The world of partner marketing and partnership management has changed markedly. Until recently, partnerships were the responsibility of strategy teams and business development professionals. Deals took time and resources from several business functions (legal, finance, etc.,) but were managed by a single team and approved at the executive level.
Forming Partnerships Has Become Easier
Now, access to engineering resources to integrate with APIs is all that is needed to create a partnership. Technology is pushing decision-making downward and outward, enabling functional leaders to make their own decisions. Barriers to new partnerships have fallen.
For Some Organizations, Management of Partnerships Needs Work
As these partnerships proliferate, however, they can be more difficult to track, report on, and evaluate unless an organizations is aware of and has deployed technology to simplify and streamline the process.
In many organizations, administrative teams track, pay and invoice tens or hundreds of partners. Google docs, Excel spreadsheets and an over-extended finance team are often the only partnership management “tools” in use -- which makes the key tasks time-consuming, frustrating and error-prone.
But it doesn’t need to be this way. With the right tools and organizational structure, marketers can create bigger and more strategic partnerships. They can deploy teams and processes that automate and simplify partnering, and capture more of the potential revenue from this channel.
Our Transformational Partnerships NYC Event
To help leading marketers address these issues, Performance Horizon hosted our first US event dedicated to "Transformational Partnerships." Over dinner in Manhattan, thirty marketing, business development and strategy executives from merchants, agencies, publishers and technology companies discussed the opportunities and the hurdles to developing strategic partnerships.
I thought I’d take a few moments to summarize three salient observations, hurdles and opportunities surfaced at the event.
Our gathering focused on a variety of market observations, of which these three were the most discussed:
- There is a massive amount of organizational data that could tell us which partners are valuable (and why). Organizations have ample data available to help them identify compelling partnerships, provided they invest in the process.
- Tools to analyze this data and take action are emerging, and organizations that wish to capitalize on the partnership opportunity need to leverage them.
- Marketers recognize that global partnerships -- and particularly “transformational partnerships,” are beginning to emerge as powerful business drivers, and growing quickly.
The gathering spent time focusing on three key challenges that organizations need to address in order to create maximum business opportunity from the partner sector:
- Organizational clarity for decision-making: Many organizations do not yet have an individual or team assigned specifically to identify, optimize and scale revenue driving partnerships. There are business development teams and affiliate marketing managers at two ends of the spectrum. By uniting these teams, companies can get both the strategic and executional expertise they need to make the most of the opportunity.
- Taxes and FX limit global growth opportunities, as do the logistics of managing commissions and payments. Companies need tools that can radically streamline those tasks.
- Many organizations need to avail themselves of technologies to address specific pain points: Key functions that are sometimes lacking in current tech stacks:
- Ability to analyze and react to partnerships on a granular level (SKU level data)
- Ability to integrate adtech systems (affiliate systems should integrate with ecommerce systems)
- Ability to seamlessly pay on a global level in any relevant currency.
The challenges were best summed up by Scott Pollack, VP of Business Development at WeWork. Scott noted that "Whether you have a handful of strategic partners or a large partner ecosystem, tracking the value provided to you and your partners is difficult, but critical. Unless you can get a clear read on the ROI of a partnership, the unfortunate assumption will be that it's a waste of resources."
While our leadership gathering recognized the challenges that impede rapid development, they also underscored the remarkable business opportunities available from the partnership arena. These included:
- Transformational Partnerships: the ability to drive significant revenue and extend the value of your brand through a select strategic partners is growing. Marketers can optimize brand partnerships by using data that identifies appropriate products for the appropriate partners, and tools to strategically and automatically compensate these partners.
Because these things can be much easier to understand with an example, consider this scenario: A luxury carmaker wants to reach and persuade high net worth individuals to test drive and purchase their new vehicle. They partner with a leading bank to connect with their Private Banking clients. By leveraging a trusted partner to deliver their brand message, they gain entree into an exclusive audience with minimal clutter and strong credibility.
- Global Opportunities: With the ability to commission and pay direct deposit within 24 hours in any local currency, combined with strategic global partnerships, the power of this dynamic channel can expand brand and offer reach beyond its traditional brand and market borders.
- Cost Reductions: Process advancements and automation can serve to unlock this channel for many organizations that are not yet “all-in” on partnerships. Focusing on strategic partners and using API-based tech to commission and pay eliminates the need to manually track and pay a large number of partners, scales relationships, and focuses organizational energy on projects that matter.
What about you? Are you looking for ways to expand the partner channel for your company. Let us know. Performance Horizon is hosting a series of events with partnership professionals and we would love to hear from you.