Strategic Partnership concept on the gearwheels

Kevin:  Hi, I’m Kevin Danaher.

Danette:  And I’m Danette Gossett. This is the third in our serious about partner marketing and why it’s so important to explore developing strategic partnerships for your business. In our first segment we discussed why you create a strategic partnership. Of course, the bottom line is to get more customers and grow your business but basically you are looking to expand your audience, enhance your brand perception increase your profits and of course get new products and new segments. Hopefully you got a lot out of that segment and we are going to continue to expand that.

Kevin:  We also discussed how you could uncover what you could offer a partner. Oftentimes there are benefits that your product has that our partners would like to team up with. So, the four areas we discussed were looking at your customer segments and your audience database and different analytics you might have. The product benefits that you offer, the distribution channels that you use, and the positioning that you use in advertising.

Danette:  I think we covered a lot of really valuable information in those segments. Today we are going to start talking about the various types of strategic partnerships because there really are a good number of ways you can develop a strategic partnership. So, what are those Kevin?

Kevin:  Well, I have been involved in a lot of strategic partnerships and there’s all types and sizes. The ones I have been working with a lot were sports or licensed properties theme parks and events. Another one is special events where you can sponsor a special event. There’s cause related marketing which is working with nonprofits that have a cause that you might share and then there’s loyalty programs, you can work within loyalty programs with partners.

Danette:  Great. You and I talked about a really good one that Avis did years ago.

Kevin:  Right, and Avis became the official sponsor of the National Football League. It was a standard sponsorship package that we liked but we wanted to enhance that based on our needs. That’s something everybody should do, when they have a partnership they should look at what their needs are and come back with a counter proposal.

Danette:  Exactly, that’s one of the things that I have always found a little irritating sometimes is when someone puts down a sponsorship package, looks at it and says this is it. A lot of people are afraid to say oh, well I don’t really want to have that and that, but I would love to have this. Most companies and/or events will bend their rules for you if you are coming in at a good level. Obviously if you are at the lowest level of sponsor they aren’t going to give you a lot of extras, but if you are a high level sponsor of a program you can get a lot more out of it. So, we did that so effectively with Avis and the NFL.

Kevin:  As a side note I had a sponsorship arranged with some companies and I used to tell people that I was selling was sponsorship was a state of mind. So, with the NFL we took their standard package and because Avis was the company that had the slogan we try harder we came up with we try harder than the player of each game and that was on the Jumbotron as well as the announcers would say that on the speakers at the end of each game. It branded Avis with the game and the NFL. Another thing we did was we had an ad campaign that we were paying for anyway we were able to work with the NFL to do a joint ad campaign with Avis and the NFL so, we had this cost of sponsorship that we had to recoup somehow. We looked at different ways to take what we had in existence already and make them work for us. So that was the joint ad campaign. Then we took the program guides for every week and we put an ad campaign in that which was part of the sponsorship anyway we just customized it to our needs. We also got the list of season ticket holders from them. We sent out a special Avis rollout discount for all of them we developed a new affinity group with NFL season ticket holders that became loyal customers.

Danette:  To me that hits all of the reasons why you actually do a strategic partnership. Because you expanded your audience through sending a direct mail to all the NFL season ticket holders. You enhanced your brand presence because you now are the “we try harder” game sponsor and it reinforced that message. You increased your profits because all of a sudden you have more people renting avis cars and you actually kind of created some new segments by having that affinity with the NFL. So, that kind of hit all those reasons why you would have a strategic partnership.

Kevin:  I was the director of partner marketing for Avis rent-a-car, every partnership we would all sit down and come up with a calendar we wanted to achieve over the year and ways that we could get partners. The greatest compliment we ever got was all of our airline partners said that Avis was the most aggressive marketer within their programs. So, that’s the trick, if you are going to take the time to have a sponsorship you really need to look how it’s going to work for you and negotiate.

