What is partner marketing?
Partners are utilized by technology vendors globally to connect with end-customers since no vendor has the capability to internally manage every customer interaction. The significance of channel partner marketing is crucial in maximizing the benefits derived from these partnerships.
In essence, successful partner marketing guarantees that partners comprehend the worth of the vendor to both themselves and their end-customers, and effectively communicates the value of the customers to the market. Partner marketing fosters partner involvement with the vendor’s brand, establishes brand recognition, stimulates customer curiosity, generates potential customers, and ultimately boosts sales.
The changing global landscape and advancements in business technology have prompted a reassessment of traditional face-to-face channel partner marketing endeavors such as trade shows, conferences, vendor-specific events, seminars, and hospitality ventures. Consequently, there has been a surge in the importance of digital marketing, evident in the increasing emphasis placed by chief marketing officers (CMOs) of major companies on delivering optimal digital marketing experiences to customers.
It is now more crucial than ever for vendors to identify which channel partners are capable of pushing their digital marketing campaigns forward and successfully converting digital leads into sales. Examples of well-known technology brands such as Microsoft demonstrate the heightened emphasis on partner marketing that aids partners in standing out to customers in this changing digital landscape.
To-partner and through-partner marketing – what’s the difference?
The two primary types of partner marketing, namely to-partner and through-partner marketing, play distinct yet interdependent roles. Each requires the vendor to adopt a unique approach, utilizing different marketing activities and resources.
To-partner marketing revolves around helping partners grasp the reasons why they should collaborate with the vendor. It involves addressing the query of “What’s in it for me?” Partners must comprehend what differentiates vendors from their competitors, who may also be working with the same partner. The objective is to establish shared interest and, subsequently, gain and retain the mindshare of channel partners. In modern partner ecosystems, mindshare is determined by factors such as the level of engagement (regular communication), training opportunities, incentives, and streamlined business processes. Mindshare cannot be achieved without mutual interest, so it takes precedence. Typical to-partner marketing caters to all individuals within the account. It delivers value propositions, insights regarding customers and products, training, and promotional materials through various channels, including email, newsletters, e-books, white papers, and social media.
Performing the appropriate type and level of partner marketing throughout every stage of the partner lifecycle is crucial. Failing to personalize content or properly nurture partners in all phases can result in them feeling disconnected, neglected, or discouraged.
It is important for vendors to make sure their to-partner marketing aligns with each partner’s needs and does not rely on a generic approach that is unlikely to be successful, once the suitable potential partners have shown commitment or registered. Understanding all the competing brands and their influence is crucial in order to tailor to-partner marketing proposals accordingly.
Through-partner marketing entails equipping partners with the necessary tools, resources, and assistance to independently promote the vendor’s brand and product messaging in the market. The ultimate objective is to simplify the partner’s task. Examples of typical through-partner activities consist of granting access to a readily adaptable content library, offering event support, supplying delivery tools, and providing pre-packaged execution strategies for demand-generation.
Vendor support should be available to channel partners at all stages of the customer acquisition process. This includes the provision of targeted partner enablement programs that aid in achieving success in through-partner marketing. Assistance may be given in targeting and identifying potential customers, generating leads through content, and offering presales support to develop solutions and secure sales. Vendors may choose to collaborate with a partner marketing agency in order to effectively provide these enablement programs.
The other discussed forms of partner marketing are known as ‘with-partner’ and ‘for-partner’ marketing.
Simply put, with-partner marketing refers to joint marketing initiatives conducted by vendors and their major partners. These programs aim to provide unique customer value by leveraging the combined offerings of their products and services.
The concept of for-partner marketing involves vendors conducting marketing activities to create customer interest and leads, which are later pursued by their partners.
How is partner marketing funded?
Partner marketing is funded in a wide range of ways, which affects the caliber and scale of partners that vendors can attract, as well as the activities those partners are able to perform.
There are essentially three primary funding models for partner marketing.
