Businesses often partner with other brands — ones that are either within their industry or that target the same consumer segments — to collaborate on various projects that can enable both to improve brand affinity, extend their reach, and produce better services. Also known as co-branding, there are a number of reasons companies choose to engage in complementary partnerships.
Within the tech industry, for instance, companies can form alliances with other organizations 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 this situation can create complementary partnerships to either:
- Build a new, joint product or service together
- Cross-promote their products or services
When a business pools its resources with complementary companies, everyone reaps the rewards. Additional ways in which these sorts of partnerships can manifest include:
- Co-sponsored events, webinars, and email blasts
- Joint negotiations with various vendors for costs-savings
- Shared advertising and media buys
For companies that want to offer their customers a more comprehensive experience, it’s worth exploring potential collaborations with other businesses that share similar audiences and values.
The Benefits of Cobranding, or Complementary Partnerships
- Shared resources
- Reduced costs and hence higher margins
- Branding boost especially if both the brands are renowned
- Shared risk – All the risk is not bourne by one brand
- Better sales and better customer relations
- Financing becomes easier as two brands are intertwined.
- Additional expertise
- New customer reach
The benefits of a complementary partnership
To ensure the success of every new complementary partnership, it’s important the agreement is structured, the deliverables are clear, and both teams are well-organized. Like all aspects of your business, prior to working out a partnership, each entity should do their due diligence on the prospective partner’s offerings and define what goals they aim to meet through the collaboration. When you properly plan and organize, a partnership with another expert or corporation can facilitate even more brand recognition, customer loyalty, and sales for both parties.
Three important benefits of complementary partnerships include:
- 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 further allows you to offer customers advanced products and services otherwise unavailable when your organization functions independently.
- New customer reach. All participating companies have their own independent customer base and marketing channels. Through a complementary partnership, you each can push messaging that promotes your partner’s business to your respective audiences. As a result, both organizations should experience increased brand recognition and an uptick in sales. To further expand reach, you may take this opportunity to create joint advertising and marketing campaigns to promote the new partnership. In turn, you’ll collectively reach larger audiences and convert new customers.
- 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 more cost-effective prices. Collaborations like these allow you to utilize all available staff experts and vendors to minimize the amount of research and development required and negotiate better deals throughout the supply chain.
How to leverage complementary partnerships for your business
Your business is a unique organization. Often owners see other companies using strategies such as complementary partnerships and don’t immediately see how that model would work in their space.
For instance, an entrepreneur who offers classes and consulting as a service might not recognize how a partnership could benefit them. However, it’s almost a certainty that there are other professionals in either the same or adjacent industries who can complement your existing services.
In consulting fields, many experts use a strategy to leverage the platforms of other thought leaders in their specific field and vertical. You can build similar complementary partnerships with these category experts by offering classes through their platforms, and vice versa. Other options include joint publishing ventures and co-hosting courses.
4 Tips for Creating a Strong Cobranding Partnership
- Create a detailed partnership agreement.
- Consider each entity’s market reach.
- Compare company culture and mission statements.
- Research each party’s unique market positioning.
Sometimes complementary partnerships can form organically, initiated through conversations with other business owners at conferences or events, or even on social media. It’s important that your team is open to the idea of collaboration and cross-promotion, which can then lead to serendipitous opportunities to add products and services to your sales arsenal that you wouldn’t be able to offer without another organization involved.
The success of a partnership, of course, hinges on both parties committing a mutually agreed-upon amount of effort and resources with the goal of both organizations benefiting from their relative investments.
How to identify and execute successful co-branding campaigns
There are many benefits to a well-organized complementary partnership. Of course, partnering with the right business ensures you can comfortably maintain a consistent brand message, effectively engage your target audience, and maximize your return on investment.
Due diligence is the key to determining whether a complementary partnership is right for your business and your potential partner. In some cases, a joint effort with another organization can accelerate the growth rates for both businesses and enable you to tap into new markets. That said, these goals are only achievable when you team up with a company that holistically aligns with yours in a number of different ways, and the initiative is well-planned and well-documented prior to launch.
- Since each company brings their own unique brand, culture, and resources to the table, it can be challenging to create a list that itemizes the steps for a successful co-branding partnership. Each collaborative opportunity needs to be assessed and launched in an individual manner.
A Few Ideas of What to Include in a Brand Partnership Agreement
- Goals
- Term length
- A timeline, including any co-marketing promotions
- Termination clauses
- Licensing provisions for:
- Brands
- Logos
- Copyrights
- Trademarks
- Exclusivity clauses
- Market data sharing agreements
- The liability of each partner
- The amount of money or capital each partner contributes
- Responsibilities in completing tasks
- Nondisclosure and confidentiality agreements
That said, there are four key tips that make it easier to facilitate a strong and complementary partnership.
- Create a detailed partnership agreement. Setting the legal parameters for the co-branding effort helps both parties define their individual investments of time, resources, and money. This helps to crystalize 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 relative expectations. In rare instances, collaborative projects go viral; however, that shouldn’t be the expectation. In most cases, organizations will see modest, yet steady growth from a well-executed complementary partnership.
- Compare company culture and mission statements. Complementary partnerships between completely different types of companies can yield successful results. However, your companies’ cultures and mission statements shouldn’t be at odds; this can cause friction among staff and consumers. For example, a company that prides itself on eco-friendly green solutions may not want to ally with an organization that primarily profits from fossil fuels and non-renewable energies. 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 organizational beliefs, and customers will be more receptive to the joint marketing effort.
- Research each party’s unique market positioning. At your organization, 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, too. 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 ultimately elevates the status of both brands.
For companies, 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 organizations to expand across markets, better engage existing audiences, and increase profitability.
Share “The Business Benefits of Complementary Partnerships” On Your Site
