How to determine whether partnerships will help or hurt your brand
You’re the senior marketing manager for a national food company and much of your time is spent brainstorming ideas for getting your product in front of potential buyers. So you should be thrilled when you get a phone call from a 3-million-member national organization that wants to feature your product in its upcoming member catalog. Right?
Well, that depends. For instance, what if the organization is highly visible with controversial political leanings that might be offensive to many of your core customers? Maybe it’s the National Rifle Association or the International Tobacco Growers Association. While appearing in the catalog may yield wide exposure for your product, it could also damage your reputation among those who staunchly oppose the philosophies of the organization.
Although it takes years to build a strong brand, most marketers say that one misstep can tarnish that brand, so making the right decisions about which organizations to partner with is crucial. “We have to protect the brand,” says Mike Landry, Director of Special Markets for Tumi, a leading brand of luxury travel, business and lifestyle accessories. “The brand is what we sell; it’s who we are.”
The number one thing we do here is protect the brand,” echoes Terry Markwart, Director and Assistant General Manager for Special Markets and Consumer Imaging for Canon USA. “Sometimes your adrenaline gets flowing when you see a big opportunity and a lot of dollars, and you can easily jeopardize your principles – especially when the dollars are big. It’s always a good idea to take 24 hours and think about it before making a quick decision.”
While every firm is different, it’s not uncommon for marketing and branding departments to have a general list of the types of companies they want to avoid when developing partnerships. For instance, Movado Group, Inc., “will not participate in any consumer programs if they involve alcohol, tobacco or firearms,” says Joe Zanone, Senior Vice President of Special Markets for the company, which markets high-end wristwatches.
Sometimes, sticking to those guidelines can be difficult. For example, once “a major tobacco company selected one of our brands to be included in their point-based program, which included awards based on the UPC codes from cigarette packs,” Zanone says. “They sent a purchase order over via our local rep for more than $2 million. While the rep was extremely proud of the accomplishment, we had to decline participation as it would violate our company policy in selling to alcohol, tobacco and firearms-related companies for consumer promotions.”
While turning down a $2 million promotion may seem harsh, firm guidelines like those the Movado Group has aren’t uncommon. “Some companies have in their charter or mission that they won’t, for instance, partner with tobacco companies,” Markwart says. “Maybe the founder of the company died of lung cancer, so they wrote that into their charter.”
However, even for companies that have strictly defined guidelines for consumer events or programs, there’s sometimes more flexibility for internal corporate programs. “There are two different tracks that such marketing partnerships can take; one is non-consumer-oriented and the other is consumer-oriented,” Landry says. “The standards are different for each scenario; they’re much higher with consumer promotions, because that affects the brand. For instance, we might do a corporate sales gift with tobacco or liquor that we would never do with a consumer program.”
Fujifilm takes a similar approach. “Typically, Fjui wouldn’t partner with alcohol and tobacco companies on the retail promotion side,” says Joe Hafenscher, Vice President of Sales for Fujifilm Special Markets. “But as far as premium and incentive programs go, we have the approval to partner with such companies and have done so in the past.”
Similarly, Movado firmly restricts participation in consumer programs involving alcohol, tobacco or firearms, but the company “will, however, participate in internal employee-based programs for any company, understanding the need to motivate employees regardless of products manufactured, political affiliation and the like,” Zanone says.
In some cases, the partnering company may not present opposition to your brand’s ethics – it may simply be incompatible, with a different audience or connotation. For instance, Movado Group doesn’t sell any of its brands to Wal-Mart for retail distribution. However, the company does participate in the Wal-Mart Employee Safety program, Sales Achievement program and Service Award programs.
While an established set of guidelines can be helpful for companies that want to protect their brands and project certain values, it’s also beneficial to be flexible and to consider the pros and cons of each opportunity. “Sometimes, we have to say no if the company is very strictly against our policy,” Markwart says. “But you [also] have to try to understand what they’re trying to achieve. If it’s a gray area, you have to make a business decision about whether the tradeoffs are worth the payoff. We try not to put too many rules and regulations on it because that limits creativity. We try to make it work if we can.”
Recently, Canon made such a decision and chose to cooperate in a brand loyalty incentive program with Phillip Morris. “Tobacco companies aren’t ones that people usually want to attach themselves to,” Markwart says. “But we decided to do it because it was very lucrative, and if we didn’t do it someone else would. We were rather careful, though; everything went through legal. We were very careful about how our logo was used. In most cases we like to use our branding, but in some cases we want to tone it down and de-emphasize it. Our partners understand that. We’ve had times that we work with the customer to determine how we’ll be presented, and sometimes we put a disclaimer in saying that we’re not endorsing their product.”
Applying flexibility to questions of incentive partnerships means taking each decision as it comes. “We usually determine how to proceed on a case-by-case or situational basis,” Landry says. “Usually there’s a promotion agency involved, and it can be difficult to work through the details because there are a number of different constituents involved.”
When we’re approached by any company utilizing our products in consumer based programs, we review each on a case-by-case basis to make sure it follows our company philosophy,” says Movado’s Zanone. “An example of what we would consider is GWP in the purchase of an upscale automobile but not for a common everyday car sale. We’ve also been involved with realtors in motivating buyers in the $1 million home and up category.”
When faced with an opportunity to partner with a potentially questionable brand, experienced marketers offer several suggestions for how to make the right decision.
“Make sure that if you’re participating in consumer-based programs, they’re brand appropriate,” Zanone advises. “Most brands do supply their corporate sales teams with basic guidelines. If the brand has no guidelines, make sure that senior level management is aware of the program and have signed off on it prior to the program release. This ensures that any program has been tested by senior management and no one can come back to you or to the co-brand company if they’re surprised by such a program.”
“My advice is to tread very carefully when it comes to questionable allegiances,” says Landry. “The acid test we use is this: Has the consumer opted in for something, or is it a promotion going to all consumers? For instance, we might be open to partnering with an alcohol company if the people who will be reached by the program have opted in. A lot of alcohol companies are very adept at this; their programs are just reaching a specific audience that has requested communication from them. And that’s a fairly new development.”
Keep in mind that the best decisions aren’t made quickly, but should be discussed and considered at length. “The key is, when you begin talking about a program, the first thing to talk about it whether you want to create a business relationship with these people,” notes Markwart. “Do you want to put the logos together; is that something you can live with? It’s like dating; you try it out first. You don’t want to force a marriage. If it’s not the right fit, sometimes you can send them to someone else who is a good fit.”