According to Neil Patel, 90% of startups fail within their first year of business. Having a great idea or even a proven product isn’t enough to ensure long-term success. As this is the case for most tech companies, success depends greatly on how fast you can grow and reach new targets. That’s why partner marketing is usually vital for success.
What is partner marketing?
Partner marketing focuses on communicating value with and through partners. Indeed, for startups or scaleups, partners are a great route to market for addressing a need or an opportunity they can’t meet alone.
Choosing the right partners helps you create strategic campaigns to benefit both parties. This can truly improve your value proposition or customer loyalty. A great example highlighting this is the partnership between Flipboard and Airbnb (see picture below). Flipboard teamed up with Airbnb to create Experiences, which provide Airbnb users with lifestyle content tailored to their interests.
Airbnb was looking to give more exposure to their new service while Flipboard was looking to create meaningful content for their existing readers. It was a win-win deal. The results were very interesting: the campaign generated 39 million impressions. Flipboard accumulated over 4 million page flips from 440,000 users that engaged with the Airbnb stories. The campaign also helped to raise Airbnb’s profile on Flipboard which drove 38,000 visits to its accommodation platform.
There are several types of partnerships. One of the most common is the model, in which startups join forces with other companies to increase awareness. Others are known as joint Go-To-Market, business-to-business (B2B) loyalty programs or joint products.
Here are five reasons why your startup or scaleup should invest in partner marketing:
Build brand awareness
Today’s customers are very careful about who they choose to do business with. It is tricky to build trust in the age of online reviews. New companies usually enter the market without any social proof nor validation. This makes it hard to build a strong brand reputation, let alone keep it going.
If you can associate your brand with a well-established and renowned company, it can greatly increase your credibility. Partner marketing is the art of approaching those companies which could benefit from a partnership. Of course, there must be a mutual alignment of goals, and every conversation must be focused on a mutual interest in each partner’s goals and initiatives. Have a look at the HBO dating app Bumble case studies below.
Overcome limited budgets
Marketing can quickly get expensive, especially if you’re starting from scratch. Limited budgets can make it almost impossible to compete with established companies. Startups are often up against competitors who can produce huge amounts of marketing content and bid much greater amounts on advertising space.
If you wish to reduce the marketing budget, start by building the right business partnerships. Many hardware companies have been doing this for decades. Instead of investing huge amounts in marketing themselves, they work with third parties to market and sell their products.
Other types of partnerships can also help decrease expenses. For example, a software company might develop a product that could add value to an established platform through integration. In this case, it is useless to advertise to end-users as your tech partner can do that since your product becomes an integral part of their own.
When a renowned brand sees you as a trusted partner, your brand’s visibility and awareness get an instant boost. However, remember the arrangement must also be equally profitable for your partner. That’s why it is necessary to approach the right partners with transparency and authenticity.
Reach a wider audience
Having a great product is merely the first step in launching a business. The next step is to validate it with real-world use cases. This will help you find the right market fit. But it’s really challenging when you have limited exposure.
The partnership between Hired and Pocket demonstrates how you can leverage partner marketing to reach a wider audience.
Pocket is an app for saving articles to read later on and Hired is a job search platform. By running some joint emailing campaigns together, Hired was able to reach new people and Pocket got some amazing content for their readers.
The right partnerships don’t just help you build brand awareness – they also help you identify and gain new opportunities while raising your profile.
Bring value to customers
Customers are more discerning than ever, and they don’t just make purchase decisions based on the price alone. They demand excellent customer experience. This involves the experience they have while using your product, and the service they receive when they face issues they want to address.
It is tough for a startup with limited human and financial resources to offer that level of customer experience. Fortunately, partnerships can provide additional value. Three partnership models can directly benefit your customers and those of your partners.
Some partner brands provide their solution to add value to a new or existing one. This is usually the case among tech companies. For instance, smartphone manufacturers partner with companies like Google or Apple to provide their software. Another popular option is to build white-label products, which involves leasing or selling your products for use under a partner’s brand name. The third option is to merge products into a single integrated unit.
Drive product innovation
Many of the world’s highest-revenue companies have achieved their success primarily through partnerships. Some of the biggest tech firms such as Google, Microsoft, and Amazon, for example, have made billions by integrating their products with thousands of third parties. This enables smaller businesses to use their platforms and increase adoption rates.
As you notice, the boundaries between partner marketing and tech partnership are thin. Indeed, the increased diversity that comes with different visions working together can drive creativity. Partners can then brainstorm new product ideas and features. By teaming up with finance management app Moneybox, Starling Bank was able to introduce new features to its mobile banking app that enabled customers to open savings accounts and round up their spending in real-time.
But partner marketing can also drive innovation on a much smaller scale. After all, some products simply work better together than apart. If a potential partner owns a product that falls into that category, then it’s worth reaching out!
Partner marketing is one of the best practices to increase brand exposure. It also helps reduce risk and present new perspectives on the direction of business growth, as well as drive product innovation. For startups and scaleups looking to break into highly competitive markets, it’s the only path towards success.