Brand-to-brand partnerships are a significant area of interest for organizations looking at new ways to engage customers. However, it seems to be an area where there is either great success or great struggles for marketers. The way a brand approaches partnerships can have a significant impact, and supplier partners can assist in this initiative in a variety of ways.
Loyalty360 spoke with supplier members for their insights and perspectives on ways brands should best incorporate partnerships into their business strategies, how to make them beneficial to all parties involved, and how partnerships can boost customer loyalty.
The team at Kobie encourages its clients to embrace partnerships as an emerging differentiator in today’s loyalty programs. Says Travis Boisvert, Associate Vice-President of Partnerships, “In the same breath, we urge them to have an awareness of what they are trying to accomplish by partnering with another brand. Partnerships can provide any number of benefits - from expanding reach and awareness, to creating new revenue streams, to enhancing the member experience, etc. - so narrowing in on the why and what can help define the who and how.”
In the same vein, the Lacek Group always starts with why—and then goes deeper.
Amy Farsht, Senior Director, Partnership Marketing, for The Lacek Group explains, “Clients often come to us with specific brands in mind for partnership. While we applaud the enthusiasm, our approach will always be to take a step back and ask, ‘why partnerships?”
Once that is established, the team develops a strategic roadmap where the partnership vision and strategy support the client’s enterprise loyalty goals.
“Many times, brands on the original list do end up on the final partner recommendation,” says Farsht. “However, it’s important to build a framework on which all potential partners can be consistently assessed. That foundational structure is an essential tool, especially when your team regularly receives partnership requests.”
At Untie Nots, it keeps the customer at the center of the partnership equation. Ken Kaufmann, Managing Director, Untie Nots, explains, “Our platform was built originally for the grocery industry, where retail brands and their suppliers, consumer product brands, work in concert to market, promote, and ultimately reward end-customers. In fact, our solution was designed to address several pain points within this partnership that have developed over time with the shift towards customer centricity and the need to generate incremental sales and profitability for both value chain partners.”
Finding the Right Fit for your Partnership
For brands venturing into partnerships with other brands for the first time, the task can be confusing without a clear starting point. Eduardo Labanca, VP, Global Account Management at Iris® Powered by Generali, recommends brands do their due diligence to ensure there is alignment with the other brand(s). For instance, a brand known for its exceptional customer service would not do well to partner with another brand that is known for poor, or even average, customer service. The only exception would be if there was some strategic objective for doing so (even then, proper marketing should be incorporated).
He cautions, “Whether the attribute is related to service, technology, security, quality, etc., be mindful that the adage ‘birds of a feather, flock together’ applies here, and your customers may start to unnecessarily question your brand if the two brands seem to represent very different things.”
Farsht recommends organizing your support team. “Partnerships cannot exist in a vacuum,” she points out, “You’ll need all of your business partners (Marketing, Legal, Tech, Data, etc.) to support your vision. Bring those stakeholders on board from the beginning, get their feedback, and ask about their concerns.”
However, it is best to remember that one brand’s trash is another brand’s treasure, so brands should not get discouraged if a potential partner turns them down.
She explains, “I recall an instance where my client was devoted to securing a partner in a very specific category. We approached the top two brands with the concept. One brand did not get the connection and turned us down. The other brand immediately understood the vision and a partnership was born. Truth be told, the brand that understood the ‘why’ was our top choice, so our client was thrilled!”
Kauffman advises brands do their homework on what the partnership will bring to the other brand. “Is it incremental sales with a targeted customer segment?” he asks. “Is it higher levels of profitability? Is it building brand awareness? Make sure there is a match between the priorities of both partners and what the partnership can really deliver.”
He gives this example. “In grocery, suppliers are looking for new promotional approaches that (i) are digital first, (ii) reward shoppers for incremental behavior and not just for doing what they were already going to do, and (iii) can be measured in real-time so adjustments can be made to optimize performance and ROI. This is what we allow our retail clients to deliver to their supplier partners.”
“Not all partners are created equal, and you must consider both company fit and member fit,” Boisvert advises. “We assess fitness across a number of attributes, including technical capabilities, market access, cultural alignment, brand awareness, social impact, and more. Further, it’s important to remember that loyalty partnerships don’t have to start off as permanent program benefits; you can test and learn your way into partnership effectiveness via LTOs, tiered benefits, regional availability, etc.”
