We’re in a world where competition in any industry is rife. There is so much choice, an abundance of options and a new idea doesn’t stay new for long. For many businesses, this makes it difficult to stand out, and ultimately grow. So, instead of going it alone, brands should look beyond sales and marketing to build alliances as a growth driver.
Partnerships are fast becoming a critical lifestream for fast-growing organisations. Forrester notes that “Brands that provide an enhanced partner experience grow faster than their peers, are more profitable, and drive higher customer satisfaction and retention downstream.”
Every enterprise needs a little help from others in different ways; stretching the boundaries of partnerships; working with influencers, media houses, ambassadors to other enterprises to build a relationship where both parties benefit.
I’ve witnessed firsthand how different partnerships forged across enterprises in retail, travel, financial services and more have driven significant revenue growth over and above what’s delivered from their traditional sales and marketing channels.
I want to share a few partnership strategies which show how and why they are becoming a vital business driver.
1. Community-based partnerships
What is it?
Brand A (the Advertiser) partners with a like-minded community, association or membership-based program run by Brand B (the Partner) to offer Brand A’s goods or services to Brand B’s members. When members of the community/association purchase Brand A’s goods or services, then Brand B receives a payout.
Why do it?
Individuals and companies have always felt the need to come together into groups – whether they’re called membership clubs, community groups, trade associations, institutes, unions, etc. The purposes may certainly vary – from embodying a representative voice for the industry to consolidating participation for collective bargaining or lobbying, to simply socialising and learning from each other.
Companies should always be vigilant to spot relevant groups that have a high concentration of their target audience. Proactive brands will want to reach out and establish value-based partnerships with these groups, in order to tap into their highly desirable membership base, while the association opens up another revenue stream.
An example of this is a well-known footwear brand who partnered with an automotive association to offer its members an exclusive discount on their footwear products when they come through the association’s dedicated shopping portal and purchased exclusively discounted products from the advertiser’s site. In order to prevent diluting the exclusivity of the promotion, qualified buyers had to first share their automotive association’s membership id number in order to avail of the discount in-store.
Another client is a global supplier of enterprise software who partnered with various local chambers of commerce. They provide the chambers’ member businesses (mostly small and mid-sized businesses) a discount on the purchase of their latest software suite. This partnership proved to be a very effective way of reaching a large swath of small and mid-sized businesses at scale. Both examples created a win-win for both clients and prove the power that partnerships have on business growth.
2. Affinity-based partnerships
What is it?
Brand A (the Advertiser) forges a partnership with Brand B (the Partner) because Brand B happens to have a target audience with distinct similarities to Brand A’s target audience, even though Brand A and B are in completely unrelated industries. The similarity in profiles might be due to demographics, psychographics, interests, etc.
Why do it?
This is intuitive. One of the big goals of advertising is to reach your target audience in order to raise awareness, build consideration or persuade them to purchase on the news, social and entertainment sites that they frequent. But why should that goal be limited to traditional media relationships?
Partnerships between brands allow two brands in completely unrelated fields, who only share similar target audience profiles, to benefit from each other’s captive audience, and earn revenue from each other.
Marketers should think really hard, put themselves in their target audience’s shoes, do a deep exploration of their audience’s personas, and consider all the related needs of their consumers. When they can empathize with their audience at that level, they can locate relevant brands to target for partnerships of mutual benefit!
A strong example of an affinity-based partnership is an online investment and brokerage site who partnered with a leading airline to offer customers on their loyalty program the opportunity to sign up to investment products. They figured that frequent travellers on this airline had similar enough characteristics with the population with enough disposable income who may be open to investing.
Customers who DO sign up for the online brokerage and begin trading online within the first 45 days earned miles in their airlines’ rewards program. Their partnership leverages their shared target audience and both parties are earning increased revenue by working together.
3. Data-driven partnerships
What is it?
Enterprise A (the Advertiser) forges a partnership with Enterprise B (the Partner), who has a large audience and has a lot of data about them and has created a rich array of audience segments. The advertiser wishes to target a specific segment of the partner’s base.
Why do it?
Audience targeting is not a phenomenon limited to programmatic advertising. Large advertisers themselves sit on a wealth of customer data – from demographic, contextual, behavioural to purchase and spend data and more. Publishers have long recognised that their audience data is their most valuable assets, and businesses are starting to realise this too.
The more data a business collects about its customers, the more audience segments they can offer to potential suitors. This becomes an additional revenue stream for them – they’re essentially competing with traditional publishers packaging their audiences.
As a final example, Impact works with a luxury apparel brand who is constantly searching for high net worth individuals. They approached a number of financial institutions to establish a partnership. As Banks obviously know a significant amount about their clients’ spending habits, they can easily tell which individuals shop at high-end brands – even at the luxury apparel brand’s competitors.
By partnering with the bank, the luxury apparel brand was able to serve offers to clients who fit their luxury profile requirements while they were conducting their online banking. This is banking in style and allowed both brands to reach a completely different slice of their target audience versus what they would traditionally reach through advertising with publishers.
These are just a few examples of the many ways businesses can work together to grow revenue. Partnerships provide a new way of doing business that is challenging the way that businesses have traditionally mapped out their growth strategies, and it is no surprise that partnerships now make up 75% of global commerce.
Novel and innovative partnerships provide sales, marketing and business development leaders with an engine of growth amidst a fast-changing, increasingly competitive landscape, But, one thing is assured; 2019 will see more and more brands take advantage of these strategies to unearth the power of the partnership.