Leveraging a relationship with another local business or community has many benefits, from creating new revenue channels to finding new engaged audiences. Small-scale relationships can grow viewership and improve brand reputation. Partnerships can create a movement to build off of for years to come. There are 2 major ways to reach new channels of engagement through relationships: affiliate marketing and co-branding.
What kind of relationship will most benefit your company? You could create an easy program where anyone (company or single person) has the opportunity to benefit from the relationship. Or, you could put all your effort into one strong and lasting relationship that stands the test of time. There are pros to each strategy, and they are not mutually exclusive – you can use both! But, one relationship marketing tactic may be better suited for your business needs than the other.
Co-Branding is a collaboration between two or more businesses to create a mutually beneficial marketing campaign that helps all involved meet their business objectives. This can include offering joint packages, sending referrals to each other’s companies, offering discounts on each other’s behalf, or creating joint promotions.
Affiliate marketing can be undergone with third-party platforms, an individual like an influencer, or other businesses. This marketing strategy involves offering a commission for every product/service/subscription purchased through the affiliate marketing channel. For example, an online retailer will pay a commission to an external website for traffic or sales generated from its referrals.
Co-Branding involves creating a living, breathing relationship that has to be nurtured and may change and develop over time. Affiliate marketing is about creating a new channel of revenue – once the channel is established, the best-case scenario is to generate revenue with little to no oversight. Co-branding focuses on the depth of relationship, while affiliate programs focus on widespread involvement.
RedBull and GoPro have an ongoing partnership co-sponsoring events and athletes.
Co-branding is about creating a symbiotic relationship between two companies that have similar values and missions. These similarities don’t necessarily mean similar products; some of the strongest co-branding campaigns created were birthed from partnerships that taken at face value don’t make much sense. I mean… video cameras and energy drinks? We’ll talk about them in a moment.
The only opportunities unavailable to you are the ones you can’t come up with. It is what you make of it – there are endless ways to leverage a partnership for dual growth. Companies have created new joint products, co-sponsored or co-planned events, and set up joint campaigns. Co-branding opportunities can lead to increased PR, new content and positioning your company with another respected brand.
There are more macro-level brand growth opportunities with co-branding because you are reaching a new audience. These in-depth partnerships are a great way to organically update your brand voice. Partnerships can make your brand look more hip, green, quality, trendy, classic, modern… it all depends on the chosen counterpart. For example, H&M and Alexander Wang ran a joint campaign promoting both product brands on one model. For H&M, this increased the appearance of quality and trendiness of their styles. Alexander Wang, an expensive high-end brand, got to communicate with a younger audience that aspires to have designer clothes in the future.
These lifestyle giants both market an adventurous, active lifestyle, but are not competitors. Shared values without fighting over market share is the perfect formula for a great partnership. They used these aligned values to their advantage by creating sporting events that GoPro equips the athletes and events with their product for content and streaming, and RedBull uses their reputation and audience reach to advertise and market the events. They share athlete ambassadors and influencers and have even sent an athlete into space – they broke 3 world records for this joint publicity stunt.
These kinds of partnerships aren’t created every day. So, if you are trying to get the most out of a co-branding strategy, it will take time and thought. But with the right energy expenditure on both partner’s parts, the rewards could be huge.
Apple Music has a program that is open to all members.
If co-branding is marriage, affiliate marketing is a series of casual encounters. Affiliate programs have much more flexibility on commitment levels needed to make it a worthwhile marketing effort and opens the gate for anyone or business to be involved if they so desire. Because of this flexible low-commitment strategy,
It is a fairly low-risk-high-reward practice: you start spending money only when you start making money. This is because the program is commission based and people only make money once they confirm a referral. This pool of people you can benefit from is larger because affiliate programs can be open to the public instead of having a cap on the number of partners you can handle.
Affiliate marketing is a low maintenance effort. It doesn’t take much continuous management and after the initial setup and establishment process, it can easily be automated to take minimum oversight time and become a fully autonomous channel for revenue generation. It is easier to manage multiple affiliate marketing channels than it is to manage multiple partnerships (especially with a small team).
Many major companies from Amazon to eBay to Fiverr have long-standing affiliate partnerships that are open to all members. By referring a friend, they get money, discounts, or credits on products. You don’t need to open your program to everyone if you don’t want to; another option is to partner with companies and create a commission plan based on referrals.
For example: if you are a tour operator, you could create an affiliate partnership with local hotels to reach traveling families, and offer a commission to concierges who recommend your tour. This connects you with a new potential customer who may not be aware of your services, as well as leverages customer trust in recommendations from local tourism experts.
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