Danette:  Exactly, and I think that when you are putting together a program you don’t have to be a large corporation live Avis to be aggressive. You can still be a small business I’m a big proponent for chambers of commerce, I’ve been in business for a long time and being a member of the chamber of commerce has been really good for me in growing my business. They have sponsorships of things on a regular basis. We have a number of companies that they are getting their name out there every single month at various events because they have decided to have that strategic partnership with the chamber of commerce and they are broadening their audience every month because every month at different events you have different people coming and different sized businesses and it does work but you have to really think about putting a plan together. You need to attack your strategic partnerships the same way you do every aspect of your business.

Hand drawing Win Win Puzzle Concept with black marker on transparent wipe board.Kevin:  Another partnership that I did. I lived and worked in Lake Tahoe for a little bit, my business partner at the time was really into the cause for juvenile diabetes research foundation, JDRF. Wherever he went, he always tried to do a special event to benefit them. His daughter had type one diabetes so he was really involved in that. What we did was we worked with the JDRF to put together a lake Tahoe food and wine festival. Because we are in the business for selling sponsorships we actually went out to sell sponsorships to car dealerships association as well as a major boat company and we put together sponsorship packages then we worked with each sponsor to make it work for them. They wanted the upscale audience they wanted the cause related marketing effect and we did all that for them and then what we did is we got access to their lists, to their websites, and we did affiliate programs with them as well. So, it was a win-win for everybody and it was a cause related special event so we combined many elements all together to make it all work. Distribution marketing partners, so everybody uses distribution channels to get their product or services out to the world. The trick is finding customers where you aren’t. So, let me just talk about the different types of it. In the distribution channels there’s producers, the sales agents, wholesalers, retailers and consumers. That would be the distribution chain. So, in there if you could actually develop promotions out of a strategic partnership you could reduce cost, expand awareness and uncover new customer channels.

Danette:  I didn’t put the partnership together but I am the recipient of the strategic partnership. I used Clinique and I am a Macys shopper and I like to shop online at Macey’s so I’ve been looking at Clinique products and purchasing them online. As part of that every time I have an opportunity to include a couple of non-Clinique products in my order. Every single time they pop up. And a lot of times is perfumes, and I get samples of all these different types of perfumes. They are not Clinique oriented so Macy’s has put together a strategic marketing partnership in the cosmetic area so that every time I order anything from them they are including what I ordered from that brand but also they are including other to get me to potentially purchase a different brand, and I have. The next time I go online to odder I have added one of the perfumes and that type of thing so it’s a different kind of strategic partnership but if you are an online business or doing a lot of online marketing that if you can put together additional programs such as that I think it could be worthwhile. From a sampling perspective for a strategic partnership.

Kevin:  And that example that’s a producer that doesn’t sell direct to consumer. They have a deal with the retailers. So they are going through the retailer Macys and macys wants you to buy that product vs. going to their competitor so they are going to value that offer to do that. So, just think about it, whatever your distribution channel is, if you are an online website that sells products and you go directly to consumer how could you develop a promotion to get people to buy from you directly? So, some ideas are look at advertising, special events, packaging, merchandising, there’s different things that you could do to make your product stand out from the competition. The other thing is affinity marketing partnership. Many of us, we have credit cards that have an affinity with frequent flyer miles.

Danette:  I also enjoy Sandals resorts, I ended up going to one a few years ago, I fell in love with it and now I try and go every year. Now I have a Sandals credit card, I didn’t get that initially but, over the last year I got a sandals credit card and on the cover of the sandals credit card is a beautiful scene of a sandals resort. Recently I was using the card because I’m going to be going to sandals in another couple of months, I want to build up some more points so I can get an additional discount on my stay. I used it at a retailer and the sales agent was like wow, that is a beautiful scene have you been to sandals before? I’m like absolutely, I’m a big fan, I’ve gone many times before and she started asking me a lot of questions about it. So, not only did that affinity program work for me in making me want to use that credit card to get discounts on my future trip but it also in my mind expanded their audience because I really do believe this woman was going to go home and book a trip on Sandals. That’s a different type of strategic partnership where visa and sandals got together to give us a good program but it also really helped for sandals because they are all of a sudden getting more exposure.

