Stepping into the world of co-branding very well might be the riskiest and most lucrative marketing step you can take towards growing your business. Jumping into another company’s marketing circle with your own product can open doors and bring in more customers than a host of other strategies. However, your product’s success will likely be reliant on factors that you have little control over. Discover the pros and cons of complementary branding to learn if this may be a good strategy for you.
The ‘Pros’ of Complementary Branding
Financial and Intellectual Support
Big business will have the marketing power to put a product on the market that ‘hits the ground running’. With equity built up in other successful endeavors, they can foot any product they believe in! In addition, teaming up with an experienced, marketing-savvy company allows you to borrow expertise they’ve spent years curating. A fresh look at your product or business model may be the breath of fresh air you need to regain creativity.
Increase Brand Recognition
You’ve already spent time and money building a customer base – but so has your potential partner company. By pooling consumer spheres, you’ll both be reaching a wider audience, and even gaining new customers, depending on what product you come up with. This larger consumer influence will increase everyone’s revenue, too.
The ‘Cons’ of Complementary Branding
Control Will Shift
Rather than having full control over your brand’s product, you will now be sharing the responsibilities with another company. While this can be helpful as you try to manage other things as well, you may find that you are unable to shift the direction that the co-brand has taken. Always read through your contract with a lawyer to be sure you understand the full scope of the partnership.
Shared Negativity and Brand Dilution
When partnering with a large, well-known company, you’ll always run the risk of getting lost in the background. Like any company, your partner in co-branding is also susceptible to oppositional feedback and targeting by social media. By association, your brand may share in this negative feedback. Be prepared to mitigate any damages during your contract period, should they happen.
Complementary Branding Expert Sources and More Information
“The Pros and Cons of Co-Branding” – Steve McKee with BusinessWeek, 2010
Steve has contributed to the book Inside the Box’s “Ask the Experts” chapter (Section 4, Chapter 4) specifically on complementary day-part branding. He is also a contributing columnist who has written articles on co-branding.
There are a number of reasons companies embark on co-branding programs. To begin with, they’re a powerful way of introducing one company’s products and services to the loyalists of another. Perhaps the best example of this is the now-legendary “Intel Inside” campaign, which launched a brand that few consumers had ever heard of into the stratosphere by piggybacking on the equity of big computer makers such as IBM and Compaq. Within a year of the program’s launch, Intel was co-branding with some 300 computer manufacturers.
Co-branding also enables one brand to benefit from the “halo of affection” that belongs to another. That was the rationale behind Nike’s original 1984 alliance with Michael Jordan, and the effort has done wonders for both. Similar (if more mundane) is the co-branding Econo Lodge has done in its housekeeper-certification program with Mr. Clean in an effort to leverage the importance hotel guests place on tidiness.
Another benefit of co-branding is cost savings, something that can’t be overlooked during tough economic times. That’s one reason you increasingly see fast-food restaurants like Pizza Hut and Taco Bell sharing the same building—and sometimes the same counter, menu boards, and staff. In some cases, companies co-brand in order to charge a premium, such as Ford’s two-decade partnership with Eddie Bauer and its more recent creation of the “450 horsepower supercharged Ford F-150 Harley-Davidson Super Crew” with an MSRP of more than $42,000.
“Co-branding: A sweet business strategy?” – Kelly McCarthy and Samantha Von Hoene with Thompson Reuters, 2014
When brands merge, the results can propel a brand’s popularity and success to soaring new heights. But be careful—those same collaborations can sometimes leave a brand fighting to save a once-polished reputation from tarnish and disrepair.
In a typical co-branding deal, two or more companies come together and strategically merge some of their own products, services, designs, colors or logos to come up with a new marketable product or service. A successful pairing results in automatic credibility in the eyes of the consumer, increasing popularity and sales for both of the partnered brands.
If you’d like to learn more about the pros and cons of complementary branding, download my book from Audible or order it at Amazon. If you would like to discuss complementary branding further, please connect via the form here or by setting up a meeting on Advisory Board.