A Framework for Brand Partnerships

In the last several months, we’ve seen interesting constellations appear, oftentimes when well-established companies from the software world begin working with more hardware-oriented businesses and consolidating their expertise.

Here are some examples:

  • Netflix joins forces with LG to provide prepaid access to Netflix in emerging markets (e.g., for people without credit cards)

  • Ford partners with Amazon to bring together connected cars and connected homes with Amazon’s Echo and Alexa technologies

  • GM and Lyft team up to face Uber and develop self-driving cars

  • Under Armour works with IBM Watson to create a new fitness app

This small sampling illustrates the core idea of brand partnerships: open up new strategic options, gain entrance to markets that were inaccessible before, incorporate new expertise, and add or stress facets of the brand.

Co-branding and partnerships are not new. In fact, they’re well-established instruments. However, there is always the question of which brands to choose for partnering. This post proposes a straightforward and easy-to-implement tool for evaluating potential partners.

Brand partnerships not only have an impact on a product and a business level but also on the (perceived) brand image, which is arguably even more important. That’s why potential partners should be evaluated carefully, as they might do considerable damage to the brand’s reputation.

To evaluate a partnership, a simple framework that concentrates on the direct implications of a partnership is very useful.

  1. Customer benefits: Brand partnerships should be beneficial not only for the involved brands but foremost for their customers. This is why, when thinking about a potential partnership, the first question should ask about real customer benefits.

  2. Brand fit: How well does the potential partner fit the (aspired) brand image? This question is probably the most difficult to answer. One good possibility is to evaluate the fit to the brand’s values.

  3. Benefit assessment: What are the benefits that may arise from the partnership? These benefits might be of financial nature, or they could work on a more subtle, indirect level (e.g., a positive image spillover). Possible dimensions for assessment are brand image and reputation, benefits concerning the business model (such as tapping into new geographic markets or introducing new payment models), and the product range (such as co-created offerings).

  4. Risk assessment: What are the risks of the partnership? As with benefits, the risks might be directly financial, or more strategic and image-related risks.

  5. Target group match: Are the target groups of both brands compatible with each other? This strongly depends on the nature of the brand partnership, and can occur in several forms. Most importantly, a brand partnership has the potential to grant access to aspired yet untapped groups. By the same token, two brands with mutually exclusive target groups might not be the best partners, both from an image and a business perspective.

This simple framework enables brand managers to quickly evaluate potential brand partnerships. It can be easily refined and customized (by assigning different weightings to the dimensions, for example). However, this tool should be used only to get a first idea of possible risks and potential benefits. After the first screening, the potential partner should be scrutinized in detail.

For maximum effectiveness, the framework can be implemented in a standard process for evaluating potential partnerships, possibly as an online tool within a brand management system.

Matthias Höckh is a brand strategist at MetaDesign Berlin.