Corporate partnerships allow complementary businesses to deepen ties with their consumers through collaboration that fosters longevity for the brands involved. These partnerships, whether co-branding or co-marketing, offer services and solutions that keep customers engaged and help each other’s businesses become more successful.
Insights into Creating Corporate Partnerships for Your Brand
There are many insights into what is necessary to create successful corporate partnerships that provide unique value propositions to companies’ consumer bases. These include having shared values between partner companies, practicing clear, transparent communication, highlighting and utilizing the complementary strengths of each company, creating an execution plan and timeline from the beginning, and finally, ensuring accountability and measuring progress with appropriate metrics. For each of these insights, we have provided details on how it adds value to the partnership, how it can be implemented and as far as possible, an example of a partnership that was successful because of it.
1. Shared Values
- When entering into any corporate partnership, it is important to do so with another company that shares the same or similar values to your own. For example, a company that promotes and practices environmentally-friendly practices should partner with businesses that also believe and follow environmental stewardship.
- In other words, partner brands should fit each other’s personality and be organizations that share common interests which their target audience will also relate to, and/or benefit from.
- An example of a successful partnership anchored by shared values is one between the Maine Coast Heritage Trust (a large land conservation nonprofit), Sea Bags (a Maine company that makes tote bags from worn and recycled sails), and Eric Hopkins (a well-known Maine artist).
- In 2018, the three collaborators created the Sea Bags partnership because of their shared passionate interest in a healthy and accessible Maine coast.
- As part of the deal, 20% of all proceeds from the sale of bags produced by Sea Bags and featuring a painting by Eric Hopkins were donated to the Maine Coast Heritage Fund.
- The collaboration sold over 150 bags at $200 each, over a dozen limited-edition bags at $300 each and auctioned 3 special bags signed by the artist at an even higher price to support a shared mission of keeping the Maine coast “open, wild, working, and beautiful — now and forever.”
- On the other hand, experts agree that if the companies do not have missions or visions that align with each other, they may end up losing customer trust because of a partnership.
2. Clear Communication
- This one goes without saying but clear, open and transparent communication is key to creating a successful corporate partnership.
- According to the former President of PayPal Canada, Paul Parisi, in-person meetings can be extremely beneficial for external partnerships. These meetings can aid in developing a solid working rapport and ensuring that there aren’t unknown expectations between partners.
- An anonymous energy-sector executive suggests taking the time to connect socially with partner executives in order to understand one another so that effective collaboration and communication occur at the operations level of the partnership.
- In his experience managing dozens of partnerships in the energy sector, “It’s important to spend as much time as you can on their turf.” with only 30 to 40 percent of partnership meetings being about business while the rest of the time is spent building friendships and trust.
- Additionally, transparent communication, especially during the planning phase of the partnership, is important. Transparency is paramount to everyone’s understanding of the partners’ goals and measures of success.
- As Casey Brennan, Director of Community Impact + Public Relations at AAA Northern California, Nevada & Utah, put it:
- “Don’t leave your organizational partnership goals to the imagination. Be up front with your partner! Looking to build your reputation? Want to attract more corporate investment? Say so! Being transparent will help you and your partner be on the same page, and will lead to a more fruitful relationship over time, where each partner can support each other’s unique interests.”
- Breakdowns in trust and communication are common causes of failed corporate partnerships.
3. Complementary Strengths
- Successful corporate partnerships are typically formed between companies that have complementary strengths which will serve a similar consumer base.
- It is important to understand which partner is best at what and to organize the partnership’s strategy to enhance these strengths.
- For example, one partner may be better at manufacturing in terms of capacity and expertise while the other is better at sales and marketing based on conversion numbers. As such, it would make sense for the respective teams at each company to be in charge of those aspects of the partnership as was the case in one consumer goods joint venture discussed by McKinsey.
- Another instance is when the Toronto Parking Authority launched its Green P Parking app to enable mobile phone payments, it teamed up with PayPal to set up its payment option. In this partnership, the Parking Authority team understood the nuts and bolts of parking charges while PayPal was able to lend its expertise in creating a seamless mobile payment experience and its marketing skills to increase usage of the new platform.
4. Execution Plan & Timeline
- Even before approaching a potential partner organization, it is imperative to have clear co-branding partnership plan that can be presented to the other company.
- This plan should relay a clear vision of what the collaboration will achieve, how it will do so and when it will be done. Obviously, this plan will not be final but will give the potential partner a sounding-off board to add their input when moving forward and a structure around which to base future discussions.
- It is also important to set up a to-do list at the beginning of the partnership that encompasses all the activities that need to be accomplished before and during the campaign or product launch.
