Doing market research, promoting, advertising, and building relationship, all these processes are vital for a successful marketing campaign. But how can collaboration with another company enhance these processes and help your brand get more exposure and reach wider audiences?
You can find the answer and plenty of more valuable information on partner marketing in the article below. We will leave no stone unturned and give you all the necessary information to help you find the right partner and develop the ideal marketing strategy for your brand.
Take your sits, get comfortable and welcome to your partnership marketing introductory class.
What Is Partner Marketing?
Partner marketing is a mutually beneficial strategic collaboration between two partners with the aim of accomplishing the marketing goals of both parties involved. Such goals may include reaching new audiences, growing brand awareness, attracting new clientele, and strengthening the relationship with the existing customers of both brands.
As a marketing model, partnership marketing is very effective. It promises a high probability of conversions because it allows both parties to promote their brand to the curated audience of their partner. Consumers are more likely to be attracted to a brand promoted by someone they like and trust, which is the basic principle partner marketing strategies are built on.
Marketing partnerships can be established between two businesses, but also between a business and an individual public figure. Most influential individuals with a large number of followers have some sort of partnership or affiliation with a specific brand, and all of them are examples of some type of partner marketing.
Types of Partnership Marketing
Depending on their individual marketing goals and strategies, most brands utilize one of the following partner marketing types.
Affiliate Marketing
Affiliate marketing is an online partnership marketing model in which one party promotes the products or services of the other and receives compensation.
Most affiliate marketing partnerships comprise a company and an online content creator, such as a blogger, YouTuber, or another type of internet influencer that can leverage their online or social media presence to influence their followers.
Affiliate marketing is a pay-per-performance type of partnership where the online marketing partner, known as the affiliate, only receives commissions when qualifying actions like clicks, impressions, or sales take place.
For example, a YouTuber reviews a product and leaves an affiliate link that takes the viewer to the company’s website, where they can purchase it. For every sale generated through the affiliate links, the YouTuber receives commissions.
Stats show that affiliate marketing is a top three revenue source for 31% of US publishers, while it is the biggest source of income for 9% of them.
Brand Ambassador Programs
In many ways, brand ambassador programs are very similar to affiliate marketing. Both of these marketing partnerships revolve around an individual promoting a company’s services or products to their audience and getting compensation in return.
However, while anyone with an internet connection can easily become an affiliate, businesses have a more exclusive relationship with their ambassadors, so not everyone gets a chance.
When creating brand ambassador marketing partnerships, most companies only consider individuals with an established online personality with a large audience. Moreover, they are looking for someone who understands and has a passion for marketing and their brand.
As an inbound marketing partner, brand ambassadors are expected to promote the brand they are affiliated with both online and offline. They usually attend product launches and other events where they can focus on building relationships, which means the gig requires professionalism and good communication skills.
Furthermore, unlike affiliates who only earn through commissions, many ambassadors get paid hourly, per attendance, per post, etc.
Interestingly, the data from two recent surveys reveals that 3% of consumers would purchase something endorsed by a celebrity. On the other hand, 82% of consumers say they are very likely to follow something recommended by a micro-influencer.
Co-Branding
Co-branding is a partner marketing strategy in which two brands work together to create and market a new product.
Co-branding projects usually involve the release of a single product in the field of expertise of one of the brands. Each marketing partner’s role is to bring extra quality by enhancing the product with its own expertise in an entirely different field.
Co-branded products carry the logos or other signature marks of both brands, indicating that they have the strengths of both companies, which can be a very effective marketing strategy. It highlights the fact the product was created using collaborative resources and brings an additional value.
Therefore, while co-branding partner marketing allows both brands to appeal to each other’s clientele, it can also help them extend their reach to a new customer base.
The findings from a recent study indicate that 71% of consumers feel positive about co-branding partnerships, while 43% say they would likely try a product co-branded by a brand they feel positive about and another brand.
