The power of co-branding is clear–it expands your customer base, helps build reputation and boosts visibility. However, this depends on whether the partnership is an effective one. When is co-branding suitable and how do you know whether to jump in or back off? Before deciding on a partnership, here are 3 questions you should ask.
1. How well do both companies complement each other?
The majority of your customer base needs to be receptive to your co-branded product. Hence, both companies need to complement each other in terms of brand image and values. Before agreeing to a partnership, first assess the key messages of the company you are considering. The product of two companies that complement each other is more likely to be accepted by customers who identify strongly with your brand.
2. What are people saying about the company?
Partnering with a highly credible and well-known company benefits your sales in the long term as it helps to increase brand trust. Customers will look to that brand for a particular product or service category. To know what people are saying and if they trust the brand, media monitoring can be useful to gauge the sentiment of online buzz as well as in the news.
3. What are some potential risks that may arise from co-branding with this company?
Above everything else, protect your brand reputation. Co-branding is not only about creating awareness but generating a positive response from your customers. If the partner company has some negative associations, these can transfer to your company and cause its reputation to be tarnished. In addition, consider if customers will start to associate the two brands as one combined brand–this will make your brand lose some of its unique identity and appeal.
Besides the 3 questions mentioned above, consider how a strategy will work out in the digital age. Using certain tools may help your brand gain prominence. For example, Facebook sponsored posts that show which of your friends “liked” the brand.
Some types of co-branding include ingredient co-branding, promotional co-branding and joint-venture co-branding. Ingredient co-branding creates brand equity for materials or parts that are contained within other products, while the promotional equivalent involves persons or events. As for joint-venture co-branding, it features an alliance of two or more companies to present a product to the target audience. The following infographic describes 3 successful examples–try to guess which category they fall under!