Marketing

Partnership Marketing: A Beginner’s Guide

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Phil Grossman

3 Mar, 2020

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No matter what task we’re trying to accomplish in life, we generally have two options: go it alone or find a partner.

Marketing a business is no different. Although facing it alone allows for complete control over your product and creatives, finding a partner in crime who can add their unique talents to the melting pot can elevate your marketing efforts to new heights. Indeed: a well-coordinated partnership marketing campaign can bring the best of both brands to the table and reach a broader audience than either brand could reach on their own.

In this post we’ll discuss what partner marketing is and how you can use it to grow your business.

What is partnership or partner marketing?

Partnership marketing is a joint marketing effort between two or more brands that seeks to benefit all parties involved. Generally, partnership marketing campaigns are between brands that have some degree of market overlap but are not direct competitors.

For example, a credit card company might partner with an automaker. People who buy cars also tend to use credit cards, but Toyota isn’t going to lose a sale because someone decided that driving their new Amex card to work will do just fine. 

The different types of partner marketing campaigns are numerous: there’s affiliate campaigns, distribution campaigns, and joint products, among others (we’ll get to those later). For now, let’s keep things a bit more general and take a look at the benefits of partner marketing and some of its disadvantages. 

Partnership marketing pros and cons

Although the benefits of partner marketing are many, the practice isn’t without its compromises. 

Pros

  • Reach a larger audience: One of the biggest benefits of partnership marketing is the ability to get as many eyes on your product as possible. When you partner up with another brand, you expand your reach to its audience as well. Depending on how big its audience is, you can potentially double, triple, or quadruple your reach! No matter how many followers your partner has, you’ll almost always be able to increase your reach to some extent. 
  • Develop new ideas: Sometimes, the best products come when you put two totally different things together, like spoons and forks — what would all the mall food courts do if sporks weren’t a thing? Even if you don’t end up creating something as revolutionary as a new eating utensil, you may discover that you’ll come up with an idea that neither brand would have had on its own. Two heads are better than one, after all. 
  • Spread out the expenses: When you partner up with another brand, you’ll often end up splitting the bill, and that means reaching a larger audience for a lower price.

Indeed, Patricio Quiroz of Code Authority knows this first hand: “I like how partner marketing can broaden the reach of a company’s target audience which will help in creating brand awareness on a very low budget if any. This can be a very cost-effective way of doing some free marketing and could potentially bring more customers to your business. “

  • Build long term relationships: Finding a brand you can work with longterm is a great outcome. Even if one specific campaign doesn’t stick as well as you’d have liked it to, simply knowing you’ve found another brand that operates on your wavelength can make braving the next battle that much easier.

Kean Graham from MonetizeMore notes that “partner marketing tends to have a long-term focus, which is great for achieving incredible results together.”

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Cons

  • Creative conflicts between brands: You may be convinced that an ad campaign all about Howard, the monocle-wearing fish, is the right direction for your sportswear brand, but your partner may favor a fish-free fellowship. If that’s the case, you’ll have to figure out whether you’re ready to say bye-bye to Howard to keep your partnership afloat. Occasionally, these disagreements can lead to outright conflicts.

Patricio Quiroz notes that “one downside to partner marketing is that you’re essentially marketing for another company, which might end up [causing] a conflict if there is poor communication, and they end up disliking your marketing strategy or campaign efforts.” 

  • Splitting profits: In some cases, you may develop a product or service together, or engage in some other form of marketing that results in profits being split between the two of you. So, you’ll likely still reach a larger audience, but the payoff from every sale may be smaller. 
  • Your partner’s missteps can reflect badly on you: When you cosign for a car loan, and the other borrower doesn’t make their payments on time, your credit score takes a hit even though it’s not your fault. Similarly, when you enter a partnership with another business, you become associated with them. If your partner decides to run a seriously politically incorrect marketing campaign or makes some other misstep that’s entirely separate from your joint efforts, you can still end up getting the flack for it.

According to Bryan Stoddard of Homewares Insider, “I think that the biggest downside of this kind of partnership is when one side of the deal isn’t very reliable. Unfortunately, this can happen, and in some situations, it might seriously damage your reputation with your clients if you [miss] a deadline or deliver half-finished content or service. The best way to avoid this is to take small steps and see what kind of person is your potential partner in marketing.”

Partner marketing vs. channel marketing

If you’ve been looking into advertising techniques, you may have heard of channel marketing. Partner marketing is very similar to channel marketing, but there are some differences. 

So, what is a channel partner in marketing? A channel partner is a business that agrees to resell your product or service in some way without actually collaborating with you on the product itself. 

For example, iPhones come standard with the Facebook app, but the two brands didn’t collaborate on a totally new product for iPhone users. In this case, Facebook and Apple would be considered channel partners. Nike and Apple, however, are considered to be engaging in partnership marketing because they collaborated on designing a Nike version of the Apple Watch. 

Examples of partnership marketing

So, now that we’ve got a general overview of what partnership marketing is, let’s dive into some specifics: as a small business owner or marketer, what types of partnership marketing can you engage in?

Content marketing

Content marketing partnerships are all about creating content that is relevant, engaging, and valuable to both brands’ audiences. The content can be any type: blog posts, ebooks, videos, and even virtual reality experiences are all valid types of content that can be collaborated on. If you’re an athletic drinkware brand, for example, you could collaborate with an athletic brand on an informational video series about how to maintain a healthy lifestyle that mentions breathable clothing and tips to stay hydrated during workouts. 

