Tips for successful co-branding

Co-branding is a marketing strategy focused on brand image, involving two or more companies working together. This collaboration enables them to reach a broader audience with new products. 🤝

According to a survey, 71% of consumers like these types of partnerships and the innovations they offer.

In this article, we'll explain what co-branding is and highlight the advantages of this strategy. We'll also share a few popular and successful examples. 🔎

Definition of co-branding

Even the largest global brands can't rest on their laurels, as new competitors are constantly emerging in the market. Your competitive advantage must be constantly maintained. 🔄

While launching and developing a brand is challenging, the true struggle begins with staying relevant over time.

This competitive environment contradicts the main objective of a company: serving customers. Considering this paradox, it's not surprise that consumers often distrust brand messages and advertising.

People just want products and services that meet their needs, but they often suspect (sometimes justifiably) that businesses prioritize profits above all else.

That said, many reliable and well-intentioned brands are committed to improving their customers' lives.

Co-branding is often overlooked as part of a business strategy.

Yet, when properly executed, it sends a powerful message: competition isn't everyhting, and that your brand is capable of joining forces to create even more value for customers.

Co-branding in brand strategy

Within a brand strategy, co-branding is a mutual partnership which benefits two or more companies, in order to create a new product or service, or to collaborate in the brand marketing level.

It officially consists of benefiting from resources and the influence of each partner to reach a common goal of notoriety. 📢

When co-branding is well made, it's a win-win strategy that created a "halo effect" for all the implicated brands.

Co-branding vs co-marketing

Even though these two termss may seem similar, they represent two different techniques.

As mentioned above, co-branding is a strategy where two brands collaborate to create a new product.

On the contrary, co-marketing is a technique aimed at collaborating on a specific marketing campaign.

Co-branding advantages

There are many reasons to consider collaborating with another brand, such as reaching a broader audience for your products. 👥 

You might have an idea for a product that you're unable to develop on your own due to budget constraints or limited resources. In this case, partnering with another brand can bridge that gap and add value for both audiences.

Partnerships also help reduce operational costs and limit risks, especially when working with a reliable partner your customers already trust. 💰

Additionally, co-branding is an excellent way to generate ads and buzz. A fair relationship will always spark enthusiasm and favour sharing and conversations.

Here is a non-exhaustive list of advantages you can gain from a successful co-branding strategy:

• Expose your brand to new audiences

Co-branding allows you to reach a broader audience with a brand of greater or equal stature. This makes the commercialization of co-branded products more easier.

• Improve brand credibility and reputation

If your brand is relatively unknown, developping a co-branding partnership with a well-established company can improve your reputation. 🌟

When you collaborate with a credible brand, your own credibility is reinforced. Collaborating with famous companies that have a positive public perception helps you build trust and improve your image.

• Sales growth

Co-branded products can boost your company's sales. According to data, 43% of consumers are willing to try a co-branded product from a brand they already like. With two combined audiences, interest and potential sales are amplified.

A recent study revealed that more than 50% of bussinesses believe a co-branding partnership can account for over 20% of their turnover. 📈 

• Reduction of marketing costs

In general, when you collaborate with another brand to promote a new product, marketing costs are shared. This allows you to save on advertising campaigns, product developement, and other expenses by dividing the costs. 💲↘️

• Competitive advantage

Creating a co-branded campaign with another company can provide your brand with a competitive advantage by increasing your market share and product offer. You can attract more customers than your competitors, giving you a head start. 🏃💨 

Disadvantages of a co-branding partnership

Unfortunately, co-branding comes with potential drawbacks that you must consider before starting. ⛅ 

• Loss of control over your brand image

First of all, you may lose some control over your brand. Collaborating with a partner means considering their preferences and desires. This shift can be challenging, especially if you're accustomed to being the primary decision-maker for your company.

• Potential disagreements

As in any partnership, disagreements can arise. These conflicts may concern operational decisions or the quality of the product being offered.

While you may need to compromise in certain areas to maintain harmony, it’s crucial to establish clear boundaries on aspects you won’t negotiate.

• Risks to brand image

In case of a problem, overexposure or improper use of your brand during a partnership campaign can put your image at risk.

The biggest mistake you can make is choosing the wrong partner, as a poorly executed co-branding strategy can confuse consumers and erode trust.

Even if you select the right partner, your brand's reputation becomes intertwined with theirs. Any controversies or misssteps on their part can have negative repercussions for your brand. 😬 

Your destinies become linked, often for a long time, even when tyour partner's mistakes are entirely unrelated to you. 🔗

• Risk of increased competition between partners

Co-branding partnerships can sometimes lead to increased competition between the involved brands after the agreement ends.

Fortunately, many of these issues can be avoided by exercising diligence when selecting your partner. 🎯 

How to benefit from co-branding?

The success of your co-branding project will depend on the strenght of your partner. It's essential to know what you are looking for in co-branding collaboration.

Here are 4 key points of compatibility to consider:

• Target audience and lifestyle

Your partner brand should appeal to customers who are similar to yours. In other words, both brands must be relevant to each other's audience. The more aligned the two companies are in terms of lifestyle, the better the fit.

Does your audience trust your potential partner? You must have a clear understanding of how your audience perceives the candidate brands.

