Newcomers to partnership marketing may wonder what benefits it can bring to their organization. After all, sales and marketing are proven tactics for growing revenue, which is why so many enterprises still rely on them. Brands already have sales and traditional marketing teams within their organizations so they don’t require any start-up effort. For enterprises that have yet to implement partnerships programs or partner management, the first question asked is often, “why get started with partnership marketing in the first place?”
The short answer: because it works.
What’s the Channel Hotter Than Paid Search?
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Partnership marketing meets changing consumer habits
Yes, sales and marketing are well-established and proven revenue drivers, but they’re losing impact. Consumers don’t trust advertisements, salespeople, or even brands themselves anymore. It’s widely believed that consumers see 4,000 to 10,000 ad messages a day, and 69 percent of audiences distrust advertising. There’s just too much noise.
Even more noteworthy, customers have tailored their media experience to avoid ads intentionally. According to eyeo, the company that runs one of the internet’s most downloaded online ad blockers, 21 million U.S. consumers can be categorized as “ad-aware,” meaning that they actively block ads but aren’t opposed to brand messages.
Partnerships are different because they don’t feel like marketing or sales. People trust preexisting relationships and other consumers. Partnerships leverage this trust, introducing new customers to brands and services in ways that feel entirely natural.
12 benefits of partnership marketing
Partnerships deliver the kind of growth that makes businesses sit up and take notice. Companies that embrace partnerships are already growing faster than their competitors. For example, technology giant Lenovo drives 25 percent of its revenue through its partnerships channel, with 50 percent year-over-year (YoY) channel growth.
If partnerships only provided comparable results to existing marketing or sales efforts, they would be valuable. But they offer so many more benefits. A survey of more than 400 partnership marketing professionals found that:
- 55 percent said that partnerships are an important channel to increase revenue and drive growth
- 50 percent said that the partnerships channel is instrumental in raising brand awareness
- 42 percent said that partnerships improve their customer retention price
Including the three benefits above, respondents revealed a total of 14 benefits they saw from using partnership marketing such as:
- Higher market share. Unique partnerships provide companies with first-mover advantages to capture market share faster than their competition.
- Increased conversion rates. Partnerships often drive highly relevant, high-intent visitors who are more likely to convert than other channels.
- Increased customer advocacy. People trust preexisting relationships and other consumers. By leveraging this trust, customers forge deeper connections to the brands they find via partnerships.
- Improved product ratings. Customers are more likely to leave positive reviews, helping further increase visibility.
- Increased customer lifetime value (CLV). Partnerships work because they take advantage of bonds and connections customers already have. Partnerships also serve as the highest driver of new customers with the lowest customer acquisition costs.
- Improved satisfaction and productivity of internal partnerships program staff The people overseeing your partnerships program will not only enjoy their work, they’ll discover new ways to do it better.
- Gained insight into partner-generated content. One of the great things about partnerships — especially influencer partnerships — is that you can use authentic partner-generated creative in your other campaigns.
- Increased cross-sell/upsell opportunities. It may be obvious by now that partnerships create opportunities to do many of the same things you can do with sales and marketing.
- Increased stock price or market valuation. The halo effect that partners bestow on a brand helps it rise above the competition’s noise, and also creates natural opportunities to deepen a brand connection. In the end, happier customers and higher revenues help your bottom line.
The return on investment (ROI) of partnership marketing
One common form of partnership marketing is affiliate marketing, a performance-based channel where affiliate publishers promote products on behalf of brands. The return on ad spend (ROAS) for affiliate marketing was 12:1 in 2018, according to the Performance Marketing Association’s 2018 Performance marketing study: Full year 2018. An impact.com analysis of a pool of over 2,000 global brands across various verticals shows an average ROAS of 16.08.
For some organizations, partnerships are a bigger growth driver than paid search. According to Wolfgang Digital’s 2019 KPI report, the average business generates 18 percent of its revenue from paid search, while high-maturity partnerships programs contribute 28 percent of overall company revenues. Low-maturity programs contribute 18 percent, according to Invest in partnerships to drive growth and competitive advantage, a study commissioned by impact.com and conducted by Forrester Consulting.
This increase represents an average of $162 million worth of incremental revenue for companies with high-maturity programs. Almost any enterprise will find that amount eye-opening.
Partnership Automation Is the Future
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Unlock revenue and other important benefits with partnerships technology
Whether you’re brand new to partnership marketing or looking to fully commit to a program that’s on par with sales and marketing, it helps to have the kind of technology that can help you capture opportunities. Revenue growth, customer retention, brand awareness, and customer advocacy await.
Want to know more about partnership marketing? Check out these resources:
- Your how-to guide to managing partnerships throughout their life cycle (infographic)
- Best practices: Discover and recruit (ebook)
- Best practices for tracking your partnerships (ebook)
- Best practices for engaging partners (ebook)
- Best practices to protect and monitor your partnerships (ebook)
- Best practices for optimizing your partnerships (ebook)