There’s an old adage, “if you want to go fast, go alone. If you want to go far, go together”.
There should be no doubt in the minds of any business leader that going far is considerably more important than a hard and fast surge in popularity only to burn out after a matter of months.
And with the World Trade Organisation citing that 75% of world trade flows indirectly – namely not through direct selling but through channels, partnerships and alliances – it is little surprise that, today, partnerships are an increasingly significant driver of enterprise growth for Direct To Consumer (DTC) brands.
Partner to grow
In August, Impact commissioned a study by Forrester Consulting that would explore the success of high-maturity companies in the partnership process. High maturity partnership programmes are defined as those that cover a wide breadth of partnership types and take a coordinated/de-siloed approach to their partnerships, standardising how they manage all types of partnerships through a unified lifecycle that runs with automation technology. This in turn lets them scale their programme and accelerate its growth.
The result report showed that 29% of DTC decision makers estimate a 20% or greater year-on-year revenue growth rate for 2019 from their partnership channel sales, proving that partnerships remain a significant revenue generator.
The full findings of this study on partnerships in mature companies led us to create a set of actionable next steps for optimisation, fully tailored to the maturity level of the individual programme, with the aim of giving other DTC business leaders the opportunity to enjoy a similar level of long term success.
It takes seven steps
Here at Impact we identified seven phases within a partnership lifecycle, with each phase having different goals and objectives depending on the maturity of the programme. The seven phases were defined as: Planning, Discovery and Recruitment, Contracting and Payouts, Tracking, Engaging, Protecting and Monitoring, and Optimisation.
Within the phases, the study recommends a different approach for high- versus low-maturity programmes. Low maturity programmes are often new programmes, with a siloed approach and limited automation capabilities.
Leaders at the most mature companies seek out partnerships that most closely connect with their target audience and align with their messaging and values. Less mature companies rely on trial and error, but learn from their failures and fail “fast and cheap”.
But for programmes of all maturities there are some insights that are true across all phases. Firstly, planning is challenging across the board, second only to the Discovery and Recruitment phase for high maturity companies and behind the Optimisation phase for low maturity companies.
Go far, go together
Secondly, remember that the maturity of an organisation makes a difference in revenue: a quarter of high maturity companies get 25% or more of their overall company revenue from partnerships, in contrast to only 14% of low maturity companies.
Finally, one universal truth is that programmes mature as the type of partners are diversified and the scope of the programme scales: low maturity firms have often been reliant on traditional affiliates, while average maturity firms have partnered with a wider variety of partners types.
Partnerships can drive critical benefits, whether its increasing revenue, driving brand awareness or the all important customer retention. They can also drive customer influence early in the buying journey. To propel revenue growth, companies must choose their partners carefully, based on predetermined business outcomes and their target audience.
Low-maturity companies may look at their higher-maturity rivals with envy but, if they follow advice such as the findings from our work with Forrester, there is no reason they shouldn’t find themselves enjoying similar levels of effectiveness and efficiency from their own partnerships in a relatively short period of time. After all, “if you want to go far, go together”.
Owen Hancock is Marketing Director – EMEA at Impact.