Creating complementary partnerships, also known as co-branding, can be a powerful way for businesses to improve brand affinity, extend their customer reach and provide better services. Indeed, collaboration can be as effective as competitiveness when it comes to driving business.
In the tech industry, companies can form alliances with other organisations to develop software and tools that cater to similar audiences and could integrate with one another.
Rather than treating each other as competitors, businesses in any industry can create complementary partnerships to build a new product or service together or cross-promote their existing products or services.
And a partnership need not be for life – short-terms partnerships to test the waters might include:
Co-sponsored events, webinars, and marketing campaigns
Joint negotiations with various vendors for cost-saving
Shared advertising and media buys
For companies that want to offer their customers comprehensive experiences, it’s worth exploring potential collaborations with other businesses that share similar audiences and values.
A structured agreement put together by well organised teams with clear deliverables is the foundation of a successful partnership. As with any new business venture, due diligence is essential and clearly defined goals will ensure prospective partners are on the same page. A thoroughly planned and organised collaboration can facilitate brand recognition, customer loyalty and sales for both parties.
Three important benefits of complementary partnerships are:
Additional expertise. Whether you work with another company in your own industry or one from an entirely different discipline, you can leverage their trained personnel and expertise. This aspect of a complementary partnership is especially advantageous because it saves costs for both companies. It allows you to offer customers products and services otherwise unavailable.
New customer reach. If you each promote your partner’s business to your respective customer bases, both businesses will reach an audience they otherwise may not have access to. To further expand reach, you may create joint advertising and marketing campaigns.
Increased efficiencies. When executed properly, complementary partnerships can make it easier for participating brands to produce products and services faster with better quality control standards, at a more cost-effective price. Collaborations like these allow you to use all available staff experts and vendors to minimise the amount of research and development required and negotiate better deals throughout the supply chain.
Furthermore, a successful co-branding partnership can benefit from:
Reduced costs leading to higher margins
A boost for both brands
Better financing options
Improved sales and customer relations
Your business is unique, but there are partners out there for any business – the key is finding one that works with the same demographic as yours, but provides different value. Of course, alignment in purpose and values is also desirable.
For instance, an entrepreneur who offers classes and consulting to help small business leaders with financial matters might partner with another expert who helps that same audience build business growth strategies.
Each could leverage the other’s platforms and networks, offering classes together, sharing referrals, publishing together and co-hosting events.
Here are a few broad guidelines that will help any business create valuable partnerships:
Create a detailed partnership agreement. Setting the legal parameters for the partnership – including what happens at the end of it – helps both parties define their investments of time, resources and money. This helps to crystalise each company's responsibilities and aids in the planning, launching and running of the endeavour from start to finish.
Consider each entity's market reach. Both companies should understand the reach and limitations their partner offers. That makes it easier for participating brands to set and manage expectations. In rare instances, collaborative projects go viral; however, that shouldn’t be the expectation. In most cases, organisations will see modest, steady growth from a well-executed complementary partnership.
Compare company culture and mission statements. Avoid friction among staff and consumers. For example, a company that prides itself on eco-friendly solutions may not want to align itself with an organisation that profits from fossil fuels. On the other hand, when your brand values align, your team members will be more excited about working with the other brand, you will be more likely to produce something that’s congruent with organisational beliefs, and customers will be more receptive to the joint marketing effort.
Research each party’s unique market positioning. At your organisation, your market positioning plays an integral role in customer engagement and communications. Likewise, your potential partner is perceived by your audience in a specific manner. To make sure your co-branding efforts are successful, conduct market research to determine how to best position the new partnership in a way that elevates the status of both brands.
A brand partnership agreement should include:
Length of the term of the partnership
A timeline of promotions and events
Licensing provisions for brands, logos, copyrights and trademarks
Market data sharing agreements
Liability of each partner
Capital contribution of each partner
Delegation of tasks
Nondisclosure and confidentiality agreements
Complementary partnerships offer a way to reach new leads and continue to innovate for loyal customers. The best of these co-branding efforts results in long-term collaborations that allow both organisations to expand across markets, better engage existing audiences, and increase profitability.
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