In a slowing and uncertain European economy, consumer confidence is faltering while brands are simultaneously tightening their marketing budgets. With 2023 well underway, now is the time to focus on marketing strategies with improved ROI.
That’s where partnership marketing comes in. Allowing businesses to work with a broad range of partners on a cost-per-acquisition (CPA) basis—whereby commission is only paid to the partner when a pre-agreed action such as a sale or a lead is completed—partnership marketing ensures value for money in times of economic uncertainty, while still helping organisations broaden their potential audiences. It’s a viewpoint that’s rapidly picking up steam in the industry; according to a 2022 survey of UK advertisers, 68% of respondents think affiliate and partner marketing channels will be important in helping to deliver their marketing goals in light of the current cost of living crisis.
In this article, we’ll examine three reasons why partnership marketing makes sense for organisations looking to recession-proof their budgets.
Diversification of Partners
If there’s one thing marketers should avoid in uncertain times, it’s putting all their eggs in one basket. Partnership marketing allows companies to cast a wider net by working with partners across different channels to reach a broader range of target audiences. By diversifying their partner mix, organisations can experiment to discover and reach their consumers.
Reaching out to a broader base of customers doesn’t mean diluting a message or making it generic and applicable to all. Partnership marketing instead allows brands to diversify their tactics for different segments, delivering specific messaging that works to convert a given audience.
One type of partner that should not be underestimated is influencers. Indeed, the power of online influencers has been growing exponentially over the past few years, with the influencer marketing industry worth $15B at the end of 2022—having grown 42% the previous year.
Recently, influencer and affiliate marketing have converged, allowing brands to take advantage of the power of influencers while treating them like traditional partners. That means brands can leverage influencers’ deep relationships with their audiences to build improved connections with consumers—while still operating influencer campaigns on a performance-led basis.
Invest in the Customer Experience
Whatever marketing strategy a brand employs, consumers should be the focus. By investing in modernising the customer experience, brands can lower the barriers to purchase to help see them through the current period of low consumer confidence.
In most cases a website is the primary way customers interact with a brand, it’s vital to ensure that the time consumers spend on it is as frictionless as possible. Landing pages should be one area of active investment. Simply sending customers to a homepage from affiliate links is no longer good enough. Instead, businesses should think about the areas of the website that achieve the highest conversion rates for different audience segments and land customers there.
An efficient customer experience also aids reactivation campaigns. With customer loyalty decreasing as consumers increasingly focus on getting the best deals and purchasing more budget-friendly items, retailers should ensure that options to re-engage existing consumers are adequately showcased on their websites to attract and convert customers.
With more and more purchases happening on mobile, it’s doubly important to invest in the mobile experience, particularly among tech-savvy Gen Z audiences who expect highly personalised experiences.
A/B testing
If brands are not already being led by the data when it comes to their marketing efforts, this year might well mark the moment when failing to do so becomes an existential threat.
To keep up with changing customer behaviour caused by economic turbulence, brands must be flexible enough to meet customers where they are. A/B testing is essential to determine the most effective approaches, allowing brands to pivot their strategies as consumer needs and preferences evolve.
Now is the time for brands to experiment and test out things like loyalty rewards, cashback deals, and voucher campaigns to assess which have the best return. Of course, all approaches bring their own unique benefits. Loyalty rewards, for instance, are particularly promising in the current economic climate. Even in normal times, 79% of consumers want to see a discount to encourage a purchase—a percentage that will surely only increase in times of economic stress.
With partnership marketing, the risk of experimentation is reduced because around 90% of affiliate programmes feature a reversals or corrections feed whereby partners are not paid until the return period expires—allowing brands to reinvest the money into their budget if a customer returns an item. Indeed, Acceleration Partners processed $24 million worth of client returns in 2021, which those clients were able to then reinvest into the channel.
Resilience Through Partnership Marketing
Partnership marketing helps businesses reach a broader range of customer profiles, switching rapidly between messaging to test new approaches. While that experimentation may be a risk with other types of marketing, partnership marketing ensures you only ever pay for conversions and that you can reinvest the budget if a purchase doesn’t close. This flexibility and freedom to experiment has more and more brands investing in the channel—with almost half of UK advertisers and agencies planning to spend more on affiliate and partner marketing than other paid channels in the next 12 months.
With the ailing state of the European economy, the reflex for some marketers will be to hunker down and stay on their existing course. But such an approach fails to recognise the fundamental shift in consumer behaviour. Partnership marketing makes it faster and easier for brands to react and adapt to changing customer needs while minimising risk — helping to ensure marketing budgets are protected during trying financial times.
