When the economy shifts and budgets tighten, some brands cut their marketing budgets first. This may seem like a good strategy, but studies over time show that investing during an economic hardship can actually help brands in the long run.
During the early 1980s recession, McGraw Hill Research found that business-to-business (B2B) companies that increased its ad spending grew sales by 275 percent compared to 19 percent for companies that didn’t. More recently during the 2020 pandemic, ecommerce channel ad spending grew by 40 percent as consumers purchased everything online, from groceries to beauty products.
These studies show that it’s not about avoiding economic downturns, but embracing the opportunity to refine your processes, understand your customers, and expand your reach. Strong partnerships are the best way to grow your business.
Partnerships deliver consistent value despite economic shifts
Your business can accomplish revenue goals using different partnerships—and the partnering options are nearly endless:
- Traditional affiliates
- Social media influencers
- Mobile partners
- B2B strategic partnerships
- Content creators
- Media houses
- Sub-affiliate networks
In short: partnerships work. According to impact.com data, brands that invested in partnerships from 2020 to 2022 saw impressive results including:
- 29 percent revenue growth per year over the last two years.
- 41 percent growth in 2021 for brands that invested in partnerships early in the pandemic.
Teams may tighten budgets as earnings slim in a challenging economy. While fewer marketing dollars seem like a problem initially, it can be a powerful opportunity to launch a more innovative strategy.
Many brands use programmatic advertising and paid social media. These methods have fixed costs, where you pay for the advertising regardless of sales or return on investment (ROI).
In performance-based partnerships, you only pay your partners when they deliver value—giving you greater control over your marketing spending when you need it the most. Additionally, as the partnership happens in real-time, you can adjust your strategy to focus on high-demand products/services or emerging trends.
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Thriving in an economic downturn [4 partnership strategies]
During a recession, some brands may take cover and pause marketing. If you already have partners, you can use their trusted audience to increase your visibility and grab a newly uncovered market share.
Strengthen your partnership strategy with these tips:
1. Nurture existing partner relationships
The more your partners feel like valued team members, the more motivated they will be to drive results for your brand. Reward partners for their hard work and expertise—especially in a harsh economic climate. Instead of cutting commissions, build a solid foundation to nurture long-term relationships.
2. Discover new partners
When other brands pull out of this revenue-generating channel, that leaves a gap for you to engage in new, lucrative partnerships. Partners want to work with brands offering consistent payouts—providing a flat fee compensation will give you a competitive advantage.
3. Amplify your messaging
Challenging times call for smart messaging. While your public-facing posts must be transparent and reflect the times, you should avoid fear-based messaging. Great partners can help you get this tone and delivery just right.
4. Reward existing customers
On average, existing customers spend 31 percent more than new customers. Through partnerships, this is a great time to promote coupons, sales, gift cards, rewards, and other loyalty efforts to recognize your most important supporters.
Southeast Asian brands that succeeded with partnerships
Every brand measures success differently—some want to increase brand awareness, grow revenue, or increase website traffic. You can achieve all these goals through partnerships, especially when you have the right technology to support you. See how these Southeast Asian brands did it.
1. ZALORA grew its activation rate by 450 percent
ZALORA is the largest online fashion and lifestyle retailer in Southeast Asia. The team optimized their affiliate program to drive business growth. They did this by using impact.com’s partnership platform to onboard and manage partners efficiently. This strategy became a better revenue driver than Facebook and Google.
ZALORA’s team had powerful results with impact.com:
- Their referral program grew more than 150 percent.
- They saved at least 25 hours per month using automation tools.
- Their activation rate grew by 450 percent using custom API solutions to improve user experiences.
- They raised affiliate ROI by more than 50 percent using dynamic safeguards—and shortened payment periods from 120 to 90 days.
2. Sephora saw a 3x revenue growth
Sephora, a global beauty leader, operates 1,900 stores in 29 countries worldwide. The brand also has 200+ stores across the Asia Pacific region, including Australia, China, Singapore, Malaysia, Thailand, Indonesia, and India.
Sephora needed to improve its current affiliate relationships and seamlessly onboard new partnerships. After consolidating partner management onto impact.com’s platform, Sephora saw significant results including:
- $7.4m in revenue from 293 partners
- Three times revenue growth
- 101 percent increase in partner growth
3. Love, Bonito earned 60 percent of its revenue from new customers
Love, Bonito is not just a fashion brand. Its purpose is to inspire women to discover and embrace their best version.
Partnerships are essential in international markets where Love, Bonito’s brand awareness is lower than in Asia. Because affiliate partnerships are a mature channel in markets like Australia and the United States, the company saw partnerships as a key way to gain traction and tap into the Asian expat community internationally.
To leverage affiliate partnerships that drive brand awareness and traffic from consumers worldwide, Love, Bonito launched its affiliate program with impact.com, and saw incredible results:
- The brand’s program grew to more than 200 diverse publishers (a 1,700 percent increase)
- Within a year, Love, Bonito grew its partnerships channel to nearly 20 percent of total new orders
- Up to 60 percent of its revenue came from new customers
- Love, Bonito saw 253 percent quarter-over-quarter (QoQ) revenue growth
Invest in partnerships that deliver results
Partners can help your brand drive purchases, provide incremental revenue, strengthen your messaging, and help support your goals.
But to make the most out of your partnerships, you need the right technology like impact.com’s Partnership Management platform. Easily measure your ROI across all kinds of partnerships, which is impossible when looking across multiple paid media campaigns in different places. The impact.com platform seamlessly manages partnerships throughout its life cycle, from recruitment to payments and tracking campaign performance.
Economic downturns don’t mean the end of your marketing efforts. It’s a chance to expand your programs and deepen partner relationships while other brands pull out. Use this opportunity to set yourself apart in the market and find innovative ways to succeed.
Make informed choices with the Partnerships Experience Academy
Build your partnership strategy with industry-approved best practices vetted by the PXA Council and recognized leaders in the affiliate marketing industry.