Co-branding is a kind of marketing arrangement with a win-win situation in which two different brands join forces to offer or create a product or service that leverages both the brands. Co-branding thus springs up quite a few opportunities where one brand can introduce itself to the devotees and followers of the other brand. Co-branding is different from co-marketing. In co-marketing, two like-minded brands join forces and a hybrid product is not created. In co-branding, a hybrid product is created. Co-branding is great to save your marketing costs.
Split the expenses
It is imperative to remember that marketing a new product or service is an expensive proposition. It takes a lot more than monumental marketing efforts. Co-branding allows you split the expenses with your partner. Expenses may not be split in 1:1 ratio but in all likelihood, one brand doesn’t shoulder the entire cost.
Customer Retention and Acquisition Costs
According to the marketing analytics firm KISSmetrics, customer acquisition costs are seven times higher than customer retention costs. Customer acquisition costs include lead generation costs, conversion rate costs etc. Any cost incurred to gain the attention of intended customers comes under the ambit of customer acquisition. All such customer acquisition costs can be cut down as customers of both brands will be inclined to look at a hybrid product that has credibility of both the brands.
Customer goodwill is an intangible asset. Co-branding results in improved customer goodwill towards the hybrid product. This in turn results in improved conversion rates. Thus, customer conversion costs can be minimized.
Whenever a new product is released, it garners all the necessary hype. Imagine the scenario in which two different brands promote the same hybrid product on their social media platforms. The hype generated will be simply awesome. Co-branding improves collaboration between the two brands and lays the luminous path to glory.
It can thus be concluded that co-branding is great to save your marketing costs. Should you have any concerns about co-branding, drop a comment or two in the comments section. We would love to hear from you.