8 Benefits of Partnership Marketing
Is partnership marketing really worth it?
Well, in fact, research shows that partnerships are capable of generating more revenue than paid searches.
Partnership marketing is a way of expanding your business by forming mutually beneficial relationships with other companies to improve brand awareness, increase lead generation, and provide a new vehicle for client acquisition. Integrating the best lead generation software can enhance these efforts, maximizing the effectiveness of your partnerships.
If you are thinking about testing the waters and forming a partnership with another brand, these eight benefits of partnership marketing will help convince you of the true power that is partnership marketing.
What is a partnership marketing campaign?
Before we dive into the meat and potatoes of the benefits (and there are plenty), let's take a quick step back and understand the basics of a partnership marketing campaign.
A partnership marketing campaign combines the resources of two or more parties to create a joint marketing program.
The goal of partnership marketing is to create a better campaign than either partner could do alone. This means the partners provide each other with valuable resources for the campaign, such as sales data, customer profiles, access to audiences, and more. They also share the costs and risks of creating this joint strategy.
Types of Partnership Marketing
Each type of partnership marketing has its unique strengths and applications.
Let's take a look at five popular types of partnership marketing.
1. Influencer Marketing
Influencer marketing is a type of partnership marketing in which brands work with influencers to promote their products and services.
Influencer marketing aims to increase brand awareness, boost sales, and create brand loyalty by leveraging a trusted third-party source.
Influencers are people who have large online followings and can help spread the word about your business through social media or other online platforms. They are highly trusted by their followers and can make recommendations for products, services, and brands in ways that command attention from their audience.
The most common use of this type of social media strategy is to get people who already use your products or services to recommend them to their friends and followers over social media platforms.
For example, Tailor Brands has established a significant presence on TikTok through influencer partnerships. Why? Because there are aspiring entrepreneurs all over the platform who can view their content from people they trust and learn about the tools to help build their own business.
Leveraging an influencer is ideal because they have built a reputation for being an expert in their field or niche. Influencers have large followings on social media and create highly valuable content for those who follow them and "influence" to purchase a product or service.
2. Affiliate Marketing
Affiliate marketing is a process of earning commissions by promoting other companies' products and services. Affiliate marketing drives 16% of eCommerce sales in Canada and the US.
Affiliates get paid when they successfully convince consumers to buy something. Affiliate partners often refine their strategies to better resonate with their target audiences, driving more successful conversions. The most popular way of affiliate marketing is by using banners, text ads, and email advertising.
Affiliate programs are generally free to join and offer small payments per sale or lead generated.
For example, Canopy does an excellent job utilizing partnerships to grow the user base for its parental control app. To make it easier to join their affiliate program, they have a dedicated partnerships page on their website to encourage interested parties to connect with them.
Keeping it simple and easy for users to join your affiliate marketing program will increase overall interest in your program due to ease of access and provide better results.
But keep in mind that launching an affiliate program is not a way to outsource your entire marketing to third-party partners. You cannot expect your affiliates to bring all the sales for you. If managed properly, it can be an effective, complementary marketing channel. Create a strategy for your program first and make sure you can dedicate sufficient resouces to running it, and only then decide if affiliate is worth it for your business.
3. Joint Ventures
Joint ventures are a great way to maximize the resources of two companies. By combining your unique strengths, you can produce better results than you would have working separately.
For example, T-Mobile Inflight is a partnership between T-Mobile and Gogo Inflight that provides in-flight Wi-Fi, unlimited messaging, and check visual voicemail on select airlines and flights at no additional cost.
By partnering together and pooling their resources, these two companies can provide their customers with both an excellent service on the ground and in the sky—something neither on its own would accomplish quite so easily.
4. Licensing
Licensing is a type of partnership marketing that involves licensing an existing product or brand to another company. Licensers typically sell the right to use their intellectual property (IP) and receive royalties in exchange.
For example, LEGO has a licensing agreement with Warner Brothers to create and sell LEGO sets featuring Harry Potter characters, props, and movie scenes. This strategic licensing partnership allows LEGO to tap into the massive following of the Harry Potter movie and book franchise.
5. Sponsorship
Sponsorship is a type of partnership marketing that involves two parties coming together to work on a project. It can be an excellent opportunity for both parties to build their brand, share their message with a broader audience, and make more money. To attract new sponsors, you need to send a compelling sponsorship letter that would convince them your project is worth the investment.
Verizon and the National Football League (NFL) have extended their longstanding relationship with a 10-year partnership. Renewed in late 2021, Verizon was named an Official Technology Partner and the Official 5G Network of the NFL.
Verizon 5G Ultra Wideband is now live in select parts of 25 stadiums, providing fans with a faster, more reliable wireless experience.
8 Benefits of Partnership Marketing
Now that we have reviewed a few different examples of partnership marketing, it's finally time to dive into the top benefits of using partnership marketing to grow your brand.
1. Share costs and risks
As a partnership, both parties share the costs of a campaign. This is especially beneficial to startups and small businesses, who might not have enough funds to focus on both marketing and product development.
Let's say you're a startup with an idea for a product that could revolutionize the way people shop online. But you're not sure how to get it off the ground—and even once it's launched, how will you get people to notice?
