From McDonalds x BTS to Nike x Jacquemus, co-branding is taking the marketing world by storm. Alongside hype tactics like product drops, a co-branding strategy can help break through the noise in a distracted world. Read on to understand the co-branding basics you need to get started with your own brand collaborations.
Co-branding is all about synergy! Synergy in the technical sense, that is: a collaboration that produces an effect that is greater than the sum of its parts. In the case of co-branding, synergy refers to two (or more!) unique brands collaborating to create a product that captures their combined brand identity and produces something new.
Co-branding vs. co-marketing
Co-branding and co-marketing are closely related. However, co-marketing refers to a communications strategy, while co-branding refers to the conceptualization phase of product development. In most cases, co-branded products are then co-marketed! However, co-marketing can be done whether or not you’ve created a co-branded product with your brand partner.
Co-branding is all around you! Brands in the food, fashion, and home space are particularly known for their clever (and sometimes outlandish) collaborations. A few examples include the Subaru Outback LL.Bean Edition, Grateful Dead Crocs, IKEA’s Virgil Abloh collection, Jason Wu for Target, and Limited Edition Lady Gaga Oreos.
How a co-branding strategy can grow your business
Co-branding is a great tool for reaching new audiences and creating organic hype that contributes to customer retention. With the right brand partner, a co-branded product can introduce your brand to a new group of likely purchasers. At the same time, a co-branded product creates novelty and organic excitement that re-engages past customers and increases customer lifetime value.
How to get started with a co-branding strategy
Any co-branding collaboration begins with a conversation with your brand partner of choice. However, there are a few factors to consider when you’re evaluating potential partners:
What are my goals with this collaboration?
Your marketing goals will inform the execution of your co-branding strategy. Looking to grow brand awareness? You may want to consider partnering with a celebrity or brand with a significant new audience. Looking to cultivate a high-end brand perception? Your brand partner with a luxurious reputation. Keep in mind that some goals (i.e. brand awareness) may be harder to measure than others (i.e. conversion rate).
What demographic and psychographic traits characterize my ideal audience?
With your marketing goals in mind, you should evaluate potential partners with an eye to their audience. Ask yourself whether you’d like to pursue an audience that is similar or different from your existing audience. You can also dial in on specific traits: demographics refer to statistical data (like age, race, gender); while psychographics refer to attitudes, aspirations, and other psychological traits.
How much risk am I willing to take with my brand?
Perhaps the most important question to ask yourself before pursuing a co-branding project is how much you are willing to step outside your brand’s comfort zone. There are trade-offs: a splashy and surprising co-branding campaign can make for a viral moment, and there is the old adage that ‘all press is good press.’ However, the risk is in alienating your existing audience and failing to connect with your intended new audience.
Ready to find the right brand partners for your co-branding strategy? Canal helps you discover the brands and products your audience will love. Once you’re ready to sell, Canal connects your store with your partner’s so you can manage orders, commissions, and shipping without extra manual lift. Learn more.