Welcome to part two of our complete guide to partnership marketing.

Part one covered the first five types of partnerships - affiliation, content partnerships, distribution partnerships, charitable partnerships and joint products.

In this article, we'll be looking at numbers six through 10, including:

  • Licensing
  • Loyalty
  • Product placement
  • Shared stores
  • Sponsorship

So, on with our list of the 10 types of partnership marketing...

6. Licensing

“Licensing is a business arrangement in which one company gives another company permission to manufacture its product using its brand image for an agreed payment or partnership.”

There are two ways that a brand will choose to collaborate with another when it comes to licensing partnership marketing: 

  1. Sold - most brands that decide to license their brand choose to sell it to their partners for a given price. This provides them access to various assets (described below) to improve their product or service offering. 
  2. Collaborative - some brands decide to get involved in the licensing partnership and actively collaborate with the partner. This has close associations with joint product partnerships where a company may utilise another's product and brand image to provide an exclusive unique offering.

There are many ways a company who licenses another's brand can utilise it. After purchasing the right to use their brand they can work on the following:

  • Logo - the logo of another brand can be used within a company's own product line to enhance it. 
  • Brand image - the brand image itself can comprise not only the logo but the colours, font and tone of voice. 
  • Reputation - with the purchase of any brand comes with it its reputation; utilising this to a company's advantage in their new product offering. 
  • Culture - with a brand's reputation also comes its company culture. A company can utilise the ethics and company values this also brings. 
  • Design - the design assets that come with a brand can also be utilised within the firm’s products or services.

The creation of a brand, one with a stand-out reputation, is extremely time consuming and costly. So for many organisations the quickest and simplest way is to purchase it. This is what licensing offers a company; tying in a global brand to the product hugely enhances it.

A product can go from mediocre to a sales success very swiftly if the right brand is licensed and leveraged accordingly. Simply using the brands name for the product and attaching the logo to it, even if the product hasn’t changed at all from previous editions, can lead to a huge surge in sales. This is a type of Partnership that some may say is a sales technique rather than marketing, but it involves the use of branding which can affect the entire marketing proposition and how it is positioned. 

7. Loyalty

"A retention marketing technique that offers consumers a reward in return for increased usage. A loyalty partnership enhances the typical model by offering consumers partner offers to encourage longevity and purchase frequency. "

Loyalty partnership marketing comes in three specific types. All of which relate to how consumers are loyal to a brand: 

  1. Frequency - loyalty can be rewarded based on frequency of customer use; the more a product is bought or a service used the more rewards a consumer receives. A reward can be a partner brand discount; smart brands take this a step further by personalising, providing an offer in conjunction with a partner brand tailored to the consumer based on their spending patterns or personal profile.
  2. Volume - the alternative is to reward based on amount purchased; where the higher the number bought the larger the reward. Savvy brands provide varying degrees of reward to those that purchase larger amounts, often fully personalising the offer.
  3. Advocate - the third type is often described as advocacy; where a consumer is so loyal to a brand they will support it and promote it, with this a brand will offer extended rewards. It is a type of loyalty that focuses purely on rewarding those who shout about a brand and even have the power to influence others.

A brand can encourage consumer loyalty in a number of ways. The following examples can be adjusted depending on consumer base segments:

  • Loyalty club/scheme 
  • Loyalty cards/vouchers 
  • One-off rewards 
  • Free money, gifts, raffles 
  • Seasonal promotions 
  • Product extensions

All of these offer the possibility for partner brand involvement, mainly by including their discounts or exclusive products within the loyalty program. As a technique it allows two brands to successfully align their proposition with each other utilising their similar databases to improve customer retention rates.

This is a type of partnership marketing that has been tried and tested by a number of high profile brand names, which highlights it as one of the most effective types. A loyal collaboration can enhance the image of a brand, acquire a vast number of new customers who already contain the proven characteristics of being loyal, and increases the spend frequency and volume growth.

8. Product placement 

"The subtle placement of a brand within a media channel. It is deemed a cross-over of sponsorship and advertising that works well in partnership with high grossing TV and Film productions." 

Product placement partnership marketing comes in three key types. These reflect the main ways in which products are placed within the media, a decision made through the coalition of brand and media channel: 

  1. Subtle placement - where the inclusion of the brand logo, a background shot of the product, or an elusive hint towards a products usage, is found within TV and film scenes. 
  2. Direct advertising - aside from subtle placement there is a more direct approach. More obvious placement advertising within a media programme, such as a cookery show endorsing a product, is deemed direct.
  3. Public person sponsorship - there can be a fine line between product placement and sponsorship. Away from TV and film there is also the placement through the use of celebrity endorsements who are encouraged to wear the clothing or use a product. When a brand sends a celebrity free items they are seeking product placement, often through paparazzi photos, social media and usage in their daily lives.

