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The Seven Deadly Sins of Partnership

The Seven Deadly Sins of Partnership

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Partner marketing is hot these days. Lots of companies are learning that it’s a highly effective way of driving incremental revenue. If you are focused on doing more business through partnership, be careful you don’t commit these Seven Deadly Sins of Partnership.

1. Thinking zero sum

Partnership is fundamentally about mutual benefit. You win when your partners win. When your best partners are earning a great deal of money, realise that their commission is a byproduct of your revenue. Sounds simple, but you would be amazed at how many brands see large amounts going to partners and start figuring out ways to reduce those fees.

Of course, it’s important to evaluate your commission structure in light of competitive pressures and product margins. But if, say, 6% commission made sense when you fielded the program, don’t punish a great partner that is generating revenue because their monthly commissions “look too high.” If they are making loads, you’re making even more!

2. Partnering with “everybody” 

Some brands want to sign up as many partners as possible, thinking that doing so will increase their revenue and profit. But not all partners are a good fit for every brand. They may attract a different audience, or deliver messages inconsistent with your brand. Or they may not generate enough sales. 

First, think about the classes of partners to work with. Next, make sure that you have signed up all of the major partners that can drive meaningful scale. Then develop criteria that will ensure that every partner you accept makes sense from both a brand equity and financial perspective. 

3. Partnering with “nobody”

I’ll admit, this sin sounds click-baity because really partnering with no one means you don’t have partnerships. But just as you can have too many partners, you can have too few. I know of brands with a tiny handful of partners -- these advertisers are uninterested in spreading their wings, even though other partners might prove valuable. 

One reason for this is that their teams may have limited resources. But many brands can free up resources by finding ways to automate manual processes. If someone spends half of every Monday pasting numbers into Excel, that’s a huge opportunity cost. 

4. Being “pure” as driven snow

The most controversial “sin.” Many brands eschew coupons and cashback publishers because they are perceived as anathema to brand character. If it really is true that your brand never discounts, fine. But brands that never discount are really rare. C’mon. What brand “NEVER” discounts in 2019? My colleagues often joke that there is never not a sale. 

Discounts through coupons and cashback tend to be modest compared to in-store offers. For example, you’d be amazed at what 4% cashback can do for revenue. Do such discounts “subsidise” existing users? A bit. But not as much as 25% off storewide sales. Partner programs often succeed with discounts that are quite reasonable with respect to gross margin. 

5. Mistrusting everyone

One of my favourite things about the partnerships industry is that people love to work together for common benefit. Unfortunately, some marketers view partnership and affiliate as vampiric channels. They believe that we subsidise existing users, help shoppers become addicted to deals and nip at margins. 

We know differently. Partner programs can have negative effects on business metrics -- if you create nonsensical programs. Yet done right they help drive bottom lines. Further, great partners are in it for the long haul. By cultivating direct relationships and sharing opportunities, you create relationships that benefit all sides.

6. Trusting everyone

Fraud tends to be less endemic in partnership than in other digital marketing categories like banners that are measured by soft metrics. Partner fraud is on the rise, though, and it makes sense to find effective ways to detect and prevent fraud. 

While we should assume positive intent from existing and new partners, it also makes sense to monitor and address signs of criminal activity. Trust, but verify. 

7. Knowing “your place”

Downton Abbey fans have heard the downstairs lot talking about “knowing your place” and not trying to rise above it. Forget that. You and partner marketing are too important to stay below the stairs. 

Other than house emails, partner marketing usually delivers the highest ROAS of marketing tactics. A recent study from the US-based Performance Marketing Association showed an average 12:1 ROAS. 

But in too many organisations, partnership and affiliate investment are a little stingy. Some brand leaders think partnership is a modest potential niche. You can accept that and go about your marginalized way. Or you can demand people recognise the astounding results and growth potential. Make them understand that partnership should be at the centre of a brand’s growth plan. Because not investing enough in partnership is the greatest “sin” of all. 

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Jessica Goodall

Jessica Goodall

    Jessica Goodall is APAC Customer Success Director at Partnerize, the leader in partner automation solutions for global brands. Prior to Partnerize, Jessica was a digital account manager at Traction Digital.

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