We detail how chief marketing officers can lead their organisation’s external partnership strategy more effectively and successfully.
The reasons for striking a partnership with another brand are wide and diverse. From extending audience reach and brand attributes to product and services expansion, cultural and social alignment, improving commercial dividends and solving a customer pain point, the list feels seemingly endless and full of opportunity.
What’s more, statistics show partnerships can really deliver financial impact as well as in terms of acquisition and consideration through to retention and loyalty. According to a joint Forrester-Impact 2019 survey, companies with mature partnership programs were found to grow company revenue nearly twice as fast as other companies and are five times more likely to exceed stock price and bottom-line profitability. Partnerships in this survey encompassed everything from strategic partners to B2B partners, affiliates, influencers, licensing and app-to-app integrations.
But just what kind of external partnership are worth pursuing? And how do you shore up the best chances of success when you do partner with an external player?
Over the course of 2021, CMO has been exploring brand partnerships in the A/NZ market, investigating what opportunities are presented by disruptive forms of partnership, the macro and consumer trends driving the need for external partnership, how COVID has driven this appetite and permission to extend partnership strategies, and what it takes to make them successful.
Here, we round-up seven key tips we’ve gleaned from leading Australian CMOs and industry thought leaders.
1. Ascertain your levers of growth
Finding the path to external partnerships that can drive business impact means firstly understanding your role as a driver of organisational growth, Deloitte Digital’s national lead for new proposition and venture design, Tim Davis, says.
“What’s the reason to do it? Is it to fuel your brand and keep things ticking over and keeping your brand interesting, or is the reason to do it because you see it as a strategic driver of growth for the business?” Davis asks.
“Are partnerships a lever you can pull to do things you couldn’t otherwise do with your business model, and serve your customers in other ways you couldn’t otherwise have served them? If you see it this way, the idea of just putting your logo beside someone else’s logo feels like child’s play.”
That’s not to say more traditional forms of brand partnerships aren’t critical. There are plenty of good reasons why you would look to extend and pursue – improving reach, tapping a new set of consumers, aligning to a brand to lift your social and environment credentials, and building engagement with existing customers, to name a few.
“But if you are a CMO who says I want to stake my claim on being a growth engine of this business and be a strategic growth driver changing the way we connect to customers and go to market, then external partnerships should be very interesting to you,” Davis says.
The opportunity to think differently about external partnerships in 2021 is one where the CMO can take a true leadership role.
“We’re seeing the words partnership, collaboration, ecosystem and taking a proactive role in shaping the context in which your business exists and the context with customers on the list for the vast majority of CEOs we talk to. But there is a breakdown between that and what their organisations are then able to do – there is a void there. That’s an interesting opportunity for the CMO,” Davis says.
“CMOs have the ability to be the connector and also if they step up and make the claim for being the driver of top-line growth, then they can pull the pieces together to enable successful partnerships.”
2. Use brand as a guiding light
At Reckitt Benckiser, owner of brands such as Dettol, Nurofen, Gaviscon and Durex, partnerships are driven by the strategy and unique characteristics of each brand.
“The way we’re looking at and approaching partnerships has a very simple starting point: Where we’re really clear on our brand purpose and where we can enter partnerships to help us better deliver on that. It’s a great case of doing well by doing good,” marketing director of RB Health, Henry Turgoose, says.
“It all starts with being clear on our brand purpose. And often, you are much more likely to deliver on your purpose by partnering with somebody.”
At Binge, ensuring partnerships pursued not only make sense but also prove impactful has been underpinned by the work done to clearly articulate its brand position, values and approach to market, CMO, Louise Crompton, says.
“I’m a big believer that if you get your brand architecture right, it can be very organising and help you make really clean and clear decisions. We did a lot of work in launching Binge to clearly articulate our point of view and purpose,” she explains. “When it came to looking at The Iconic opportunity around our ‘Inactivewear’ launch, for example, it was simple and easy to tick that partnership box; it made absolute sense.”
Crompton says her team uses brand architecture as a set of guardrails to determine external partnerships through the funnel.
“Does it to help us tell our story, to convey our brand point of view, and is there an alignment from a personality and brand positioning perspective? If you get your architecture right at the beginning, it becomes quite simple to work out which partners are right for you,” she says.
3. Be prepared to compromise
But just because you have a clear brand proposition, it doesn’t mean it’s shared by the partner you’re looking to work with. Uber head of marketing for Australia and New Zealand, Andy Morley, says partnership success requires a willingness to find a solution outside of what both businesses are currently doing.
“I have seen contracts between businesses go round and round in circles, delaying projects. It often takes a real commitment from one side to say you know what, I’m happy to step outside our normal processes because I’m passionate about this and need a partner for that,” he says. “People actually have to move away from doing business the way they’re used to. You also need that passion and commitment from all levels of leadership at the start to be able to find the solution that takes the partnership forward and who’ll say it’s ok to do things differently.
“Both brands need to understand how they are going to partner together, where the no-go zones are, what resources they’re going to need on both sides and identify those who’ll champion it to find solutions. And businesses need to show more flexibility – so often, this is where partnerships generally fall over.”
Turgoose agrees there can’t be a one-size-fits-all approach applied to external partnerships. The framework RB uses to scope and build its multi-year Cricket Australia sponsorship partnership, for example, was wholly different to how it looked at a partnership with Uber in 2020 or other travel, entertainment and leisure partnerships in the face of the COVID-19 global pandemic.