Once a brand has established a relationship with an agency acting on their behalf or in collaboration directly with a TV studio or film production company, placement can take the following forms: 

  • Logo within frame or scene
  • Direct mention or usage
  • Inclusion in plot
  • Background placement
  • Visible foreground placement
  • Celebrity endorsement

Even though it is currently one of the least used types of partnership marketing let's not take away its extremely innovative attributes. Although often subtle there are a number of smart ways in which to achieve exposure.

When it comes to such niche forms of marketing as this there are always brands that perfect it better than others, larger brands in particular find they can leverage its qualities more so than smaller ones. Often the reason comes down to the network, celebrity or media in question, they only wish to work with such brands that will resonate with the audience; the Apple's, Facebook's and Pepsi's of this world.

Although, saying this, smaller brands running product placement via celebrity endorsements often notice soars in sales and overnight recognition; a fashion brand that places their products in the hands of a well-known public figure is likely to see their popularity surge. 

9. Shared stores

“Where a partner provides an area of agreed space within their own store for the other partner’s brand. The primary brand has rented out, provided or extended their retail outlet to integrate the secondary brand, for additional value to their consumers.”

Shared-store partnerships are a growing phenomenon with some of the biggest names teaming up, but this isn’t just reserved for retail outlets, it too can be found online:

  1. Offline - the most common type of shared-store partnership. Offline we refer to the physical world where petrol stations, retail outlets, supermarkets and coffee shops have all been found to merge stores. 
  2. Online - a relatively new concept but one that is increasing in popularity. Online it is where both brands look to be associated alongside another by combining areas of their websites together through iFraming or creating dedicated sections.

Shared-Store partnerships offline and online can be further broken down into various forms:

Offline

  • Store within a store - the classic form of a shared-store partnership is to provide a section of the primary brand’s retail space for another brand – as shown in the example below with Cineworld and Starbucks. This adds value to the consumer base by offering an additional proposition to their shopping experience.

cineworld starbucks 

  • Permanent desk - this is where a primary brand provides a permanent desk for a partner brand. Department stores such as Selfridges or John Lewis often provide areas such this in their cosmetics section. 
  • Promotional stand - occasionally a store will offer some of their space as a promotional stand. This provides a partner brand with an exclusive area dedicated to their product often manned by the brand’s own personnel. 

Online:

  • Dedicated tab or page - providing a specific tab or page for a partner brand within the primary brand's website. This provides a dedicated area for added-value. 
  • Members area - a members area provides exclusive material or content, this is therefore a popular area for partner brands to be featured.
  • iFraming - displaying a partners webpage within your own website. iFraming acts as a window that shows a relevant section of their site. 

What’s hugely beneficial about this strategy, particularly offline, is that it places the partner brand physically in front of consumers entering a store. It's the ideal way to interact, touch and test a partner brand product. By being alongside one another this creates a powerful perception and by sharing retail space it minimises overall costs, attracts new consumers, and retains existing ones for longer. 

Saying this, it is not without its risks; for a primary brand it will have to sacrifice a portion of its store for another that they may find doesn’t resonate as strongly as they hoped. This may have negative connotations and in instances actually deter customers.

10. Sponsorship  

“The marketing tactic of placing a brand alongside a particular event, displaying itself as a partner or supporter, with the objective to increase brand recognition and reputation.”

Sponsorship has been around since the dawn of marketing and one of the most successful ways to create a brand identity. There are various objectives to sponsorship and these lie under three key banners: 

  1. Awareness - aligning a product alongside an event for mass exposure is the most common type of Sponsorship. The aim is to have the largest possible reach of your brand to both existing and new consumers. 
  2. Association - linking the product with a cause, person, or event to provide a brand association in the eyes of the consumer. Every time you think of that event you will tie that in with the sponsored brand too. 
  3. Consumer understanding - sponsorship can link a brand proposition with an event so that it provides product education to the consumer. Some propositions are more complex than others so sponsorship is seen as an effective way to teach a consumer what the product can offer.

