Partner marketing — also called partnership marketing or co-marketing — is a collaboration with a person or business that influences the sector you’re interested in selling to. By creating new partnerships, you can introduce your brand to a new or broader audience. But how does partner marketing work, and how can you measure the success of your campaigns? I’ll break it down below.
What Businesses Need Partner Marketing?
Many small and medium-sized businesses (SMBs) engage in partner marketing by collaborating with affiliates, content creators, social media influencers, and complementary retailers or service providers to expand their reach.
A local boutique hotel, for example, might partner with a nearby tour company or travel blogger to promote seasonal vacation packages. A neighborhood coffee shop could collaborate with a local bakery to cross-promote each other’s products. This could include bundled deals or social media campaigns.
Similarly, a small financial advisory firm or fintech startup might promote its services to a targeted audience by forming an affiliate relationship with a personal finance blogger or local business influencer.
Types of Partner Marketing
Affiliate Marketing
With affiliate marketing, businesses partner with individuals or companies (affiliates) who promote their products and services to their respective audiences in exchange for a commission when they generate a lead or sale. Amazon, one of the world’s largest companies, runs what might be the best-known affiliate marketing program, Amazon Associates. You can explore more affiliate programs such as high ticket and financial services.
Co-Branding
Co-branding occurs when brands come together to develop a product or service. It enables both companies to leverage their strengths and share customers. One of the best examples is co-branded credit cards tied to a specific hotel or airline, such as the Marriott Bonvoy Boundless Visa, or Alaska Airlines Visa Signature card.
On a smaller scale, a local fitness studio might partner with a sports nutrition retailer to create a co-branded workout package that combines fitness classes and nutritional supplements.
Sponsorships
Anytime a business sponsors an event, an individual, or a piece of content, it’s a form of partnership marketing designed to boost a brand’s exposure. For example, a local craft brewery might sponsor a community cycling event or marathon, placing its logo on race-day banners or T-shirts. Similarly, a small business webinar series could partner with a digital marketing agency or an accounting or invoicing app as an event sponsor.
Loyalty Partnerships
Some companies that offer customer loyalty programs will partner with similar companies to provide shared perks. This is common with airlines and credit cards — if you belong to American Express’ Membership Rewards program, for example, you can transfer your points to and from various partner programs, such as Aeroplan (Air Canada), Delta SkyMiles, Hilton Honors, and Marriott Bonvoy.
But loyalty partnerships can also work well for SMBs. For example, a local pet supply retailer could team up with a dog grooming business to offer a joint loyalty rewards program. When someone spends money at one business, they earn discounts at the other.
4 Ways Partnership Benefits SMB Growth
1. Improving Brand Credibility
It can take a lot of time for a new business to build customer trust. By partnering with a well-known, trusted brand, you can increase the credibility of your brand more quickly.
2. Gaining Access to New Audiences
Again, growing your customer base organically takes a lot of time and effort. Small businesses can access each other’s customers by partnering, leading to increased business opportunities. For example, a local bookstore could partner with a coffee shop in its community to offer joint promotions or host events. This would allow them to promote their products and services to the coffee shop’s customers and vice versa.
3. Reducing Expenses by Sharing Resources
Complex marketing campaigns can be very expensive for any business, regardless of size. By joining forces with promotional efforts, such as event hosting, paid ads, or social media content creation, small businesses can maximize their marketing budgets.
4. Product and Service Diversification
SMBs can improve their value proposition by partnering with other companies to offer additional products or services. Similar to the earlier pet store/dog groomer example, a small bakery could partner with a local florist to offer a combined gift package for holidays or special occasions. Customers who purchase a custom cake will also receive a discount on a bouquet of flowers.
5. Great Potential for ROI
Co-marketing can offer significant ROI potential for small businesses, delivering high-impact results at a low effort/cost. The key is to collaborate with a complementary partner. For example, a home cleaning service could team up with a local estate agent by offering discounts to clients who purchase a house through the agent. In return, the housecleaning company could recommend the real estate agent to its clients. This partnership allows both businesses to reach new customers for a minimal cost. They can also leverage each other’s credibility to build trust.
Potential Drawbacks of Partner Marketing to Consider
Risk of Dependency
Successful partnerships can unlock additional revenue streams, but businesses must be careful not to become too reliant on their partner for leads. Doing so could place them at risk if the partnership were to end.
Misaligned Goals
One of the keys to a successful partnership is working with businesses with similar goals, but aligning your brands’ messaging and values is easier said than done. Misalignment can lead to ineffective marketing campaigns and subpar business results.
Conflict Risk
Conflict can arise if there is a breakdown in communication, or the partners involved disagree on the marketing campaign’s strategic direction. A worst-case scenario could lead to a partnership breakdown and reputational damage to one or more brands.
Loss of Control
Partnership marketing can expand your brand’s reach, but you must be willing to give up some control in exchange. It’s very important to establish clear guidelines at the outset, as a loss of autonomy could lead to conflict.
Uneven Contributions
Marketing campaigns can be highly complex, and situations could arise where one partner contributes more time, effort, or money. This could lead to a perceived imbalance of value, again leading to conflict.