One real-world example is National Geographic’s collaboration with Tourism New Zealand. Both brands collaborated on content that explored the rich variety of opportunities available to New Zealand tourists. 

Co-branding

Co-branding encompasses a wide variety of marketing strategies with one unifying factor: both brands place their names or logos on a single product or service. This could be as simple as a hypothetical business named Mary’s Cupcakes releasing a limited-run peanut butter version that’s branded as “Mary’s Cupcakes Made with Dylan’s Famous Peanut Butter.”

As mentioned earlier, one of the most famous examples of co-branding is Nike and Apple’s collaboration on the Nike version of the Apple watch.

Bryan Stoddard noted that Apple is no stranger to co-branding. In addition to its partnership with Nike, “Apple has also partnered in the past with Microsoft, to deliver the Office experience to their clients, and at the time that seemed to me as a huge deal.”

Distribution partnerships

Distribution partnerships occur when one brand promotes another at the distribution level, usually by stocking its products, offering discounts, bundles, demonstrations, or information about the partner brand’s products. This can either occur in-person or online. 

Any retailer that stocks another brand’s products is in a distribution partnership. So, next time you go to the supermarket, look all around you, and you’ll find tons of examples of this type of partnership marketing.

Patricio Quiroz noted “a good example of partner marketing is Sirius XM marketing for car companies on behalf of their connected vehicle services. They provide email marketing campaigns that help to inform various car owners the benefit of [its] services and more.”

Affiliate marketing

Affiliate marketing is a form of marketing partnership in which one brand promotes another and receives a commission for every purchase that they procure. This is extremely popular among bloggers and influencers, and it’s one of the primary ways that they earn income. In most cases, bloggers or influencers will make a post or email campaign about a specific product, and every time someone purchases it using that link, the poster receives a kickback.

Sponsorships

If you’ve ever watched a sporting event then you’ve seen sponsorships. Sponsorships are a way for businesses to increase brand awareness by financially supporting an event, personality, or product. In exchange for the financial support, the sponsor’s name and logo is displayed on the product. 

For example, when ESPN says a game is “made possible by the Coca Cola Company” that’s sponsorship marketing in action.

Product placement

Sometimes, all you need is to let people see your product, even if it’s only subliminally. Product placements are exactly what they sound like: they’re advertising campaigns in which one brand places its products in another brand’s media. Frequently, this occurs in movies and TV shows, but brands can also get their products inconspicuously placed in social media posts as well.

One of the most famous examples of product placement was the use of Reese’s Pieces in Steven Spielberg’s E.T in the scene where the main character, Elliot, uses a trail of the candies to lure E.T to him. Originally, Spielberg hoped to use M&M’s, but Mars declined the partnership offer. Spielberg approached Hershey, which accepted, and now Reese’s Pieces is codified in movie history — that’s some pretty big exposure!

Licensing

Licensing means getting permission to produce or sell products or content that utilizes another brand’s intellectual property. In exchange for granting this permission, the licensor receives royalties from the licensee. 

One of the most common forms of licensing is music licensing, in which an artist agrees to provide a license to a film or TV production company for use of a song in a TV show or movie. This is quite similar to product placement, but the artist receives royalties, not just exposure or a lump sum payment. Other forms of licensing include merchandising, which is popular among T-shirt and collectibles brands — think Star Wars action figures, memorabilia, and T-shirts. 

This Star Wars Lego set is a prime example of licensing. 

White labeling

White labeling is ubiquitous in supermarkets and department stores — when you see generic, store-branded medication, food, or other toiletries, you’re looking at examples of white labeling. In a nutshell, white labeling means that one brand produces a product for another, and the receiving brand puts its own name on the box. In other words, the producing brand gives its partner a blank “white label”, which can be filled out to the receiving brand’s liking. 

This can of kidney beans from the Whole Foods store brand is an example of white labeling in action. 

Influencer marketing

Influencer marketing goes hand in hand with affiliate marketing and sponsorships. It tends to go one of two ways: either the influencer makes a post with an affiliate link or a brand pays the influencer upfront for a post featuring its products. The latter is more popular among influencers, but the former isn’t unheard of. In many cases, both routes are combined.

Here, we see Instagram influencer Lucie Fink Morris in a post sponsored by zola. 

Loyalty programs

Loyalty partnerships occur when a brand allows its customers to redeem their loyalty program reward points for another brand’s products. So, if you go to Jordan’s Jam, buy 50 jars of jam, and get a $15 reward that’s redeemable at Mary’s Cupcakes, that’s a loyalty partnership. 

Loyalty programs can work well for high-end brands that don’t want to sully their images by running cashback offers or frequent sales. It provides a way to give some serious discounts without actually bringing money into the picture. 

Stop & Shop runs a successful loyalty partnership program with Shell. For every 100 points that Stop & Shop cardholders receive, they’ll get 10 cents back, which is redeemable at select gas stations and Shell stations. 

Wrapping up

Partnership marketing can expand your reach and attract new customers, but it does come with its risks. Whenever you enter a partnership, you run the risk that your new collaborator will hold you back or hurt the progress you’ve already made with your business. Whenever you’re considering a new partnership, make sure you’ve carefully scoped out your potential partner and set clear goals for what you want to achieve.

Once that’s all sorted, roll up your sleeves, get your hands dirty, and let the creativity flow.

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