New Study Reveals How Partnerships Help Retailers Grow 2X Faster
What’s the next disruptor for retail, the one thing that will make the big difference in engaging new customers? Recently, retailers tested new ways to shake up their business model by offering subscription-based services or on-demand experiences personalized for the consumer based on their needs. That’s been good. However, what’s driving nearly 30 percent of revenue that no one’s talking about? You’ll probably be surprised that it's partnerships. In fact, independent research backs it up and suggests that the partnership channel is vital to future revenue growth.
A recent Forrester study commissioned by Impact, Invest in Partnerships to Drive Growth and Competitive Advantage, surveyed more than 450 companies worldwide on how they're using partnerships within their organizations, and how partnership strategies affect their overall revenue and business growth. The companies that were surveyed largely agreed that their partnership programs were a strategic differentiator and advantage over their competition. They also found that partnership programs were critical to their organization's financial success.
These statements aren't just wishful thinking. Forrester found hard numbers that correlate. For example:
- Companies with the most mature — or successful — programs generated double the share of revenue from their partnership channel, growing twice as fast as other companies, and were five times more likely to exceed stakeholder expectations and other key business metrics.
- Nearly 80 percent of mature programs exceeded revenue metrics, whereas only just over 25 percent of less mature programs did the same.
- Mature programs exceeded bottom line profitability more than triple those of less mature programs.
- More than two-thirds of mature programs exceeded market valuation in stock price as opposed to only 23 percent of less mature programs.
So, what's driving this message for retailers? The shift in consumer behavior, and how previously relied upon growth channels are starting to plateau. Research shows that customers no longer trust advertising or salespeople. Enterprises are turning to their partners, which have a trusted relationship with the consumers they're targeting.
For instance, with the advent of social media, businesses are exploring partnerships with Instagram influencers, using their profile and established networks to promote a new product and encourage purchasing in a seemingly organic way. Other partnerships include strategic B-to-B partners, app-to-app, premium publishers, native software integrations, affiliates, and more. It’s a new way for brands to connect the dots between one consumer experience to another, reaching an existing consumer base that already trusts a brand, and as a result, is willing to buy.
The study also explored what makes up a successful partnership program, and what makes it “mature.” The four key characteristics include:
- the right people to guide the program;
- a proper process in place to manage different types of partner relationships;
- innovative technology to set up and handle the program, as well as optimize and scale campaigns; and
In today’s digital ecosystem, it’s not surprising that technology is a key part of a mature program, and that 62 percent of companies surveyed believe that the right technology is critical to the success of a partnership. Tracking and attributing campaign outcomes to the appropriate partner that yielded the result — whether it be a like on Instagram, app download, or product purchase — is one of the first steps to maintain and grow the partnership channel to reach your disruptor-level growth goals.
To read the full study, download it here.
Mike Head is general manager, partnership cloud at Impact, the global leader in partnership automation and catalyst for the new partnership economy.