Partnerships With Staying Power

by Julie Lundy Purser, Simon Thun, Dec 27, 2011, 8:00 AM

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2011 was a year filled with great partnerships. Who could forget William and Kate’s grand wedding watched by billions around the globe, or the unions of Reese Witherspoon, Daniel Craig, and Nick Lachey? There was also the 72-day marriage of Kim Kardashian and Kris Humphries -- okay, so maybe not all partnerships are meant to be.

But not all of the great partnerships of 2011 were celebrity-led or endorsed. In fact, the year featured numerous marketing partnerships that may well outlast most celebrity unions while also changing our perceptions of the power that marketing partnerships hold for our own businesses’ future.

First, however, we’d like you to understand how we think about “marketing partnerships.” Simply imagine two or more companies, working together on their marketing activities, leveraging each other’s strengths to achieve their own company’s business and/or marketing objectives at a higher level than they could alone. Some of these partnerships are intended to drive business efficiencies. Others focus on promoting growth, while others focus on building new equities.

In our view, the most exciting partnerships of 2011 are those that have the potential to trigger the most explosive business growth.

Growth can be accomplished in a number of ways. One of the most common is through an improved brand offer that drives improved perceptions, as is the case in the partnership between Nokia and Microsoft. This partnership, which combines Microsoft’s software-related know-how with Nokia’s experience in creating compelling mobile products, has formed a global mobile ecosystem. This partnership enables both companies to enhance their time to market, as well as extend their established product and service offerings to entirely new markets. It also creates completely new service offerings so that both historic brands can emerge from behind Apple’s shadow.

Another exciting partnership is that among Citi, MasterCard, First Data, Google, and Sprint. The five companies teamed up to create and enhance the mobile app “Google Wallet.” The new app uses Google’s cutting-edge technology, the innovative Trust Service Management of First Data, the digital banking knowledge of Citibank, the mobile payment experience of MasterCard, and the phones of Sprint to enable customers to pay at retail by simply tapping their phone on a PayPass-enabled terminal at checkout. The collaboration created a product that showcases the abilities of each company. It also illustrates how the combination of capabilities across multiple companies can drive world-class innovation that improves perceptions of each individual brand and has the potential to create sweeping changes for customers and several categories.

Marketing partnerships can also increase business growth through enhanced market reach and penetration. One example is the partnership between H&M and Versace. In recent years, select partnerships with style icons have become an integral part of H&M’s marketing strategy. The collaboration of the Swedish fashion giant and the Italian designer not only draws worldwide attention to both brands, but also enables Versace to reach a totally new market through a huge reduction in its normal prices. For H&M, the partnership represents a chance to polish its discount image.

Yet another example is the partnership between Disney and YouTube. It calls for YouTube to invest millions of dollars in the production of an original Disney video series to be broadcast on YouTube in the creation of a co-branded YouTube Disney channel. It enables YouTube to reach a critical, younger demographic, and for Disney to expand its reach to new audiences through new broadcast media.

Partnerships can also serve to raise customer loyalty as is the case of Facebook and Skype’s collaboration. This new partnership literally builds Skype into Facebook, enabling people to message and video chat directly through the Facebook interface on the Skype platform. Such cross-pollination will enable both brands to drive loyalty by making their products simpler and easier to use, in a place (Facebook) where consumers are already spending much of their time.

Another partnership intended to enhance customer loyalty is Groupon and Foursquare. Through this partnership, Foursquare users in the U.S. and Canada can now receive tailor-made local deals, redeemable on the spot, and tied to their current locations. With Foursquare’s established “check-in” service, downloaded by more than 10 million people, and Groupon’s market leading position, both partners get added exposure and increased loyalty by making two great services even easier to use.

How do you create the next killer partnership for your business? The companies highlighted in this article followed several best practices. First, they started with a strong, highly customized concept that leveraged their current capabilities. Second, they created a win-win-win situation that benefitted each of the partners as well as their customers. Third, the companies involved actively worked from concept to rollout to support the partnership via relevant, ongoing initiatives.

So next year, if you want to make the list of the top 2012 marketing partnerships, remember that celebrity endorsements are nice, but a long-lasting “marriage” will depend more on your ability to come up with a shared vision, a true partnership, and an ongoing commitment to driving growth and equity. Kim and Kris could learn something from this.

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