By Mike Head, chief partnership officer, Impact.
Originally published on Internet Retailer.
During times of market upheaval, we’ve seen that retailers look to marketing channels that provide accountability and attributability, zeroing in on ROI safe havens. Consumers have had to shift from physical shopping to e-commerce, and retailers have had to shift too. Partnerships have helped with sales figures but have also allowed retailers to broaden their audiences, sustain their brand messaging, and keep their ROI strong until full recovery is on the horizon.
This confidence in the channel reflects an overall shift to partnerships over the past several years, driven by a confluence of forces, with trust and referrals being key. According to a 2019 brand trust report by Edelman, 63 percent of consumers trust influencers’ opinions of products more than what brands say about themselves, and 58 percent of people have bought a new product in the past six months because of an influencer’s recommendation.
Partnerships drive revenue growth
Forrester has determined that companies with the most robust, mature partnership programs grow revenue nearly 2X faster than their peers. Just as impressive, mature partnership programs yield better business outcomes.
Companies with high-maturity partnership programs are also 2X more likely to exceed stakeholder expectations on crucial business metrics like stock price and bottom-line profitability.
According to Wolfgang Digital last year, the average retailer generates about 20% of its revenue from paid search. But partnerships are proving even more lucrative. Lenovo, for example, drives 25% of its revenue through the partnership channel. This figure is typical for companies fully invested in the partnership model. according to Forrester’s global survey of more than 454 companies. A significant 76% of those companies agree that partnerships are vital to delivering on their revenue goals.
But what does it mean to be fully invested?” One common denominator is technology, which is where big ROI figures start to kick in.
The slam-dunk of partnership automation: 314% ROI
As partnerships become increasingly crucial to revenue growth, so does enabling technology. And according to recent data, investments in partnership automation pay for themselves several times over.
Total Economic lmpact TM (TEI) is a Forrester Research methodology used to quantify the tangible value of technology platforms. Recently, they analyzed the benefits, costs, flexibility and risks associated with investing in partnership automation.
To gather data, Forrester conducted in-depth interviews with five companies with robust partnership programs generating about 11M in annual revenue to create a ·composite· organization. Before adopting the technology platform, the composite organization struggled with disparate systems, manual workflows. and myriad legacy technologies that failed to manage the end-to-end partner life cycle effectively.
In just six months, the organization was getting payback from its investment in technology, more than exceeding the cost of investment. After three years. it was seeing remarkable bottom-line business benefits equating to 314% ROI.
Scaling partnerships with automation
The key leveraging partnerships as a significant growth channel for retailers is the ability to scale. That’s what makes automation so essential. It allows organizations to efficiently manage a large and diverse array of partners throughout the life cycle. The potential of partnerships is immense for retailers, and partnership automation offers a way to tap in and scale efficiently with proven, rapid payback.