sometimes referred to as commerce content partnerships,² offer a smart, efficient way for publishers to escape the traps of traditional advertising. A content partnership is a mutually beneficial relationship between an enterprise and a publisher — the enterprise leverages a publication’s audience’s trust to deliver relevant brands and services through editorialized content around the products and services they stand behind. The ability to tap into that offering is more important than ever for publishers, as traditional ad models become less effective and publisher revenue continues its decline.
- Ambassador partnerships can encompass anything from customer and employee referral programs, offline locations that promote your products, organic influencers, and more. Ambassadors may sometimes be standalone businesses (like your local bar promoting discounts for ride sharing services), but more often than not, they represent individuals who have an affinity toward your brand.
Making partnerships work
To ensure effective management of partnerships, it is essential to consider all aspects of a business that are influenced by a partner, such as sales management, learning and enablement, business development, operations, and finance.
Effective management of partnerships is achieved through a cohesive framework that encompasses all the activities involved in establishing, strengthening, and optimizing an enterprise’s relationship with its partners.
The partnership life cycle is the term used for this optimized framework.¹
Thankfully, this framework can be applied to all partnerships, so it is unnecessary to consider each partnership as a distinct entity that can only be managed with custom mechanisms.
- Discover & Recruit. There’s a universe of millions of potential partnership candidates out there across the world wide web, so cast a wide net and find the highest potential partnerships. Then, you’ll want to run a recruitment campaign to entice them to join your partnerships program.
- Contract & Pay. Before these partners join your program, you will create a contract with them laying out the rules of commissioning, your program’s terms and conditions and how they will be paid. In order to scale, you’ll want to ensure automated payouts disburse commissions to each of your partners for the valuable conversions they deliver.
- Track. Partners need to be set up with the proper tracking infrastructure so that you can attribute them for driving valuable traffic to all your properties across desktop, mobile web and mobile apps.
- Engage. Properly onboard your partners into your program and turn them quickly into productive, revenue-generating participants. Maintain constant communication with all your partners and stay top-of-mind, informing them about new products, creative, and incentives that make them keep driving traffic your way.
- Protect & Monitor. It’s important for your program to remain constantly vigilant and protect themselves from high risk traffic from bad actors. Compliance issues, such as marketing an expired offer (which sometimes has legal implications), or bidding against forbidden, trademarked paid search keywords that you’ve disallowed in your contract’s terms and conditions must be monitored also.
- Optimize. Long-running partnerships can always deliver more of a good thing. If a partner is delivering a lot of new visitors that end up converting, but does not receive any commission because they are not the last click, adjust your contract to ensure the partner gets rewarded properly so they can keep delivering new prospects. Optimize your overall partner mix, and ensure that a diversity of partnerships exist that are contributing value throughout the entire customer journey.
