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Why co-branding partnerships are encouraged by product consumers—and reasons to beware

by | Sep 16, 2021 | Public Relations

For a variety of reasons. consumers are attracted to co-branding initiatives within brand partnerships. For example, people are excited about having new product options, and some are attracted to these brand partnerships because the new products solve unique problems and add value, according to new research from Visual Objects, a visual guide to finding and hiring the best creative firms.

Brands partner and share risk to widen their audiences, solidify consumer trust, and generate more sales. Audience interest in brand partnerships strongly encourages co-branding opportunities for consumer-driven businesses. But it’s important that companies align on core values to avoid the consequences of associating themselves with bad reputations.

Why co-branding partnerships are encouraged by product consumers—and reasons to beware

Negative brand reputations damage partnerships

While consumers generally support businesses that team up, a negative reputation can destroy a healthy brand partnership. Sixty-one percent of U.S. consumers will avoid buying from brands with negative reputations.

Even if one company maintains a positive reputation, a partner’s negative reputation can damage them. Failing to align on core values and target audiences could hurt the reputations of all members of a co-branding effort.

Why co-branding partnerships are encouraged by product consumers—and reasons to beware

Terri Rockovich, co-founder and CEO of kibble brand Jinx, recommends being discerning in the early stages of choosing a brand partner to select a complementary team. “The best collaborations are those that truly bring value to both sides, elevating the values of the other and complementing each other’s offerings with something unique that is created through the partnership,” said Rockovich, in a news release.

Why co-branding partnerships are encouraged by product consumers—and reasons to beware

Rockovich added that entering a co-branding partnership “inextricably links” brands together. This can be powerful—but also comes with potential pitfalls.

Loyal customers remain most important

When setting up a brand partnership, companies should aim to appeal to loyal customers just as much, if not more, than new customers. The research found that 43 percent of consumers would try a co-branded product from a company they already liked.

Why co-branding partnerships are encouraged by product consumers—and reasons to beware

Additional research shows that increasing customer retention rates by 5 percent can increase profits by up to 95 percent.

John Li, co-founder and CTO of loan provider Fig Loans, finds that co-branding is an ideal way to reengage loyal customers through new products. “Co-branding can help loyal customers venture out and try new products,” said Li, in the release. “If they already have trust and loyalty with you, they’re more likely to trust your recommendations.”

Read the full report here.

Visual Objects surveyed 501 consumers in the U.S. about how they respond to brand partnerships and co-branding.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter

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