You Are the Company You Keep

How to Form an Effective Brand Alliance

Since the days of Aesop, people have been evaluating others by the company they keep. Successful businesses certainly recognize this as they are notoriously choosy about which employees, investors, and advisers they associate with. But, what about the brand itself?

In a world where people are ever-more likely to see brands the way they see other people, Aesop’s maxim holds true. A brand is the company it keeps — and the other brands it chooses to align itself with publicly can cement or destroy its credibility to the world.

Strategic brand alliances have become more popular than ever, and they generate a 17 percent return on investment for the world’s top companies. Brand alliances can be an affordable way to accrue legitimacy, build brand equity, and reach new customers. They’re also fraught with risk: up to 90 percent of alliances fail, leaving disappointed customers and lost brand equity in their wake.

To Thy Own Self Be True

The key to forming a successful brand alliance is a thorough understanding of each brand’s story. A brand’s core “why” can be used as an effective litmus test to ensure any brand partnerships will enhance, rather than diminish, the brand.

Before a brand seeks to align with another brand, it needs to know who it is, and what it stands for. Armed with a solid understanding of the brand’s core purpose, and the nature of its customers, a company can avoid alliances with brands that express a different vision and speak to different heroes. Walmart, for example, knew their brand story of providing the widest possible amount of goods at the cheapest prices would prevent it from partnering with hip clothing brands, who have drastically different brand narratives and heroes. Instead, Walmart purchased stylish online clothing stores ModCloth and Bonobos, and decided to keep the trendy brands publicly distinct from the Walmart brand, in recognition that any overlap would alienate both customer bases.

A clear grasp of the brand story can endow companies with the kind of detailed strategic knowledge that empowers them to form brand partnerships with less obvious brands, as campaigns can be carefully designed to complement and accentuate each brand’s story. Decades ago, Dr Pepper and Bonne Bell formed an unexpected brand alliance to create a co-branded lip gloss. Iconic for teenagers everywhere, this lip gloss continues to be a smashing success because Dr Pepper and Bonne Belle both understood their brand stories, and how they could work together: even though they were in completely separate markets, both brands share a core sense of light-heartedness, play, and a sense of fun, and the co-branded lip gloss was designed to express those core values.

Failed Brand Alliances

Obviously, no brand alliance is entered with the expectation of failure. But even the smartest executives can be drawn to tactical opportunities over deeper strategic alignment when forging brand partnerships, and those types of superficial alliances are destined to fail.

If two companies are telling incongruent brand stories, customers will only be confused by attempts to blend them together. At best, it’s uninspiring. At worst, it is so inauthentic that it undermines the independent strength of each brand.

The same brand story, or customer base, is not mandatory to form a successful alliance, but any campaign must amplify complementary components of the brands’ individual stories.

KFC is well-known for their clever marketing department, and promotions that speak powerfully to their customers. It’s hard to understand what they were thinking when they formed a partnership with Susan G. Komen to raise money for the non-profit, with KFC promising to donate 50 cents for every pink bucket of chicken it sold.

This campaign sparked a swift public outcry as people criticized its hypocrisy. KFC has built a brand story around accessible, “finger-lickin’ good” decadence. Its products and attitude are the epitome of devil-may-care hedonism. Susan G. Komen’s mission is literally life and death: to discover new ways to prevent and recover from breast cancer. These two core purposes are tough to weave into one compelling story, and KFC’s disingenuous attempt to reconcile the stories — by saying there are healthier options on their menu, such as grilled chicken — rang hollow.

In the pursuit of a short-term revenue gain, both Susan G. Komen and KFC lost sight of who they were — a failure that cost them both in the eyes of their audience. A brand alliance can trip up even brands with the most well-honed story, like Tiffany & Co., if the story is not put at the center of the alliance.

Tiffany & Co.’s brand alliance with Swatch Group should have worked. In fact, the two companies were so confident in their partnership, they penned a 20-year deal. Yet after the Swatch Group created the co-branded watches, Tiffany refused to market them, and the partnership promptly dissolved into acrimonious lawsuits.

What went wrong? Tiffany’s story is one of classic and elegant luxury, delivered in a signature robins egg blue box. The watches designed by Swatch Group were neither. As one commentator explained, the “designs were unsuitable for a brand like Tiffany; a brand that has always aimed for timeless elegance over the passing trends of fashion …. the odd protuberances and black rubber of the Swatch/Tiffany watches … were watches you’d see at Macy’s, not at 727 5th Avenue.”

Swatch Group is known for their expertise in watch design and production, but they own many different brands, each with their own stories, from historical watchmaker Breguet, whose superbly crafted timepieces cost tens of thousands of dollars, to Swatch, a maker of mass market watches. Perhaps Tiffany assumed, because their brand story is so well-known, Swatch Group would design the co-branded watches to live up to Tiffany’s story. But the Swatch Group designers may not have fully understood the Tiffany story, or felt pressure not to produce a watch that would compete with their own high-end watch brands. In failing to place the brand story as the strategic core of their partnership, Tiffany ended up with an inventory of midmarket watches unsuitable for them to sell.

