By Cristy Ebert Garcia, CMO at impact.com
Marketing is harder than it’s ever been.
Today’s marketers are faced with dwindling budgets, while having to innovate constantly and drive ROI, with ever-more stringent data privacy regulations, and a massively fragmented media and channel landscape. There’s also pressure to acquire customers, which today is also harder than ever – in fact, where merchants spent $9 to acquire a new customer on average in 2013, today, this cost has significantly increased to a whopping $29. Simply put, marketers must prioritize cost savings, and efficiency, and improve the customer experience in order to succeed. There is a channel that can help: partnerships. Partnerships encompass any partners who refer and recommend your customers – including affiliates, creators, other brands, and even your own customers. The hard truth is people don’t want to hear businesses talk about their brand. They want unfiltered opinions from third parties they implicitly trust. So they’re turning to review sites, their communities, influencers, and their favorite publishers before making a purchase. That’s why partnerships are so crucial for new customer acquisition.
We recently interviewed customers, prospects, and other contacts at U.S. enterprise companies, at the CMO, VP, and Head of Marketing level, to find out why modern-day marketing is so hard, and what can be done to alleviate some of the pain points.
We heard from today’s senior marketing leaders, who told us about their overall marketing budgets in 2023, and what the prospects look like for their upcoming ad spend. The results were sobering: 46% of respondents said their marketing budget had decreased, with 35% saying it had stayed the same, even in times of high inflation. Only 19% said it had increased.
Not one marketing leader said their spending would increase over the next six months, with 61% saying it would stay the same, and the remaining 39% saying they expected it to fall.
In our conversations with customers and prospects, two key priorities emerge: to increase leads and sales, and to grow marketing’s revenue contribution to the business. But it is also clear, from our survey of marketers and our wider discussions, that marketing leaders face a number of challenges in achieving these goals, with the vast majority citing limited budget and limited resources as the key obstacles to growth.
So marketers are being asked to do more with less, which is a challenge at any time, but particularly so given macroeconomic and geo-political challenges.
Those who are familiar with mature partnership programs know that they can help in this respect, but it’s also clear that the value of partnerships is not as widely appreciated as it might be. Around half the marketing leaders we spoke to said they did not have any kind of affiliate or partnership program in place. Among those that did, most were using in-house resources or an affiliate network. The types of partnerships in place were predominantly with media publishers, affiliates, and influencers.
Partnership program capabilities
Partnerships enable brands to tackle some of the challenges of marketing in the modern era, where traditional advertising is expensive, hard to track, and goes largely ignored by consumers. Partnerships enable them to tap into authentic communities of influencers and creators whom consumers already look to for honest, unbiased product recommendations and advice.
Their ability to personally connect with consumers and create engaging and trusted content makes them valuable partners in modern marketing. They bring a fresh, new, authentic, perspective that differentiates the brand partner from their competition.
And they dominate social media – top platforms like Instagram, TikTok, and YouTube are integral to consumers’ lives, and the number one place for brands to engage. Collaborating with creators and influencers allows brands to explore and invest in innovative and non-traditional ways of messaging, promoting, and selling their products and services.
When we asked the marketing leaders what partnership program capabilities would need to be in place for them to start using one, two responses dominated: tracking and reporting for performance insights; and finding partners that align with their brand. These are both factors that an established partnership management platform like impact.com can handle comfortably, as well as provide a platform that allows you to create, manage, and scale all your partnerships in one place.
Another knowledge gap we identified was around the areas where a partnership program can add value to a business. Brands that have positioned partnerships at the heart of their marketing effort are typically well-versed in their many capabilities, but when we told prospects that a well-run partnership program, running on an established platform, could help increase team efficiencies and decrease manual workload, many of our marketing leaders were surprised.
They were likewise intrigued when we explained how a good partnership program can optimize customer experience and incentivize customer loyalty, help with brand expansion and grow business revenues.
These capabilities, however, come as no surprise to us, or to the thousands of brands we work with – including Microsoft, Walmart, HSBC, Adidas, Levi’s, and Uber – for whom we put in place and support partnership programs that tick not just these, but many other boxes too.
When brands commit to partnerships, the numbers speak for themselves: Sephora experienced a 101% increase in partner growth and 3x revenue growth after partnering with impact.com, while in just one year Solo Stove saw a 72% increase in revenue with a 7% decrease in ad spend, and vintage clothing brand Homage achieved 485% ROI.
Yes, marketing is hard, there’s no denying that. But in the face of the many challenges faced by marketing leaders, a partnership program can help, as the numbers above clearly demonstrate. The market has shifted, and successful brands know they need to engage with consumers on their terms, in the places where they are. This is what the Partnership Economy is all about. Get the ball rolling today and you’ll wonder how you ever managed without it.