David Yovanno is the CEO of Impact, a technology company helping enterprises grow through partnerships.
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The concept of partnerships has been around for some time. It extends from the recent definition of traditional affiliates and social media influencers, and even further back from the Industrial Revolution and big business in the 1800s. The original partnerships — two people or groups working together for mutual benefit — have probably been around since the dawn of civilization. We have long known the inherent benefit of working together.
But today’s modern partnerships offer unique opportunities for business growth that didn’t exist even 20 years ago. So where did modern partnerships come from, where are we today and what’s next? Let’s explore.
The Inception: Affiliates
Picture this: It is the late 20th century, the World Wide Web has emerged as a staple in the everyday consumer’s lifestyle. With this new platform, all of a sudden marketers had customers across the country — and across the world — within their reach.
The mass adoption of the internet in the late 1990s and compounding investment into digital advertising gave rise to the partnership channel — and changed how businesses distributed goods and services to consumers. Fueled by affiliates, companies expanded technology’s reach and accelerated sales like never before. As the marketing world matured, so did the channel, giving rise to today’s modern partner.
The Evolution: Partnerships Expand
As technology evolved, the partnership channel evolved with it, expanding its definition. The modern-day partnership is really an umbrella under which lives a wide variety of third parties. Partners can take many forms including influencers, loyalty programs, coupon sites, app-to-app integrations, ambassadors, social responsibility relationships, content publishers and more.
Now the industry is seeing the emergence of partnerships as an entirely new channel that’s distinct from marketing or sales — one that enables businesses to not only expand their revenue channels, evolving beyond sales and marketing, but also create unique experiences for the customer and sustainable growth.
A few benefits of the partnership channel include:
• Sustainable growth: In a 2019 study my company commissioned, Forrester found that companies with mature partnership programs grew overall company revenue nearly twice as fast as their peers.
• New markets: Partnerships allow brands to tap into their partner’s audience, sharing brand equity to create an opportunity to connect with a new audience.
• Diverse programs: Diverse portfolios are made up of a mix of influencers, ambassador programs, media partnerships and more.
The Present: The Modern Partnership
Today’s modern partnership is driven by a few select — but key — trends in the marketplace, the first of which is trust. The modern partnership is no longer beholden to a transaction. As such, it requires a deeper and authentic relationship where each party believes and invests in the other, with the ultimate goal being partnership nirvana: good fit and deep trust, resulting in perfect happiness for both the partners and the customer. Strategic partnerships can both accept and drive traffic to and from each other in complementary, mutually beneficial ways. The partnership between Spotify and Starbucks is one example.
The modern partner was also encouraged by the rise of direct-to-consumer brands. By nature, DTC companies were created to break the mold and cut through the red tape of industry giants. Harry’s, a founding father of DTC razor brands, entered into a partnership with Target. (Full disclosure: Harry’s and Target are clients of ours.) The partnership allows consumers who prefer traditional retailers to purchase Harry’s products from the brick-and-mortar store while also opening the door to existing Harry’s customers to come into Target and experience new merchandise.
Ultimately, the emergence of the partnership economy we know today was driven by the player at the center of it all: consumers. Brand trust grew in importance as a result of demand for it by consumers. The rise of DTC came because of their direct — pun intended — appeal to serving their audience. So success requires the same focus on tracking and responding to consumer behavior; it’s central to modern partnerships.
The Future: Endless Possibilities
Evolution is grounded in the ability to survive in a dynamic market. The traditional transactional partner — started decades ago — has evolved into modern partnerships.
“What was once called an ‘art’ is now very much a science, and there is no going back to the old back-of-the-napkin ways,” wrote Jay McBain, principal analyst, channels, partnerships and ecosystems, at Forrester. “With 75% of world trade flowing indirectly (WTO), the time has come for channels, partnerships, and alliances to be enabled with the same level of passion.”
So how can brands start their own program or improve an existing one? A more recent Forrester study we commissioned outlines seven key phases within the partnership life cycle to carefully consider:
• Planning
• Discovery and recruitment
• Contracting and payouts
• Tracking
• Engaging
• Protecting and monitoring
• Optimization
Each phase has different goals and objectives depending on the maturity of the program. Low-maturity beginner accounts should focus on defining a go-to-market strategy, end goals and targets; high-maturity, experienced accounts should focus on building coverage maps and persona profiles, as well as capacity planning.
To Infinity And Beyond: Growth
There is no universal partnership program — diverse products and services across diverse industries demand a curated approach to partnerships, and they must reflect a brand’s individual business goals. What remains true is that there are great potential and versatility in using partnerships to succeed. As the partnership channel continues to evolve, partners not only benefit from each other’s services but also each other’s audiences, creating a richer end product for the consumer and continued growth in the changing marketplace.
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Author: David Yovanno, Forbes Councils Member