How to Get It Right

Too many bad partnerships begin with tactical thinking. Before leaping toward an apparently obvious cross-promotion or product synergy, companies must revisit their codified brand story. Ask first: which other companies share some of our core beliefs? And those of our customers? It is easier to engineer a product or campaign from shared purpose, then to force purpose onto a co-branded tchotchke.

The long-standing and legendary partnership between the Hershey’s and Betty Crocker brands illustrates this well. Both brands are defined by affordable and delicious indulgence, and have a wholesome, classic image that make their collaborative products — co-branded cake and cookie mixes, and co-branded frosting — popular with both companies’ customer bases.

Target has mastered the art of forming profitable partnerships with high-end fashion brands like Alexander McQueen, Zac Posen, Missoni, and Jean Paul Gaultier. Target has positioned their brand as the stylish big box store, promising “incredible style you can’t find anywhere else — and value that’s hard to believe.” This has earned Target the affectionate moniker “Tar-zhay” from their customers, who, for twenty years, have quickly bought out Target’s collaborations with high-end designers.

For the high-end designers, the collaborations with Target allows them to widely broadcast the core element of their brand — their particular fashion aesthetic — while reaching a new audience of customers. The limited-edition nature of each line’s production run also empowers the brands to maintain a sense of exclusivity that aligns with their brand stories.

Forming a brand partnership, especially one that is designed to last long-term, requires more than aligned external messaging. Brand stories aren’t the domain of marketing alone: internal culture is a crucial component of story, and vetting that is vital to an effective partnership.

Spotify, for example, has a partnership with Uber that allows passengers to control the music during their Uber trips through their Spotify account. This collaboration provides customers with an enjoyable and personalized experience that aligns with both companies’ brand stories. However, recent exposes have shown Uber’s internal culture wholly out of step with their own narrative, causing Spotify to subsequently struggle over whether to maintain the partnership,

Like any concern in an organization, partnerships are evolving. So while the story of both brands ought to remain consistent, management’s commitment to living them, or customers’ embrace of them, may change. Disney and McDonald’s, for example, enjoyed a long and fruitful partnership before Disney ultimately decided to stop including its toys in McDonald’s Happy Meals: customer perceptions of McDonald’s’ offerings changed, and came to contradict Disney’s wholesome, family-friendly brand. Although the partnership ended, it proved over the long-term to be a success for both companies — and ended in a way that allowed both brands to proactively remain true to their own stories.

Access to Coveted Markets

The prominent examples of brand alliances are often those of equals: large, publicly-traded companies working together to leverage their strengths for growth. But brand alliances can also work amongst brands of disparate power: partnerships between established players and startups provide the larger company with cachet and a sense of innovation, and the upstart access to a new, larger audience. This synergy is why corporate incubators are so popular. Success in these arrangements still hinge on story-driven self-awareness, but can have even more upside when they work well.

The streetwear brand Supreme has successfully co-branded with numerous partners in order to get their brand in front of new audiences. Supreme’s edgy and cool designs are aimed at trendy customers who embrace the urban subculture. Originally intended for a niche market of skaters, the clothes are designed to look stylish, and also be functional. Supreme’s designs are coveted by consumers and celebrities alike.

Supreme has partnered with brands as diverse as Louis Vuitton, North Face, and Nike to great acclaim. The collaboration with Louis Vuitton, for example, put Supreme in front of an audience who appreciates exclusivity and luxury, while the collaboration with North Face put Supreme in front of an affluent demographic that prefers functional yet well-crafted clothes. In each case, the larger company desired the “coolness” it had lost as trends evolved, and Supreme recognized there were a significant number of potential customers in both Louis Vuitton’s and North Face’s fanbases. By creating a product distinctive to each audience’s tastes yet still reflective of Supreme’s core style, they delivered the ideal of an effective brand partnership: real growth that amplifies the distinct story of each brand.

Partnering for Growth

Before committing to a brand alliance, whether it be for a one-off promotion or to create a co-branded product, companies should understand their brand story, and use it as a litmus test for the potential partner, and the campaign. Brands who successfully express their unique brand stories through collaborations can reach new audiences, and build valuable brand equity, often at a much lower cost than they would be able to flying solo. Done right, story-driven brand alliances are a surefire path to more customers, and sustained growth.

Kelly Sarabyn is a manager at Woden. Whatever your storytelling needs may be, Woden can help. Download our extensive guide on how to craft your organization’s narrative, or send us an email at connect@wodenworks.com to discuss how we can help tell your story.

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Woden helps brands develop a clear, compelling strategic story — and align all they do behind that message.