• Competition level

If you are targeting the same customers and selling a similar lifestyle, you shouldn't be direct competitors offering the same products. 🙅

For a mutually benefit, consumers must be interested in both brands. Another tip to remember: your partnership should aim to reach a specific niche of untapped potential customers.

If you're just spending money and energy to target your current customers, the effort may not be worth it. Make sure the intersection of both brands creates a new market opportunity. 

• Brand values

The most important element of a successful brand partnership is in shared values. The ability to agree on what truly matters should be a sine qua non condition.

While you may need to lose some control over your brand in a partnership, this doesn't mean losing its essence.

Your customers won't accept compromises made solely to satisfy a commercial partner. That's why it's essential to have strong business values anchoring what you won't sacrifice for any benefit whatsoever.

• Brand size and culture

Studies have revealed that partnerships often fail when one partner is a large company in an influential business sector. This creates a power imbalance that favours the bigger brand. Choose a partner whose size is similar to yours. ⚖️ 

Additionally, studies reveal that partnerships from different countries face a higher risk of stagnation. Language and cultural barriers are often contributing factors. To mitigate this risk, ensure taht you have a strong foundation of shared values.

The best practices to maximize your co-branding success

To ensure the success of your co-branding campaign, here are some best practices to follow:

• Defining clear objectives

Both your brand and your co-branding campaign must have well-defined objectives.

For example, by using the SMART method, you can set quantifiable targets, such as increasing global sales by a specific amount or reaching a new customer segment.

Without clear objectives, it's impossible to evaluate the campaign's effectiveness.

• Establishing a strong partnership

In many co-branding partnerships, one partner may have more to offer than the other - whether due to greater brand popularity or a larger target audience.

However, if both companies remember that they are in a win-win relationship and fairly share their resources, the partnership can yield strong results.

• Creating an effective marketing strategy

Leveraging the resources of both companies (such as social media platforms or business websites) is essential to develop a strategy that highlights the strenghts of both brands and promotes the appeal of the new product.

Need to create a landing page for your co-branding campaign?

SiteW has got you covered! 🤗 With our web design tool, you can quickly and freely build a website to showcase your partnership. All you need is a mouse and an internet connexion! 🖱️✨ 

Create a web page

• Tracking performance

It's essential to monitor the performance of your campaign to ensure both companies achieve their objectives.

By analyzing data from the start, you can make neccesary adjustments to overcome initial challenges and stay within budget. 💶 

Types and examples of co-branding

There are many examples of co-branding. Let's explore some popular co-branded products to help you identify strategies that could work for your brand.

Product-based partnerships

In these partnerships, brands create a product that complements the individual identities of each company.

• Example: Nike and PlayStation

The co-branding partnership between Nike and PlayStation is a notable example. You've likely heard about the immense popularity of the recently released PS5. 👟🎮 

To capitalize on this excitement, PlayStation partnered with Nike to create special PS5-themes sneakers designed by Paul George.

These shoes were launchd in mid-2021, just 7 months after the release of the Playstation 5. The timing was perfect, boosting interest in this co-branded product among console fans and sneaker enthusiasts alike.

• Example: Coca-Cola and Lip Smackers

Lip Smackers, formerly known as Bonne Bell, began their co-branding partnership in 1975 through a collaboration with Dr. Pepper to create their first soda-flavoured lip balm. 🥤💄 

One of the most enduring co-branding partnerships, however, is with Coca-Cola - a partnership that continues to this day. Lip Smackers offers a wide range of lip balms inspired by the iconic soft drink, featuring flavors such as Coca-Cola, Cherry or Vanilla Coke, Sprite, Root Beer and Fanta.

This co-branding partnership is the favourite among Millennials from the 80's and has stood the test of time. As you can see, some brand partnerships are built to last. ⌛ 

• Example: Fabletics and Khloé Kardashian

In 2024, Fabletics teamed up with Khloé Kardashian to boost their Instagram following. The sportswear brand and the celebrity collaborated to design a stunning co-branded collection. 

⭐🏋🏻‍♂️

Digital partnerships based on content

Content-based partnerships are an excellent option for e-commerce brands. This type of collaboration involves an agreement between a brand and a digital publisher with a similar audience. Alternatively, two companies can partner to create content together.

• Example: GoPro and Red Bull

Although GoPro and Red Bull have collaborated on several projects, their enduring partnership is primarily content-driven.

Reb Bull sponsors many action sports events, while GoPro equips athletes with cameras to capture the action. 📹🐮

These two companies are a perfect example of brands that cater to similar lifestyles and complement each other perfectly without being direct competitors.

Partnerships with charitable associations

Even if co-branding with a charitable association always has significant sales advantages, this partnership should be started only if the association aligns on the brand values and give an impression of authenticity.

• Example: Ethic Drinks and Sea Sheperd

Ethic Drinks, a wine company focused on sustainability, partnered with Sea Shepherd to develop an innovative wine-aging method called vino submarino, aging wine at the bottom of the Mediterranean Sea. 🍷🐬

This initiative merges oenological innovation with marine conservation, showcasing how businesses can support environmental causes.

The partnership has helped raise awareness about ocean protection while offering a unique product to consumers.

It's your turn now! Create your own co-branding strategy

Now that you understand what co-branding is and how to craft a successful strategy, it's time to brainstorm potential partner brands that align with your vision and goals. 🚀