Every business is seeking to grow it’s revenue. However, there is one often overlooked marketing strategy which is a powerful revenue driver. Co-Marketing can efficiently and cost-effectively increase customers, revenue and trust.
A survey by VisualObjects revealed 71% of consumers enjoy co-branding partnerships and PartnerPath claims after seeing co-marketed campaigns, 68% of consumers are able to make buying decisions before even speaking to sales representatives.
This article explores why you should be doing co-marketing, how to do it and effective examples in different industries.
What is Co-Marketing?
Co-marketing, also known as cross-selling, collaborative marketing or a subset of partnership marketing, involves two or more businesses joining forces to cross-promote their own products and/or services to each other’s customers.
Why should you do Co-Marketing?
Expanded Reach and Audience
One of the primary benefits of co-marketing is tapping each other’s existing customer base. By collaborating with a complementary brand, your business can reach a wider audience. Imagine that you and your partner both sell non-competing products to HR Managers/ Directors. By introducing or reinforcing your products’ value to your partners’ customers, you are creating and engaging potential buyers for your own business.
Enhanced Credibility and Trust
Partnering with a reputable brand can enhance your company’s credibility and trustworthiness. Customers are more likely to trust a product or service recommended by a brand they already trust. This mutual trust will boost your conversion rates and customer loyalty.
Cost effective
Co-marketing is one of the most cost effective marketing distribution channels. Here’s why… marketing distribution channels could fall into one of the following
- Paid for marketing channels, such as advertising platforms, influencer posts or affiliates charge a fee to distribute your message to their audience. This is quick, but high cost.
- Owned marketing channels are the ones you develop inhouse such as your own websites’ SEO, email marketing lists, customer database, social media pages or in-app messaging. Although distributing the message is free, depending on the activity there are higher labour costs to develop these effectively to attract new inbound audiences.
Businesses who have developed one or more owned channels are ideal as co-marketing partners as you will be using these to communicate with their customers. Not only will you have access to your partner’s customers, but as a mutually beneficial relationship there is no cost, unless you decide to profit share. Keep in mind, nurturing your own owned channels will also make you more attractive when finding potential partners.
Complementary Expertise
If you collaborate with a partner with a different area of expertise, you can leverage each other’s strengths and insights. This diversity can lead to more innovative and well-rounded campaigns, For instance a whitepaper or webinar which will ultimately engage each other’s customer base more effectively.
Avoiding Co-Marketing pitfalls
Misalignment of Goals
One of the main challenges of co-marketing is ensuring your partner has aligned goals and expectations. Differences in objectives can lead to conflicts and hinder the success of your partnership. For instance, you might want to collaborate on inbound content, such as a webinar whereas they might want to push raw promotional messaging to your audience – which you may not be be onboard with. Its essential to be aligned from the get go.
Poor Reputation
You’ve spent time and resources building your brand’s trust and reputation with customers. Co-marketing is about aligning your business’s reputation with another business. When considering new partnerships its essential to do due diligence about their reputation. Depending on their business industry, check recent media article on Google News, customer review sites like Capterra and G2 and Google My Business ratings on Google Maps to ensure their brand does not taint yours.
Brand Dilution
In some cases, co-marketing may dilute a brand’s identity or message. If the partnership is not well-considered, it can confuse consumers and diminish the uniqueness of each brand involved. Think about the perception of your customers. Better to choose quality with fewer, more impactful partners – than quantity.
Unequal Contributions
Partners may not always contribute equally to the collaboration, leading to disparities in effort and investment. This is often true with enterprise business partners, who will often block agreements or sharing any data, such as customer data, marketing and reporting data.
On the flip side smaller businesses might not have the customer audience or marketing resources internally to equally contribute to the campaign. This can result in tension and dissatisfaction among the partners. Its important to set expectations, goals and milestones from the outset.
Legal and Contractual Complexities
Co-marketing partnerships require clear contractual agreements to outline responsibilities, liabilities, and profit sharing. Managing these legal aspects can be complex and time-consuming. Draft out a template of your preferred terms, to get things moving quickly when working with each new partner.
How Co-Marketing Works in different Industries
Retail and E-commerce
Retailers can collaborate with non-competing brands to create exclusive promotions or bundle products. For instance, a snack food brand might partner with a video game to create a new co-branded product and supporting campaign. Such partnerships could have two goals – to either attract new customers increasing total addressable market e.g. audience or if they have a strong cross-over audience, increase repeat sales to their existing customers during the campaign.
Technology and Software
Tech companies have several options, they can collaborate by integrating their software or services to provide enhanced solutions to customers. For instance, a cloud storage provider might partner with a project management software company to offer seamless data management and collaboration tools.
Non-competing software companies with similar audiences, for instance two Shopify Apps or Accounting SaaS with an Accounting Membership body could create a pure marketing co-marketing campaign.
Entertainment and Media
Entertainment companies can co-market movies, TV shows, or music albums with brands that align with the content. Product placements, exclusive screenings, or merchandise collaborations can all enhance the overall entertainment experience.
Food and Beverage
Restaurants and food producers can team up to create limited-time menu items or co-branded products. This not only generates excitement among customers but also drives foot traffic and sales. For instance, a coffee shop might partner with a bakery to offer a special coffee and pastry combo.
Conclusion
Co-marketing is a versatile strategy that offers numerous benefits, including expanded reach, shared resources, enhanced credibility, diverse expertise, and data insights. However, it is essential to be aware of potential drawbacks such as goal misalignment, brand dilution, unequal contributions, and legal complexities.
By carefully selecting your partners and crafting well-defined agreements, your business can harness the power of co-marketing to achieve your marketing objectives, increase revenue and stand out in a crowded marketplace. When executed effectively, co-marketing can be a win-win strategy that drives growth, innovation, and customer loyalty.