How to Find a Co-Marketer
Identify Companies With a Similar Audience
Start your search by looking for companies that target a similar audience, but with products that don’t compete with your own. For example, if you own a gym or fitness studio, you might want to partner with a retailer that sells nutritional supplements or fitness equipment, such as yoga mats, jump ropes, or resistance bands.
Leverage Your Network
Once you’ve decided on the type of company you’d like to partner with, leverage your professional network to establish connections. This can include existing contacts or professional organizations you belong to. You can also attend networking events or conferences.
Present a Clear Value Proposition
You must show prospective partners how they can benefit from collaborating with you on a marketing campaign. For this, you’ll need to present a clear value proposition. Prepare a well-thought-out pitch and share it on your website or social media.
As a small business owner, your best bet might even be to reach out to prospective partners by telephone. Even in our online age, nothing beats making a personal connection. Regardless of your approach, your value proposition can include an invitation that potential partners can respond to and testimonials or case studies to support your case.
How Can Businesses Effectively Manage Their Partnership Programs?
Track Revenue Earned
Many businesses will use affiliate tools — such as promo codes and link trackers — to not only track sales, but also compare partner and regular campaign results. However, if you’re collaborating with another small business to run a small campaign, you may be able to rely on manual tracking to gauge success.
Analyze Website Traffic
If you’re running an online campaign, you can use website traffic tools such as Google Analytics or Google Search Console to measure the amount of traffic coming to your website. These will also show you the time spent on site, bounce rates, and the number of pages per session.
Assess Conversions
A conversion rate measures the percentage of your audience that completes a desired action, such as downloading an ebook, signing up for a free webinar, purchasing a product, etc. You can assess your conversion rates from partner campaigns to see how they compare to regular campaigns.
Measure Brand Awareness
The success of partner marketing campaigns can be measured in more ways than revenue and profit. If your goal is to raise brand awareness, you can do that by tracking increases in social media follows, mentions, likes, and shares.
How to Measure the Impact of Your Marketing Partnership
Ultimately, the success of your marketing partnership will be based on results — more specifically, how your results compare to the goals you established with your partner at the beginning of the campaign. The key performance indicators (KPIs) used to measure success will vary, but can include social engagement, conversion rates, or revenue.
Social Engagement
A small business can track likes, shares, comments, and mentions on social media posts when running a co-marketing campaign. For example, if a local coffee shop decides to cross-promote with a local bakery on Facebook or Instagram, increased engagement on either business’ social media accounts can indicate that the campaign effectively expanded reach.
Conversions
Conversions measure the percentage of prospects who take a desired action, like buying a product, subscribing to a newsletter, or signing up for an event. Businesses can track conversions for online co-marketing campaigns by creating a unique referral link for the campaign. Partners can determine the campaign’s effectiveness by measuring how many customers use the link to take advantage of the offer.
Revenue
Conversions measure actions taken by a prospective customer, but revenue reflects the actual income you generate from those conversions. In other words, not every conversion leads to a sale. For example, if you own a local gym and someone signs up for your newsletter, that counts as a conversion, but they haven’t purchased anything yet. To measure revenue, you could include a special link in your newsletter offering discounts for new memberships, turning those conversions into sales.
Alternatives to Partner Marketing
Channel Marketing vs. Partner Marketing
Channel marketing is an arrangement where companies rely on partners to sell their products and services to the end user. For example, a manufacturer could partner with a retail chain to stock and sell its products. This differs from partner marketing, where partners typically market their products to the end user.
Affiliate Marketing vs. Partner Marketing
Affiliate marketing is a form of partner marketing where an affiliate promotes a partner’s products and services in exchange for a commission. Brands benefit by gaining access to the affiliates’ customer bases and expanding reach.
Key Takeaways
Partner marketing is used in many industries, such as travel and hospitality, health and wellness, and financial services. Co-marketing strategies can take many forms, including affiliates, co-branding, sponsorships, and loyalty partnerships. Regardless of the approach you take, it’s critical that you partner with similar businesses that share common goals.
You can measure success in various ways, depending on your objectives. For example, if your primary goal is to build brand awareness, you’ll want to pay close attention to social media engagement. If the goal is to generate sales, you’ll want to keep a close eye on conversions and revenue growth. Finally, when entering a partnership, keep an eye open for risks, such as dependency, misaligned goals, reduced control, and potential conflicts.
Frequently Asked Questions (FAQs)
How do you find a marketing partner?
To find a marketing partner, start by figuring out the goals for your business. Look for complementary companies with similar products and customer bases that might overlap. Remember that any potential partners must also share your values.
What does a partner marketing specialist do?
While specific responsibilities may vary, partner marketing specialists are typically responsible for building and maintaining relationships with new and existing partners. They collaborate with partners to develop joint marketing campaigns and are often responsible for generating leads and revenue growth.
What Is B2B Partner Marketing?
Partnership marketing can exist between a business and an individual. Business-to-business (B2B) partner marketing refers to a collaboration between two or more companies with the goal of co-marketing their products and services.