That's where partnership marketing comes in: by partnering with other companies who have something to offer your customers, you can spread the word about your product and grow faster than if you were on your own.
Sharing risk and costs with partners allows both parties to focus on their strengths and invest in areas where they excel without worrying about covering everything on their own. Partnership marketing is a great way to share risks and costs with your partners, which means you can do more with less. Before partnering, make sure to get a contract e-signed with all the terms and conditions.
2. Reach a wider audience
If you're a small company or brand, it might be hard to reach your target audience independently.
Partnering with another company or social media influencer can make it easier for you to get in front of more people and expand your reach beyond what you could do alone.
Let's say you're a small dog food business that wants to sell products online. It might be tricky if you tried to do this alone, but it would be much easier if you partnered with an online retailer that already has an extensive database of customers and a strong brand.
The breadth of their brand could help get your product in front of many potential new customers. For example, Chewy.com is the ideal platform and partner for an up-and-coming dog food company.
Partnership marketing opens up the possibility of tapping into each others' customer bases, sharing social media and email lists, cross-promoting to your own audiences, and expanding into new markets.
3. Add complimentary skills to your toolbelt
Partnership marketing is one of the best ways to strengthen your brand and achieve your goals. It's important to remember that no company is perfect, and having complementary skill sets can help you reach your goals faster and more efficiently.
Consider two companies that work together: a sporting goods store and a gym. The sporting goods company could use the gym's expertise in fitness training, while the gym could benefit from the sporting goods store's knowledge of sports equipment and apparel. Together, they can provide more value than if working individually.
The benefits of partnership marketing extend beyond just strengthening brands; it also improves customer experience by providing customers with an easy path for finding what they need.
4. Improve your reputation
Being associated with a trusted brand can help improve your reputation. This can be a win-win situation for both companies. You get to share in the reputation of the other brand, and they get to share in yours; therefore, your business can benefit from increased trust, credibility, and authority.
For example, if you are an ecommerce store that has been falling behind in delivering orders on time, partnering with an established business that provides rush courier services could help bolster your reputation among potential and existing customers.
Their accountability and the fact that they can deliver any package regardless of weight, size, or destination will help increase trust with your customers, improve satisfaction rates, and drive repeat purchases.
5. Target new markets
With the help of a strong partner, you can reach new markets in no time. They may have an extensive sales team or incredible brand loyalty that can help you get customers instantly.
The partnership between Hulu, Disney, and ESPN is a prime example of a partnership that can penetrate new markets. Disney can tap into the sports fanbase through ESPN, and Hulu can capitalize on the family audience that Disney holds. This truly is a streaming trifecta.
They can also invest in new marketing strategies, which can be less risky when you have other minds involved in the planning process. As the saying goes, two brains are better than one.
6. Secure long-term mutual benefits
Another advantage of partnership marketing is that it can lead to mutual benefits long-term. In other words, it's not just about short-term goals, like generating leads or sales through the current campaign. Instead, you build a relationship with your partners over time and create opportunities for them in the future.
Licensing is one of the most common long-term partnership opportunities across industries. It allows you to use a company's intellectual property (IP) in your own product or service by sharing revenue with them.
There are many benefits to licensing as a long-term partnership opportunity:
- It allows you to use their IP, which can save time and money for both parties.
- It gives you access to resources that could be difficult or impossible for you to acquire independently.
- You can create better products because you're working with industry experts who have more experience than you do.
7. Provide upsell opportunities
If you're looking for a way to boost your revenue, partnerships could be the answer. Partnering with another company can help you upsell to your customers to increase revenue.
For example, if one of your customers is interested in buying a new phone case, they may also be interested in purchasing a screen protector and a charging cable. Partnering with another company that manufactures these items can boost your revenue by making it easier and more affordable for customers to purchase all three things at once.
Upselling can be done in many ways and with many products. Some examples include:
- Offering accessories or add-ons that match the product being purchased.
- Upgrading features within the same category that you're already selling.
8. Strengthen relationships with customers
The final benefit of partnership marketing is that it can help to build better relationships with customers. As a result of this, you will see an increase in trust and loyalty and improved standards in terms of customer service.
Customers are more likely to buy from you and return to your business if they feel like their needs are being met. They will also be more inclined to spread the word about you because they know that other people won't be able to provide the same level of service or products that you offer them.
Wrapping Up
If you haven't tried out partnership marketing, it's time to consider doing so. The approach has been around for decades and is still a viable marketing strategy that can help businesses reach new growth areas.
Partnership marketing is a highly effective strategy because it enables two or more companies to work together toward a common goal. This doesn't mean that they're necessarily equal partners; in fact, they usually aren't—but they do share resources and strengthen each other's brand presence by joining forces on projects or campaigns.
Partnership marketing has many advantages over traditional advertising methods such as television commercials, billboards, and print ads. For one thing: It costs less money upfront—you don't need big budgets before launching marketing campaigns using this method. When done correctly, business partnerships offer benefits both parties can enjoy: increased visibility for each brand's products or services and increased sales, and, in return, greater profits.