Distribution Partnerships
A distribution marketing partnership is an agreement between two businesses where one of the partners uses the distribution channels of the other in exchange for a fee.
Distribution partnerships are most commonly made between brands that are targeting a similar audience, but one of the brands is significantly better established than the other. The smaller brand pays the larger brand to use its distribution channels in hopes of reaching a wider clientele and growing.
However, channel partner marketing can take other forms as well, like:
- Two companies that sell similar products create a bundle and offer it as a package deal benefiting from each other’s clientele
- Two brands create a joined social media giveaway that requires users to follow both brands to qualify and earn a prize
The success rate of distribution partnerships is backed up by the most recent data that indicates that 77% of companies who use co-seller models report direct or indirect profit increases since they implemented them.
Joint Ventures
Much like co-branding, a joint venture is a partnership marketing strategy that revolves around two brands collaborating in the creation and marketing of a new product. However, while co-branding implies working together for a single product release, joint ventures usually involve two brands working together on a long-term project in a completely new business entity.
Moreover, joint venture marketing partnerships are created with the goal of entering a completely new market, one that neither of the brands have previously competed in. Using collaborative resources and joint marketing efforts allows the companies to have a more effective marketing campaign than if they did things independently.
One study suggests that over four in five joint ventures are at least somewhat successful, and only 19% of companies that engaged in them say they did not benefit at all from the partnership. In comparison, 25% of companies who tried joint ventures say their expectations were not met, but the partnership did bring some benefits to the companies.
Furthermore, in 23% of joint ventures, the expectations of one partner were met or exceeded, and in 30% of the cases, the partnership either met or exceeded the expectations of both partners.
Licensing
A licensing partnership is a B2B partner marketing strategy in which one company acquires the right to use another company’s intellectual property and sell its products under its branding in exchange for a fee or royalties.
Licensing can help licensees build relationships with the established clientele of the licensor and potentially increase their sales by affiliating themselves with a brand they are already a fan of.
On the other hand, in addition to the extra revenue, the licensor can also benefit from the increased visibility and extended market reach.
According to the most recent report, 40 global brands earned more than $1 billion in 2021, just by selling their license rights. The total yearly revenue generated from licenses was $260.8 billion, with brands from the entertainment industry generating the most, or $115.8 billion.
Loyalty Programs
Unlike most entries on our list, loyalty programs are an example of a B2C partnership marketing strategy where the customers themselves are the partners. The marketing field covers more than just advertising, and building relationships, as well as customer retention, are fundamental aspects of it.
Loyalty programs are the most popular partner marketing strategies brands use to earn their customers’ devotion and encourage repeat purchases. It usually involves incentivizing large or frequent purchases with discounts, coupons, cashback, exclusive deals, free gifts, etc.
Recent research on customer loyalty suggests that loyalty program members spend more than non-member customers in 95% of businesses. Moreover, in 60% of the cases, they spend two to three times more than non-members. Finally, the data suggests that loyalty program members generate 43% of companies’ annual sales.
Product Placement
Product placement is partnership marketing that involves the collaboration between brands and media producers. When some brand’s product is publicly displayed in movies, tv shows, music videos, or video games, this is an example of product placement.
The idea is to reach greater brand visibility and awareness by subtly advertising the product in the visual media produced by the marketing partner. Moreover, product placement campaigns expect better reception of the product since it is featured in media content they enjoy more than simply watching an ad.
In exchange, the partner gets financially compensated and has the credibility of their content enhanced with real-world products.
The results from a recent survey indicate that product placement marketing is generally well-received by the audience, at least better than other more intrusive advertising. Namely, 37% of US viewers have a favorable, and 40% have an unfavorable attitude towards product placement marketing.
In comparison, only 21% of US viewers have a favorable attitude towards ads that interrupt what they are watching, and a whopping 67% have an unfavorable attitude towards them.
Referral Partnerships
Marketing experts understand the importance of word-of-mount referrals and how they can affect lead and sales generation. As a result, they can create an entire partnership marketing strategy based on referrals and make it mutually beneficial to both brands.