- marketing development funds (MDF) – this is typically a pre-allocated ‘pot’ of money used by the vendor to fund the development of a market served by its channel partners. Each MDF marketing partner must submit, and obtain vendor approval for, some form of costed marketing plan for any payment to be made
- contra-revenue funds – these are typically accrued by established partners as a percentage of the revenue they generate. Partners need to submit an evidence-based request for approval before the funds are paid
- co-operative funds – these are most often used for shared-cost marketing initiatives, usually defined by the vendor.
It is becoming increasingly challenging to allocate funds for traditional MDF marketing, and its expenditure is subject to more scrutiny than ever. Furthermore, companies often fail to utilize the potentially unlimited contra-revenue rebate associated with partner sales, as they are unsure about how to comply with financial regulations when using this funding.
The current global health and economic issues have brought attention to the fundamental problems linked to conventional funding models. Several prominent technology vendors have acknowledged this challenge and have taken steps to assist their channel partners in navigating through these difficult times.
With the growing importance of digital partner marketing, vendors must be adaptable and facilitate easier access to suitable funding for the right partners. To fully leverage their marketing investments, vendors should prioritize both funding models and a comprehensive understanding of partners’ digital marketing and growth capabilities.
Types of marketing partnerships
In order to achieve the utmost success in partner marketing, it is crucial to choose the appropriate form(s) of partnership that align with your business goals. Partner marketing encompasses a variety of marketing partnerships within its scope.
Affiliate marketing
By engaging in affiliate marketing, you collaborate with bloggers, social media influencers, or other content creators who are perceived as trusted authorities by your target audience. These affiliates or affiliate marketers then endorse your business through their respective channels utilizing content marketing strategies.
Affiliate links are positioned on their website, blog, or social media page for your business. Subsequently, when a purchase is made through their link, affiliates receive a commission payment.
Channel partner marketing
Channel partners refer to any external businesses or individuals who aid in promoting and selling your products or services to larger audiences and unfamiliar territories.
Your channel partners consist of distributors, retailers, resellers, and wholesalers who buy your products in large quantities to sell in their respective marketplaces.
Additionally, the category encompasses individual brokers or agents who are responsible for facilitating partnerships between you and other enterprises.
Referral partnerships
Referral partners possess direct familiarity with your brand and commend your products or services to individuals they have established connections with, in return for receiving commissions for each successful sale.
Unlike an affiliate partnership, affiliates promote your business to a wide range of individuals who visit their channels, the majority of whom they have no personal acquaintance with.
Even though referral partnerships may generate fewer leads compared to other partnerships, the recommendations they provide hold significant influence.
Because of their preexisting relationship with your referral partners, referred leads have trust in their word. As a result, they are highly inclined to make purchases from your brand and are also more likely to stay as long-term customers.
Strategic alliances (strategic partnership marketing)
A strategic alliance, also known as a strategic partnership, refers to a deliberate collaboration between two businesses that share common values. Although both businesses retain their independence, they combine their resources to expand their reach, enhance their brand presence, and collectively achieve goals that would be challenging to accomplish individually.
Strategic alliances, such as co-branding, co-marketing, and affinity marketing, are interchangeable terms that refer to the same concept.
- In affinity marketing, a business teams up with a non-competing, but related, brand to offer benefits to both their audiences.
- These benefits could include products, services, or unique perks from one brand that are made available to customers of the other brand.
- Affinity marketing campaigns carry the branding of both businesses, and position each business in front of a new market.
Doritos and Taco Bell successfully implemented affinity marketing through their collaboration on Doritos Locos Tacos. The partnership thrived due to the brands’ shared target audience, consisting of budget-conscious young individuals seeking convenient snack options.
As long as the partnership is formed cautiously, strategic alliances have the potential to be advantageous for businesses of all kinds. It is crucial for businesses to ensure that both brands will derive equivalent benefits from the alliance, that the partnership aligns with the interests of both brands’ target audiences, and that it brings novel advantages to both audiences.
