Mike Head, General Manager, Partnership Cloud, Impact, explores Black Friday lessons.
Originally published in The Cyber 5 2019 Report.
Another Black Friday /Cyber Monday comes, another one goes. And though consumers are setting new records for online spending, sales and marketing aren’t getting the bang for their buck like they used to. Even paid search and its holiday offer engine has leveled off. But there’s another channel that matches and often surpasses paid search: partnerships. There’s a reason why: People trust pre-existing relationships and other customers, and partnerships create new audience opportunities by leveraging this trust. Plus, when retailers want to grow repeat customers, these one-time holiday sales don’t cut it for driving customers with high lifetime value.
Welcome to the revenue-generating partnership economy
Many retailers have explored partnerships with influencer relationships. And, of course, there are affiliate programs that feel as old and familiar as e-commerce itself. But a thriving, diverse partnership economy has emerged to help retail brands truly connect with both new and existing customers. According to Wolfgang Digital’s 2019 KPI report, the average business generates 18% of its revenue from paid search. A low-maturity partnership program can match that rate, while a high-maturity program averages producing 28% of a retailer’s overall revenue.
Choose from a wide array of partnership types
Retailers that want to grow their revenue in 2020 need to look toward partnerships to capture consumer trust and boost sales-and they come in a wide range of formats. Here’s a look at some of the most prominent driving growth:
Strategic brand-to-brand partnerships: These mutually beneficial programs leverage complementary industries or customer needs and are set up to increase sales. The retailer usually enjoys a new customer, while the partner receives a payout for each transaction it delivers.
Social influencers: These are individuals and brands with a devoted following who promote a retailer on social channels, biogs and newsletters, typically receiving a fixed fee per post and/or a commission for sales generated.
Mobile apps: The mobile app space represents 70% of all mobile transactions, and users are three times more likely to convert in-app versus the mobile web. Look for app partners that can drive prospects deep into the e-commerce app with relevant product recommendations.
Corporate social responsibility/charity: Retailers that embrace a purpose-driven brand strategy or a robust corporate social responsibility program can look toward cause-based partnerships.
Traditional affiliates: This type of partnership focuses on businesses that specialize in driving traffic to a retailer’s owned channels, sometimes by providing an incentive to the consumer and typically receiving a commission for leads and/or sales generated.
Publishers, news and content: Premium publishers are embracing a pay-for-value-delivered model, where they promote a business natively within content to drive traffic to owned and earned channels. Unlike advertising, pay-for-value partnerships align the incentives for both retailer and publisher.
The channel to rival sales and marketing
When it comes to partnerships, retailers have no shortage of options to choose from. While it’s true that consumers respond better to trusted partnerships than they do to sales and advertising, merchants can get the most out of their partnerships when the end user understands the logical connection between the two partners when it just feels natural. Retailers can determine which types of partnerships best align with their brand, goals and desired audience. Diversifying and adding new types of partnerships puts retailers in the enviable position for sustainable growth opportunities. Armed with that knowledge, 2020 can be the year that retailers begin leveraging the potential around this proven, but often underutilized, channel. This year, retailers can seize a spot in the new partnership economy and discover new customers, new growth and new opportunities for their business.back to all blogs