Two businesses from the same industry can easily partner up and send their existing customers each other’s way. When their referrals result in a sale, they get a percentage of the profit, making their partnership mutually beneficial.
Here are some stats that will help you understand the importance of referrals:
- 84% of B2B decision makers believe the referral is the start of the buying process
- 71% of frontline sales, 75% of sales leaders, and 70% of marketing experts report that referrals have higher conversion rates.
- 69% of frontline sales, 70% of sales leaders, and 67% of marketing experts believe that referrals close faster.
- An equal percentage of 59% of frontline sales, sales leaders and marketing experts believe that the lifetime value of referred customers is higher.
But only 30% of companies have a formalized referral program.
Sponsorships
In sponsorships, one brand is publicly advertised in front of the audience of its marketing partner in exchange for financial support. The main goal of sponsorship marketing is to increase brand awareness and visibility by reaching out to a broader audience through the popularity of the marketing partner.
There are many different kinds of sponsorship deals though the sports industry has some of the most popular examples. All of the largest sporting events are sponsored by several different brands whose logos are displayed all over the stadiums and the televised broadcasts.
However, sponsorships exist outside of sports as well and are a very popular marketing strategy utilized in the music, art, and technology industries and the non-profit sector.
Since not every company has the finances to sponsor the Super Bowl, many smaller brands create community marketing partnership deals to support local events like festivals, county fares, marathons, youth theatre productions, etc.
Statistics show that the global sports sponsorship market in 2021 was estimated at $64.8 billion. Future projections predict that the market will continue growing throughout the decade and reach $112.2 billion by 2030.
Benefits of Partner Marketing
Joining forces with someone can be advantageous for your marketing strategy in multiple ways. Here are the five biggest benefits your business can reap by partnering up with another brand.
Instant Access to Your Marketing Partner’s Audience
Businesses continuously try to expand their brand awareness by creating strategies to reach new audiences. It is an ever-ongoing process that takes a lot of time, dedication, and effort to achieve tangible results.
Collaborating with a partner that already has a loyal customer base allows businesses to tap into a whole new audience in a single stroke.
Easier Entry Into New Markets
Creating marketing partnerships with businesses from another industry can be quite tricky, but it is well worth it as it can ensure a smoother entry into new markets.
Expanding reach is one thing, but entering a new market is more difficult, particularly when the targeted audience is entirely different from the existing clientele. Working with a partner with the necessary experience and resources for success in the market can make things much easier.
Reduced Financial Risk and Cost-Effectiveness
All business decisions, including marketing strategies, involve a certain degree of risk, but with the right partner marketing plan, companies can reduce financial risk to a minimum.
Namely, some marketing partnership types like affiliate marketing, loyalty programs, and referral partnerships are performance-based, making them low-risk by nature. In other words, they don’t require any investment upfront, and businesses only pay their affiliates after a desired action has already taken place.
Moreover, in other types of partnership marketing, like co-branding and joint ventures, the resources like expertise, distribution channels, and marketing efforts are shared between the two partners, which means the risk is also shared. Advertising partnerships imply shared marketing costs, which is more cost-effective than doing everything alone.
Better Relationship With Your Existing Customers
While attracting new customers is always a priority, retention and improving the relationship with the existing clientele is equally as important. Businesses with successful partner marketing strategies utilize their collaborations to earn the devotion of their customers.
By using better distribution channels, offering a new line of products under a license, or enhancing their old products with the added value their partner provides, they increase customer satisfaction, which leads to more repeat purchases and customer recommendations.
Higher Conversion Rates
Finally, by leveraging the combined strengths of the two partners, successful marketing partnerships can lead to higher conversation rates and improved sales numbers.
By expanding brand visibility and awareness, penetrating new markets, and encouraging repeat purchases, marketing partnerships can help companies achieve their business objectives and be successful in their industries.