- This timeline helps to ensure that everyone involved is on the same page and that each step is executed on time.
- It may also be helpful to plan marketing campaigns and releases based on seasons or quarters in which one or both brands see higher engagement or increased sales.
- An example of this is the Coachella surprise party launch of the partnership between H&M and Alexander Wang since many of the consumers of both brands tend to follow social media accounts and entertainment blogs that cover the fashion worn at the festival.
5. Accountability and Metrics
- Experts agree that evaluation is essential to the success of the partnership. As soon as goals of the partnership are set, companies should establish an appropriate set of metrics to gain an understanding of the progress of the initiatives.
- McKinsey states that it is critical for senior executives from partner organizations to continuously oversee the partnership and ensure accountability by keeping operations leaders and alliance managers focused on priorities, advocating for necessary resources and creating a coordinated environment.
- Additionally, tracking the mutual progress of the partnership is necessary for making adjustments if the goals set forth are not being met.
- The success metrics of the partnership will differ depending on the goals of the companies involved. For example, the potential success of the Taco Bell and Doritos partnership was first measured during the creation phase via product taste testing with consumers. In fact, the first tests flopped with customers disappointed by the taste but that caused the teams to share their technical expertise on a deeper level until they got it right. After launch, the success was measured by the number of units sold and the sales growth experienced by Taco Bell as a result.
Corporate Partnership Case Studies
Six case studies of partnerships between large companies that have created unique offerings for their customer bases have been outlined in this research. The examples included are partnerships between H&M and Alexander Wang, Taco Bell and Doritos, Nike and Apple, Proctor & Gamble and the National Breast Cancer Foundation, BMW and Louis Vuitton, and Uber and Spotify. For each case study, details provided include a brief description of the companies involved, their shared values or consumer base, the combined idea/product/value proposition and publicly available details of the partnerships such as duration of the partnership, expected or realized benefits to the companies or reasons for the alliance as stated by company executives.
Case Study #1: H&M and Alexander Wang
- H&M is a Swedish multinational retail clothing company that is well-known for its fast-fashion, affordable clothing and accessories for women, men, teenagers and children. Alexander Wang is an American fashion designer whose brand offers high-end, expensive pieces for both men and women.
- Shared audience: the customers of both brands have the same style and taste in fashion.
- In 2014, the two companies shared a co-branding partnership whereby Alexander Wang created exclusive branded items that were sold at H&M stores for a limited time and at a lower-than-usual price.
- Through the partnership, H&M was able to support its marketing strategy as trendy and fashionable while Alexander Wang exposed its brand name to a “new generation of potential customers, who will increasingly aspire to owning more pieces from his high end collection.”
- The marketing campaign for the collection spanned seven months, starting with a combined branded Coachella party and followed by ad placements in international fashion magazines, celebrity promotions and through social media
- It must be noted that H&M creates a new co-branding partnership with a different high-end fashion brand every year since 2004 to promote luxury clothing at a more affordable price to its customers. The purpose of these collaborations for H&M is to strengthen the “DNA of the brand: high fashion that is affordable and the democratization of fashion”. This Alexander Wang collaboration was highlighted in this research since he is an American fashion brand.
CaseStudy #2: Taco Bell and Doritos
- Taco Bell is an American fast food chain restaurant that serves a variety of Mexican inspired foods such as tacos, burritos and nachos. Doritos is an American brand of flavored tortilla chips, produced by Frito-Lay, a subsidiary of PepsiCo.
- Shared audience: it can be said that the brands share the same consumer base of young people who like indulging in cheap, fast, junk food.
- The two companies introduced the Doritos Locos Taco in 2012 as part of a strategic co-branding partnership, re-inventing Taco Bell’s most popular menu item at the time, the crunchy taco, for the first time in 50 years.
- The Doritos Locos Taco was an innovative take on the crunchy taco shell, combining the taste of Doritos tortilla chips, the cheesy dust residue it leaves on fingers and the structural integrity of a regular taco shell from Taco Bell.
- This product was born out of Taco Bell’s efforts to promote its 50th anniversary with something new and innovative and not an idea that developed because the two brands aimed to reach each other’s customer base.
- However, the partnership was hugely successful for both brands, boosting reach and sales for both brands. In the first quarter after its introduction, Taco Bell saw a 13% growth in sales and in the first year, it sold an estimated one billion units.
- Interestingly, the partnership launched without a formal contract being signed between the two large companies – a handshake deal between the brands’ CEOs was all that existed until a few months later.