Sponsorship comes in many shapes and sizes. Below are several varieties that are commonly found across many of the world's popular partnerships:

  • Sporting sponsorships - some of the most expensive yet effective forms of brand exposure. They can be found within every popular sport from team sponsorships, stadium names, board advertisements, and player endorsements.  
  • Media sponsorship - any sponsorship found within TV, film and radio are all forms of media sponsorships; the sponsoring of a new television series is a great example. It is an effective tactic for mass brand awareness. 
  • Event sponsorship - the World Cup, Olympics, and charity events such as the London Marathon, are all examples of this. The Olympics was in such high demand for London 2012 that there were sponsors for nearly every possible association: drinks, supermarkets, and even an official furniture sponsor. 
  • Local sponsorship - a niche but highly effective form where local businesses look for exposure towards a specific market. Local farmers market, charity events and political conventions, all provide a brand the opportunity for exposure. 
  • Seal of approval - with foods, health products and luxury items such as holidays a seal of approval is a powerful tool. When a hotel or restaurant has the TripAdvisor certificate displayed it provides that seal of approval we know and trust. 

For decades global brands such as Coca Cola, McDonald's, Pepsi, O2, Nokia, Red Bull and British Airways all pour billions of marketing spend into sponsorships, and the reasons are plentiful. They increases brand reach, increase brand awareness, improves brand trust, change a brand's value proposition or image, improve product understanding and open up new global or local markets.

The benefits are a clear justification for companies acting on sponsorship marketing, but for some marketers they like to stay clear due to several distinct drawbacks: 

Difficult to track performance - other than the media value earned, noticing the increase in overall sales from a sponsorship campaign can be difficult. There is very little to tag a campaign and go by as often it is simply just a branded logo that’s displayed. The fact is the performance will never be as accurate tracked as some forms of digital marketing.

Difficult to quantify - can the costs be quantified accurately in comparison to the media value earned? Numbers can become vague in sponsorship; many feel the true value of new acquisition cannot confidently be associated with the sponsorship.

How to trigger sales and conversion? - At the end of the day brands must focus on conversion, but sponsorship offers no clear call to action. Brand recognition that isn’t purely quantifiable is the main advantage rather than direct sales.

Despite this, sponsorship has been tried and tested by the most well know global brands out there, therefore it is, aside from the caveats, trusted and relied upon, making it a vital partnership marketing technique.

Consistent terminology

Alongside the 10 types of partnership marketing it’s important to also understand the terminology that goes alongside them. The subject currently suffers from a distinct lack of consistency when it comes to the terminology used. Upon billboards, online ads, and loyalty schemes, many of the terms detailed below have been used to illustrate a partnership between two brands. They are recognisable terms although ones that are not always entirely accurate.

Here are a few definitions: 

  • In partnership with - the most popular phrase used to describe a partnership with another brand, literally says what it means; informing consumers that there is a collaboration occurring and that the partnership will benefit both primary and secondary brands as well as ultimately the consumer.
  • Supported by - commonly found within charitable partnerships. Being supported by a partner brand refers to one brand assisting the other in the campaign. It portrays an element of comfort towards a consumer, showing the cause is backed by a reputable brand.
  • Certified by - provides authenticity to the partnership. By stating that a brand certifies another delivers trust to the consumer that the offering is backed by the supporting brand.
  • Incorporating - generally means 'together with' and relates to a primary brand including a secondary brands proposition within their own. If a major brand is incorporating with another it is referencing the fact that they are providing their services as an add-on or an extra. 
  • Powered by - often refers to the presence of a partner brand supplying their services to benefit another product. An example of this is the Nexus phone which is 'Powered by' Google. Such a partnership ultimately benefits the consumer with a far superior product utilising both technologies.
  • In association with - most commonly used when both brands have an equal role to play in the partnership. The term association means that both brands have agreed on a mutual partnership offering.

The Future is ripe

With everything we have been discussing it makes sense to say that as digital and performance marketing expands so should partnership marketing. There is a direct correlation between increased communication and the growth of partnerships. 

As channels such social media continue to increase in popularity, everyone becomes more connected. Consumers talk to each other and new markets continue to open, in turn leading to increased competition as well as opportunity. With this being said, the need for collaboration will expand as brands fight to survive and capitalise. All in all the future is ripe for the taking, for brands using any of these 10 types of partnership marketing.

James Cristal

Published 20 June, 2017 by James Cristal

James Cristal is Growth and Partnerships Manager at Nutmeg. Connect with him on LinkedIn.

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James Cristal

James Cristal, Marketing Manager at Nutmeg

If you are interested in learning more about Partnership Marketing I really recommend this course: https://www.udemy.com/the-complete-guide-to-partnership-marketing-course/

5 days ago

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