Kevin:  So the definition of an affinity program is organizations of people that share the same interests. So when you look at that that’s a good credit card example. Then there’s associations, there’s alumni associations or clubs, ski clubs, or Florida has a big ski club. That’s a good market to go after because that’s and upscale market with a targeted interest. So, if you are a producer of ski poles and you wanted to advertise to an upscale affluent dedicated group that would be a good one to go after.

Danette:  A lot of times that’s why you see offers in the mail from other businesses that are related to ski club or to travel because that’s even expanding your strategic partnership so that you are really promoting the Florida ski club, but on top of that you’ve got promotions for ski wear or ski equipment. So, it really ties it all together.

Kevin:  And another way to look at it, I live in a big college town and they offered a credit card for a little while, that anyone who went to the university that had the credit card and pulled it out at any retailer in that town all of a sudden were identified as part of a tribe. We were a group of people that had an affinity for each other and it really got the conversation going and it really helped with networking. Just looking at different affinity groups and how your business might relate to them and coming up with a promotion to offer. When I worked with bank cards a lot all of the sales promotions were about how to get people to use their credit card more. The fastest growing area is the affiliate marketing program. It’s a performance based marketing in which a business or one or more affiliates that each customer brought to them. So online this is the biggest thing that’s happening. A lot of people have blogs or auth. Websites or business websites if you have an affiliate program you can sell products on your site that aren’t related to your business or they could be related products that are affiliated with you that if you are a chiropractor you could have a site and offer pillows, or something you are involved with that you could write an article and promote it like that. So those are the three levels of affiliate partnerships. The ones that you are involved with you could probably promote a lot better and offer more.

Danette:  And that’s what you’re trying to do, from a strategic partnership perspective is someone is maybe you are the pillow and maybe you have a website for your pillow but you want to expand your audience which is part of strategic partnerships so you go to your local chiropractor or the chiropractor association and you give them a dollar for every pillow purchased or you give them a percentage off and then they are on your site and you are on their site because that’s that partnership aspect so you are sending them more clients and they are sending you more purchasers of your pillow. You don have to be a large company to put together an affiliate type program.

Kevin:  anybody can do it that’s why it’s the fastest growing. You talked about you signed up for someone’s newsletter and they came out with a book.

Danette:  I love reading and I signed up for a newsletter and the next thing I know he is promoting a friend of his that had written a book. If you purchased the book within a certain time frame the gentleman that was writing the newsletter was also offering a bonus where he had a whole series on a particular program and you got that for free. So, to me that’s kind of like an affiliate program. I didn’t know this person at all about the book but I did respect the gentleman that was writing the newsletter and he said if you are enjoying my newsletter you are going to love this guy’s book and it’ll help your business. I was like okay, so I was able to get the book and more than what the newsletter had usually offered. They aren’t famous people they aren’t name brand. So, as I was saying you don’t have to be a large business to put together an affiliate program. You can truly be any size business just find complementary avenues that will work to help you both increase your profits and increase your audience.

Kevin:  So, the most important thing to remember is sponsorship is a state of mind, what is it that you want to achieve even within the parameters of the sponsorship package there are things that you can do with your own marketing to make it work for you. The other thing you want to remember is that you want to work as a mutual partner when you get involved in a partnership. So, rather than being dictated what the parameters are you want to be able to work with them to reach a common goal and maybe even increase their awareness and their audience based on what you can bring to them. In summary the types of strategic partnerships are sponsorship partners, distribution marketing partners, affinity marketing partnerships and affiliate marketing partnerships. So, those are the four different types as you can see in a lot of the discussions there is an overlay of these types you may have an online business and sponsor a little league team, something as small as that may help you grow your business.