Maximize Your ROI with Cobranding: Tips and Best Practices

What is co-branding?

Co-branding is a marketing strategy in which two brands work together to provide customers of both brands with a new, innovative, and collaborative product.

However, it's important to note that co-branding is not the same as co-marketing. Co-branded products are new products that feature two separate brands; co-marketing is where two brands are marketed together, usually with one brand promoting the sale of the other.

Co-branding helps increase brand recognition and provides access to new markets you wouldn't have reached otherwise. With a brand partnership, you can expand your reach and increase your customer base by offering enhanced product offerings to new and different customers.

Examples of co-branding

So, what are some real-life examples of co-branding in action?

Some of the most successful co-branding examples include food-related campaigns, such as Taco Bell and Doritos or McDonald's and Oreo.

Taco Bell launched a successful co-branding strategy with Doritos to offer customers the Doritos Locos Taco. Meanwhile, McDonald's formed a brand partnership with Oreo to feature Oreo McFlurry desserts.

Other examples of successful co-branding include Bonne Belle and Dr. Pepper (Dr. Pepper-flavored lip balm), Nike and Apple (Nike+iPod fitness), and Uber and Spotify (Spotify music in Uber rides).

How does co-branding work?

When it comes to understanding how co-branding works, it is important to understand that successful co-branding campaigns involve partnerships between two companies with similar values and cultures.

To develop a brand partnership, the two brands are committing to pooling their individual assets (in-house experience, teams, brand management, technology, etc.) to come up with a co-branded product and marketing campaign for that product.

It is a partnership between the two brands, and the benefits of participating in such a partnership can tremendously benefit both parties.

Benefits of co-branding partnerships

In a recent survey, it was found that more than 50% of businesses believe that a co-branding partnership can account for more than 20% of their revenue.

Among the various types of branding, co-branding is one of the most effective methods to help your company and brand reach new heights.

Increased brand recognition

If your company chooses to develop a co-branded product, you will be placing your brand alongside another brand, which means that your brand will be recognized by an additional target audience.

For example, if you develop a co-branding campaign with a brand that has a million social media followers, the collaboration will be presented to those million followers, some of whom may not already know about your company. This can be especially effective for local co-branding within a certain market, such as a brand partnership with a local restaurant.

Access to new markets

Your company can also take advantage of co-branding to reach new markets. Again, by taking advantage of the target audience of the other brand, your company could potentially reach a completely new market.

For example, if your company teamed up with a well-known brand that targets a younger demographic, you will have access to a whole new market of potential customers who may not have been aware of your products and services before. By tapping into this new market, you can increase your brand awareness and attract more attention to your other product offerings.

Enhanced brand reputation

If your company is relatively unknown, developing a co-branding partnership with a larger company or national brand can help you enhance your own brand's reputation.

The opportunity to have your brand associated with the positive reputation of another company can help get the word out about your company and develop customer loyalty and brand trust in a new and effective manner.

Competitive advantage

Developing a co-branding campaign with another company can give your brand a competitive advantage because it increases your market share and product offerings. You can appeal to more customers than other companies in your industry, giving you an upper hand.

Combining resources from both companies puts your brand at a unique advantage that others can’t compete with, which helps to increase your reach.

Tips for effective co-branding

To develop a successful promotional marketing strategy for your new co-branded products, both parties will need to contribute their respective resources for the good of the partnership.

Below are some important things to keep in mind as you approach a new brand partnership and work through the process of creating a successful co-branding campaign.

Create a memorable brand name

One of the first steps in creating an effective co-branding partnership is choosing a branding method both companies agree on. After deciding the best way to approach branding, then you need to come up with a memorable brand name.

Your company wants to ensure that both brands are well-represented, and the most effective way to do this is to include variations of both brand names in the new name.

Focus on communication

If you are participating in a multiple-sponsor co-branding campaign, communication is going to be even more important. In a brand partnership with two or more companies, it's very easy for things to get miscommunicated about individual brand expectations and what will be required of each company.

By focusing on communication, you can develop a successful co-branding strategy that will include how the new brand will be marketed and what each party in the partnership will need to contribute to ensure success. Without communication, resources will be wasted, and the campaign may be unsuccessful.

Share resources

Equitable sharing of resources will help ensure that both parties are getting a good return on their investment in the partnership.

Even if one company is larger than the other, both companies should share knowledge, personnel, marketing efforts, technology, etc., in a way that ensures one company is not saddled with all of the costs of developing the co-branded product and campaign.

Leverage social media

In today's digitally connected world, one of the basics of branding is using social media to build your brand and reach new customers. Whether you use targeted ads or influencer campaigns, social media can play a big role in a co-branding joint venture.

As stated earlier, both companies involved in the new co-branded product will be given access to the other's social media followers, but it does not end there.

By using social media as part of your digital marketing strategy, both brands can reach new audiences of potential customers who might not have known about the brand otherwise.

Maintain brand image

When all is said and done, at the end of the day, you want to make sure that your brand maintains its image.

There have been a number of co-branding endeavors that left one partner brand worse off due to a problem with the other brand. To avoid something like this, make sure you carefully evaluate the companies and brands you are looking to work with to ensure you can maintain your brand image throughout the entire experience.

Best practices for maximizing ROI with co-branding

To maximize the success of your co-branding campaign, there are a few best practices that you should follow, such as:

• Set clear goals- These should include both goals for your brand and goals for the overall co-branding opportunity. With clear goals established, you will have a quantifiable target to work towards, whether that is increasing overall sales by some amount or reaching a certain number of new customers. Without clear goals, there will be no way to evaluate the effectiveness of the campaign.
• Establish a strong partnership- In many co-branding partnerships, there will most likely be one partner that has more to offer, whether that's because they're a better-known brand or have a bigger target audience. But if both parties remember that they both have a lot to gain from the partnership and they agree to combine their respective resources equitably, it will help to establish a strong partnership.
• Create an effective marketing strategy- Whether your company has been building co-branding strategies for years or is new to product advertising, an effective marketing strategy is important. Using resources from both parties will be beneficial in developing a strategy that employs the strengths of the two brands to highlight the appeal of the new product.
• Track performance- It's crucial to track the performance of your campaign to ensure that both companies are reaching their goals. By looking at data early on, you can make changes as needed to overcome any initial challenges and ensure you're sticking within the budget.

Accomplish your business goals with successful co-branding

Now that you have an idea of what co-branding is and how your company can work to develop a successful co-branding strategy, it's time to start thinking of potential partner brands you could work with.

But whether you already have some co-branding ideas or are looking for insights to help develop your strategy, Mailchimp has the resources to help you move from concept to campaign.

Mailchimp can provide you with the help you need to get started with co-branding or to work with your marketing team to tweak an existing strategy to ramp up success. Mailchimp has all the tools and resources you need to accomplish your business goals, whatever they may be.