Companies often partner with other brands within their industry or target the same consumer segments to collaborate on various projects to improve brand affinity, expand brand reach, and produce better-branded services. Also known as co-branding, there are some reasons companies choose to engage in complementary partnerships.
For example, within the technology industry, companies can form alliances with other organizations to develop software and tools that target similar audiences and integrate. Rather than treating each other as competitors, companies in this situation can enter into complementary partnerships to:
- Build a new joint creation or service composed
- Cross-promotion of your products or services
When a company pools its resources with complementary companies, everyone benefits. Other ways these types of associations can manifest themselves include:
- Co-sponsored events, webinars and email blasts
- Joint negotiations with different suppliers to save costs
- Joint advertising and media purchases
For companies looking to offer their clienteles a richer experience, it’s worth exploring possible collaborations with other companies that share similar audiences and values.
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The benefits of a co-branding or complementary associations
- Shared Resources
- Reduction of costs and thus higher margins.
- Brand momentum, especially when both brands are well known.
- Shared risk: Not all risk is taken by one brand
- Better sales and better customer relationships
- Financing becomes easier when two brands mesh.
- Additional experience
- reach of new customers
The benefits of a complementary partnership
To ensure the success of any new complementary association, it is important that the agreement is structured, that the outcomes are clear and that both teams are well organized. As with all aspects of their business, any company must carefully review the potential partner’s offerings before working on a partnership and define what goals they hope to achieve through the collaboration. If planned and organized properly, partnering with another professional or company can further facilitate brand awareness, customer retention and sales for both parties.
Three key benefits of complementary partnerships are:
- Additional experience. Whether you work with another business in your industry or a company from a completely different discipline, you can benefit from their knowledgeable people and experience. This aspect of a complementary partnership is particularly beneficial because it saves costs for both companies. Also, it allows you to offer customers advanced products and services that may not otherwise be available when your business operates independently.
- Reach new customers. All participating companies have their customer base and independent marketing channels. Complementary partnerships allow you to send messages that promote your partner’s business to your spectators. As a result, both organizations should experience increased brand awareness and sales. To further expand your reach, you can use this opportunity to create joint advertising and marketing campaigns to promote the new partnership. Together, they will reach a larger audience and win new customers.
- Higher efficiencies. Complementary companies can make it easier for participating brands to manufacture products and services faster with better quality control standards at more profitable prices. Collaborations like this allow you to leverage all available suppliers and staffing experts to minimize the R&D effort required and negotiate better deals throughout the supply chain.
How to use complementary partnerships for your company
Your company is a unique organization. Owners often see strategies like complementary partnerships used by other companies and don’t immediately see how this model would work in their space.
For example, an entrepreneur who offers courses and advice as a service may not see how a partnership could benefit them. However, there are almost certainly other professionals in the same or neighbouring industries who can complement your existing services.
In consulting, many professionals use a strategy to leverage the platforms of other thought leaders in their specific field and industry. You can form similar complementary partnerships with these category experts by offering courses through their platforms and vice versa. Other options include joint publishing ventures and co-sponsorship courses.
Four tips for building a strong co-brand association
- Create a detailed partnership agreement.
- Consider the market reach of each unit.
- Compare corporate culture and mission statements.
- Research each party’s unique market positioning.
Sometimes complementary partnerships can form organically, starting through conversations with other business owners at conferences, events, or even on social media. Your team must be open to collaboration and cross-promotion, which can create unexpected opportunities to add products and services to your sales arsenal that you wouldn’t be able to offer without another organization’s involvement.
Of course, the success of a partnership depends on both parties committing a mutually agreed level of effort and resources so that both organizations benefit from their relative investments.
How to identify and run successful co-branding campaigns
A well-organized complementary association has many advantages. Of course, partnering with the right company ensures you can conveniently maintain a consistent brand message, effectively target your audience, and maximize your return on investment.
Due diligence is key to determining if a complementary partnership is right for your business and your potential partner. In some cases, a joint effort with the added organization can accelerate the growth rates of both companies and give you access to new markets. However, these goals can only be achieved if you work with a company that is holistically consistent with your business in some ways, and the initiative is well planned and well documented before launch.
Because each company brings its unique brand, culture, and resources, it cannot be easy to list the steps to a successful co-brand partnership. Every opportunity for cooperation must be evaluated and launched individually.