Case Study #3: Nike and Apple
- Nike is an American multinational corporation that designs, develops, manufactures and sells sports footwear, apparel, equipment and accessories worldwide. Apple is an American multinational technology company specializing in the design, development and sale of consumer electronics, computer software and online services.
- Shared audience: According to one source the simple formula leading to this partnership is “People who like Nike like to run. People who like to run like to listen to music while they do it”.
- The strategic co-branding alliance began in 2006 with the launch of Nike+iPod and the Nike+iPod Sport Kit, a wireless system that allowed Nike+ footwear to talk with the iPod nano to connect runners to the ultimate personal running and workout experience, where time, distance, calories burned and pace were stored on the person’s device.
- This partnership has endured through the years with the 2016 unveiling of the Apple Watch Nike+, an Apple watch that specifically ties into the existing Nike+ running community through its Run Club app.
- According to Jeff Williams, the Chief Operating Officer at Apple, “Apple Watch is the ultimate device for a healthy life and we wanted to push it further to create the best smartwatch in the world for runners and athletes. Apple Watch Nike+ takes performance tracking to a whole new level and we can’t wait to bring it to the world’s largest community of runners.”
- The co-branding partnership is one that works because it provides a better experience to customers of both companies by aligning their lifestyle goals in one shared product/platform.
Case Study #4: Proctor & Gamble and the National Breast Cancer Foundation
- Proctor & Gamble (P&G) is an American multinational consumer goods corporation responsible for brands such as Tide, Vicks, Olay and Pantene. The National Breast Cancer Foundation is a U.S. organization that promotes breast cancer awareness and education, supports patient and survivors and provides free screening services.
- Shared audience: At the time of the partnership, target consumers of P&G products included women of all ages who buy household goods for their families. These women are also the target demographic for early breast cancer screening.
- These two organizations had a yearslong co-marketing partnership in which multiple P&G products promoted early breast cancer screening through the National Breast Cancer Foundation during the Breast Cancer Awareness Month of October with pink packaging makeovers.
- The partnership began in 2008 when P&G brands such as Bounce, Bounty, Crest, Dawn, Downy, Duracell, Febreeze, Pantene and Tide used pink packaging in October along with a $250,000 donation to the foundation to provide mammograms to those in need.
- In 2010, for the third year of its “GIVE HOPE” partnership, P&G created two special editions of its brandSAVER coupon booklet whereby a two-cent donation was made to the National Breast Cancer Foundation for every redeemed coupon from the booklets. Additionally, the company continued its pink packaging of leading brands during the month of October.
- It is unclear when or why the partnership ended but during the collaboration, P&G was able to raise considerable awareness and funds for the research, education and early-detection screening efforts of the National Breast Cancer Foundation while showcasing strong corporate social responsibility toward a shared interest between the company and its key consumers.
Case Study #5: BMW and Louis Vuitton
- BMW is a German multinational company that designs and manufactures luxury vehicles and motorcycles. Louis Vuitton is a French company that produces luxury fashion items.
- Shared value: Both brands are well-known, traditional brands that are known for high-quality products and that cater to a consumer base that value and demand luxury.
- In 2014, the two companies entered into co-branding partnership involving an exclusively designed four-piece luggage set from Louis Vuitton that was perfectly sized to fit into the interior of BMW’s newest sports car model, the BMW i8.
- While the car’s starting price was $135,700, the accompanying luggage set retailed at $20,000, using an innovative carbon fiber-based material that matched what was used in the car’s interior to create the ultimate luxury travel experience.
- According to Patrick Louis-Vuitton, former Head of Special Orders at Louis Vuitton, the collaboration with BMW made sense because it illustrated the “shared values of creativity, technological innovation and style”.
- Additionally, the partnership aided in adding an element of exclusivity to both products (sports car and luggage set) with increased awareness and favorable associations to another luxury brand with strong style and quality.
Case Study #6: Uber and Spotify
- Uber is an American technology company that offers vehicles for hire, food delivery, package delivery, couriers and freight transportation. Spotify is a Swedish music streaming and media services provider.
- Shared vision: At the launch of the partnership, the two companies had a common goal to attract more users to their platforms.
- In 2014, Spotify and Uber entered into a strategic co-marketing partnership with their “Soundtrack for Your Ride” campaign.
- The partnership allows users of both apps enjoy better experiences by letting those with Spotify Premium accounts (that is, paid subscriptions) choose the music playlist for their upcoming ride through the Uber app, creating a more personalized experience.
- For Uber, the partnership allows it to add value, meaningful competitive advantage and exclusivity to its rides and services. For Spotify, the partnership gives users an incentive to upgrade to its premium content that increases company revenue.