How to Craft a Partner Marketing Strategy
If you are interested in developing partnership marketing for your brand, check out the following tips that can help you create a successful strategy.
Choose the Right Type of Partnership for Your Business
Let’s get one thing out of the way from the beginning. Not all businesses can benefit from a marketing partnership. If you can’t see how partnering up with another brand can bring your company success, there is no reason to force things.
For example, an affiliation with a digital marketing partner that can target the wrong audience is pointless and won’t help you achieve your objectives more quickly and efficiently.
You know what your business needs, and now that you have a better understanding of the different partnership marketing types, you should be able to make the right choice.
Choose the Right Partner for Your Business
Once you have decided what kind of partnership you are looking for, you need to find your ideal marketing partner. Finding a brand from your industry is not mandatory, and you can partner up with brands outside your expertise as long as you find common ground and share similar goals and objectives.
What’s more important is to find partners that share your vision and bring additional value to your strategy. In addition to expertise, your partner should have the right attitude and view your partnership as a team effort. The two of you should complement each other and use your combined strengths to create an enhanced partnership marketing strategy.
Align Your Objectives With Your Partner’s
While discussing your new partner marketing strategy, make sure you clearly state your own expectations and understand your marketing partner’s expectations regarding business objectives and goals.
All the important details, like terms and conditions, responsibilities, budgets, and timeframes, must be made clear and agreed upon before you officially start collaborating. It is a good idea to write your aligned objectives down and keep copies of your agreement to avoid future conflicts.
Moreover, it is recommended you plan for future roadblocks now and develop a strategy in case one of the partners has a hard time meeting their goals.
Set Measurable Goals and KPIs
The best way to make your expectations clear to your marketing partner is to create goals that can be measured. Using benchmarks, you can communicate to each other precisely which metrics demonstrate success and when your objectives can be considered as met.
You should disclose specific details like how many leads or what conversion rate or profit margin you expect by the end of the quarter.
During your campaign, use KPIs to monitor performance and see if your partner marketing plan is on the right track or an intervention is necessary.
Support Your Partner
The success of your marketing partnership will heavily depend on your relationship with your partner. It is important to remember that they are not the competition, but a part of your team, and their success will likely translate to success for your brand as well.
Keep an open line of communication and treat your partner the way you expect them to treat you. If they have difficulties reaching their goals, offer your help.
Consider providing additional resources, or slightly adjusting your strategy to help them become more effective and improve their results.
If things start to go south, make sure you did your best to support your partner before considering terminating your marketing partnership.
Partner Marketing Campaign Examples
Some of the biggest names in the corporate world have relied on partner marketing to build better relationships with their customers. Here are a few case studies that can help you understand how to develop a successful partnership marketing strategy.
Amazon Associates
Amazon Associates is one of the most popular affiliate marketing programs in the world. As one of the first of its kind, affiliate marketing on Amazon played a key role in establishing the ecommerce giant as the world’s largest online retail seller, and as such, it is a classic example of successful partner marketing.
It was initially released all the way back in 1996 when ecommerce was still in its inception. The win-win nature of affiliate marketing was well-received by the internet users who promoted Amazon products to earn some extra cash online and created one of the world’s top 10 brands in the process.
Samsung and BTS
The world-renowned K-pop sensation BTS created a partnership with technology giant Samsung by becoming their global brand ambassador. Even though both brands are from South Korea, they have global recognition and are well-established names in their respective industries.
However, the audiences they are targeting differ vastly, which means that their partnership not only makes sense, but is a genius marketing move. It was a particularly good social media marketing strategy for Samsung, allowing the company to reach tens of millions of BTS’s followers and significantly expand its reach to new markets and audiences.
Nike and Apple
One of the most popular co-branding partner marketing examples was the successful collaboration between Nike and Apple. The two industry leaders from entirely different industries joined forces in 2006 and released the Nike+iPod Sports Kit, which was their first product, and later become a series of products focused on combining the strength of both brands.