“Partnerships depend on situation, businesses and brands involved. To try and put them through a ‘sausage machine’ of an approval or building process doesn’t enable you to take the other partner’s priorities into account,” Turgoose warns. “Partners have different assets – for example, they might have a huge organic following and owned assets we’re interested in getting exposure through; or they might be looking to entirely borrow Dettol’s equity.”
The more diverse and open-minded your partnership portfolio approach is, the more opportunity you give yourself to test-and-learn, says Crompton.
“We are all very set in what we do and have our strategies. But one of the great opportunities about external partnerships with other organisations is learning about the great ways they position their brand,” she adds. “Take those tips and tricks as you partner with them and the way they see the world.
4. Have a clear framework and measures of success
This doesn’t mean the absence of any guidelines or framework, however, and there are still hygiene factors that can throw a spanner in the works. While aligning with another organisation might make sense strategically, having the trust between two organisations in order to facilitate collaboration, and things like data sharing, push requirements around partnership up much higher.
“Unless you have access to the legal, finance teams and CEO, you may not be able to pursue these partnerships properly. Knowing your constraints as well as your strategy is important,” Deloitte Digital partner, David Phillips, says.
His colleague Davis agrees what often prevents external partnership are nut and bolts.
“It’s the basic hurdles of how do we protect ourselves commercially and legally, how are we going to share our data? How are we going to collaborate? Who’s office? What are the ways of working? How do we start to trust each other? That stuff is frustratingly hard and feels harder than it should be,” he says.
Booktopia CMO, Steffen Daleng, also sees a framework of operating that makes sense commercially and operationally, supported by teams internally, as vital to partnership success. At Booktopia, one lens overlaid on any potential partnership is commercial, the other is the brand affinity or symbiotic approach.
“You want to work with people who are either on the same level in terms of brand affinity with the people who love your brand and that also love that third-party company and the services they’re providing,” Daleng says. “If you work with your company that’s much stronger in terms of brand than yours, that may rub off as well.
“There also comes a point of diminishing returns on brand equity, but again it comes back to looking at what matters and is valued by the customer.”
Another part is the accountability you have around yourself, the business model and partners you work with, and monitoring how you’re doing against that, tracking and providing that value back to partners, he adds.
5. Know what value means to both parties
Turgoose is another who stresses clarity around how both sides are realising value as vital.
“Approaching things like a genuine partnership, where it has to be materially interesting to the other party as a way of working has been a learning for me, particularly over the last year. It’s about mutual value and embracing that as much as possible,” he comments.
While monetary value and sales growth are often elements of partnership, NT Tourism executive director of marketing, Tony Quarmby, says many of the most impactful and non-traditional partnerships he’s pursued are where there isn’t a monetary value but other forms of pay back.
“That’s where it’s less about numbers and more about relevance and engagement of that audience,” he says. “We would much rather have a smaller and engaged audience, than a large reach and lots of likes and emojis. We try and find those brands and companies with those engaged audiences then have the brand attributes we want to be seen associated with emphasises.”
What’s more, non-traditional partnerships are often about partners outside the travel spectrum. “This allows us to talk to a consumer in a different way to how we normally would,” Quarmby says.
6. Check cultural and sustainability credentials
Yet Quarmby is quick to point out neither audience reach nor external brand alignment would have been worth engaging in if partnership didn’t also have the right values and credentials through their products and supply chain.
“Whoever you partner with, that brand will rub off on you in terms of your brand and the messages you want to put out there. In this day and age, if you partner with the wrong brand and they say or do something out in the space, you’ll be impacted,” Quarmby says.
To overcome this issue, NT Tourism has devised a thorough scoping and desktop research process on any prospective company it plans to partner with, checking their social feeds and followers, eco-credentials, as well as political stance.
“Yes, they may be agnostic in what they believe politically, but even that has a reflection on you. Because if they don’t take a stance, that can increasingly turn consumers off,” Quarmby says. “The days of companies sitting on fences are diminishing quickly. Consumers want to know what you stand for before making a purchase decision. That’s especially the case for high-value purchase decision, which holidays can often be.”
This process saw NT Tourism knock back an approach from one fashion company, for instance. “They were getting a lot of flak for how much wastage their products and activities generated. We didn’t want to be associated with that,” Quarmby says.
“We did see another destination partner with them later and that did come out. You have to be more thorough than ever.”
7. Solve the customer’s problem
With all of that said, impact of any partnership is ultimately going to come from solving the consumer’s problem or need in some way.
“If it’s not a consumer problem that has already surfaced, you will probably find it won’t be super engaging,” Morley argues. “We have spent a lot of time in workshops with businesses interested in partnering, who have a lot of scale or might be interested in an idea worth exploring, and it’s rarely something mutually beneficial for both sets of customers.
“Going in and being really clear about what is the problem is you’re trying to solve and making sure both parties really are committed to solving that is key, because it is a big risk. But when you do it, it’s magic and can spur a lot of other things, partnerships and ideas.”
To unearth these customer pain points and opportunities, Daleng recommends going back to the customer narrative first.
“Sit down, understand your customer and make it into a movie: What is the first thing they do in the morning when they open their eyes? What do they do? What coffee brand do they drink? Do they turn on the TV or an app? How could you work with that app, or get in front of them?
“Figure out who they are, and their patterns of behaviour, then think about what your brand can do within that lifecycle or journey that’s relevant for them.”
This article first appeared in www.cmo.com.au