Building Twice the Loyalty with Partnerships
Brands can offer customers a multitude of benefits through strategic partnerships, some of which can increase brand loyalty noticeably for both parties involved.
“Partnerships often elevate customer passion points or help solve customer pain points,” says Farsht.
Before embarking on a partnership strategy, she recommends brands ask themselves what they truly need from potential partners in order to improve customer value or experience. What gaps will the partner fill, and how will they help deliver an exceptional customer experience?
Labanca agrees, saying, “At the most basic level, the partnership fills some void or need that the customer actually has and/or that the partnership makes the things that each brand offers more efficient or accessible for the customer.”
Farsht adds, “Taking the time to confirm partner goals, categories, brands, and constructs will yield a targeted list of potential partners, and often generates ideas to bring to the table. Another important part of the process is identifying what you will offer those brands in return. Sizeable reach? Impressive customer segmentation? Brand halo effect? Know your value and how to articulate your brand story in a compelling way that partners simply cannot refuse.”
Boisvert recommends in order to find success in creating member value through partnerships, brands must start with their core products and services - their reason for being - and find those partners that enable, enhance, and/or complement them.
He explains, “The higher the correlation between what the brand delivers and what the partner provides, the greater the value perceived by members. For example, by offering a first/last mile transportation solution, the partnership between Delta and Lyft is both highly corollary and relevant in the minds of members.”
Finding the Right Balance in Partnerships
While partnerships are formed for reciprocal advantage to both parties, it can be difficult in the business world for brands to ensure partnerships are mutually beneficial for both (all) brands involved. Many partnerships tend to be one-sided. How brands work to achieve the right balance makes all the difference.
“As in any relationship, transparency is key,” Boisvert stresses, adding, “Ensuring that each party is aware of the other’s objectives for the partnership is critical.”
He states that the most successful loyalty partnerships are rooted in shared goals, so establishing a business arrangement that incentivizes each party respectively is recommended. Partnerships that are not mutually aligned - or favor one party over another - can appear disingenuous in the market and are often short-lived.
“A good partnership brings the best of both brands together to create something of mutual value,” says Farsht. “Unfortunately, the average pitch deck is very one-sided, often focusing on specific advertising placements and sizable fees. That’s not a partnership, it’s a sponsorship.”
Farsht recommends instead, brands should consider reversing the scenario and imagining the partnership concept as if it is being pitched to you and your brand. “Is it personalized?” she asks. “Does it show the team has invested time, resources, and truly envisioned the potential opportunities between the two brands? Does it leave room for discussion, possibilities, and the opportunity to create something together? Partnerships should be a win for all involved.”
What Defines a Successful Partnership?
While we all agree that brand-to-brand partnerships should be mutually beneficial, it is difficult to find tangible ways to measure the success of the partnership. Success isn’t something that can be easily defined within one brand alone, so how should brands define and measure success when it comes to partnerships with other brands?
“That’s a tricky one,” agrees Labanca, stating, “as success (or what’s beneficial to the brand) likely means something different to each brand. Even if the partnership is ‘successful,’ those markers likely change over time. The key here is communication, early and often, ensuring that both brands are on the same page as to what success means for each, at each stage, and how each side is going to contribute to making that success happen is vital.”
Farsht agreed, saying, “Defining how to measure success will be unique in each partnership scenario. Starting the conversation with one simple question, ‘What does success look like?’ can help shape the foundation for the partnership, as well as identify meaningful measurement tools. Does success equal an increase in loyalty program reach, sign-ups, or active users? Should it be focused on campaign engagement metrics? Or is your goal to create emotional connections and improve the overall customer experience? The answers to these questions can help narrow your approach, sharpen the focus, and set expectations for your partner measurement plan.”
Boisvert says, “It ultimately goes back to the objectives of the partnership itself. The more tangible, transactional KPIs of a program - acquisition, retention, frequency, spend, etc. - are all relevant loyalty metrics that partnerships can help drive. Don’t overlook the intangibles, though, and the need to foster and measure emotional loyalty, too. While these results are not as immediate, they are certainly more lasting.”