The partnership was also a huge success in terms of marketing, and the relationship between the brands still exists today. Their collaborative marketing campaign was well-received by the public, and the Nike+ app is currently one of the most popular fitness apps on the App Store.
Starbucks and PepsiCo
America’s favorite coffee brand started its business all the way back in 1971, but it wasn’t until the 1990s that its expansion truly began. Its current success is largely due to a few brilliant marketing moves during this period, among which, its distribution partnership with PepsiCo.
At that time, PepsiCo was already established as a global leader in the food and drink industry and had the channels that Starbucks needed to grow. This led Starbucks to grow out of its traditional brick-and-mortar stores, and into the homes of its consumers, increasing its reach significantly.
Lego and Star Wars
When it comes to licensing, there are so many partnership marketing examples to look at, but we decided to go to Star Wars and Lego’s collaboration. The Danish kid’s toys industry leader acquired the Star Wars license in 1998, and their partnership is still ongoing today.
By gaining the rights to create toys based on the timeless Star Wars characters, Lego gained access to a massive and passionate fan base from all generations who are eager to buy anything related to their beloved franchise. Star Wars, conversely, ensured their brand will be recognized by future generations who play with Legos from the smallest age.
Delta SkyMiles
While Delta Air Lines has had its fair share of successful partner marketing programs, its loyalty program, Delta SkyMiles, is arguably its biggest success. With over 100 million members, it is one of the world’s largest and most popular loyalty programs.
In addition to earning the devotion of its clientele, the Delta SkyMiles program has done wonders for the airline company and its global visibility. Moreover, it opened the doors for Delta Air Lines to collaborate and create partnerships with numerous other businesses like credit card companies, hotels, rental agencies, retailers, etc.
Partnership Marketing Statistics
Finally, let’s look at the most recent data on partnership marketing and learn from the facts. What are the benefits and challenges of partnerships, and what are the expectations of companies with partners?
55% of partnership marketing professionals cite increased revenues as the main benefit of partnership marketing.
While more than half of partnership pros point to revenue growth, exactly half, or 50% of them, point to increased brand awareness as the main benefit of marketing partnerships. Other benefits, like improved customer retention, access to a higher market share, and increased conversion rates, were also cited by 37%, 35%, and 34% of the surveyed partner marketing professionals.
The lack of resources for execution is the main challenge in executing partner marketing programs or initiatives for 56% of companies.
According to the results of a recent study, this is the most commonly cited challenge among companies with partnerships. Furthermore, the data shows that 50% of the surveyed companies report it is challenging to obtain data they can use to measure their success, while 44% point to the lack of focus and execution from their contact partners as the main challenge.
23% of companies with marketing partnerships expect their partner attributed revenue to increase by more than 20% in 2023.
The latest statistics show that only 2% of these companies expect the revenue gains attributed to their partner to remain unchanged this year. In comparison, 40% of them anticipate an increase of between 1% and 10, and 35% expect a more significant increase of between 11% and 20%, by the end of 2023.
Only 6% of companies plan on decreasing their partner spending in the 24 months following 2022.
The findings of a recent survey indicate that the vast majority, or 72%, plan on increasing their partner spending, while 20% plan on it to remain the same. Moreover, the stats show that an improved social media presence is a top-three priority in the partner marketing strategies for 42% of the respondents. Branding is also a top-three priority for 40%, content development for 37%, demand generation for 34%, and 33% cite events as one of their three main priorities where their partner marketing budgets will be directed.
The Bottom Line
In summary, marketing partnerships can be beneficial for businesses of all sizes and industries as long as they are developed and executed correctly. It is essential to find a partner that will be happy to align their goals with yours and maintain and healthy relationship that will be equally beneficial for both parties.
As long as everyone’s happy with their end of the agreement, partnerships can be leveraged to increase visibility, reach wider audiences, enter new markets, and ultimately, achieve higher conversion rates and gain a loyal customer base.
