Way to Co! How co-branding can open the door to new customers

It is common knowledge that gaining a new customer is tougher than retaining one, lesser known that it can cost anywhere between five and twenty-five times as much to do so (Gallo, 2014). In this blog I shall outline how co-branding can be the key to customer acquisition, alongside a few other benefits this strategy can unlock.


Co-branding is an arrangement whereby two different brands work together to create a product or service representative of both brands, in order to reduce new product costs and expose both companies to new markets (Stec, 2013). These sound like realistic benefits, however it is worth noting the article suggests no limitations, drawbacks or occasions where these benefits will not be realised. On the other hand, Monrabal suggests that you should consider not participating in this strategy if there is any perceived risk to your brands reputation (2016). See here for more risk-reducing factors to consider before using this strategy.


Co-branding was a general marketing strategy long before digital marketing, with noted success in 1975 when Bonne Belle and Dr. Pepper created a flavored lip balm that is still sold today. Using an academic perspective to back up a fairly basic reason why this strategy can work entails information integration theory. This theory suggests that people integrate information from a number of sources in order to make an overall judgment (Foster, 2014). Applying this to the previous example, Bonne Belle released the first successful flavored lip-balm two years prior to the co-branded product, whilst Dr. Pepper was a well-known soft drink brand – the brand loyalty and brand equity held were more than likely to convince customers of either to purchase the new product. Follow this link to see more successful co-branding examples.

Image credit: Sophie Bernazzini

You can employ a co-branding strategy for many purposes, the most notable including being to expand your customer base, reduce product development and investment costs and as a more basic benefit to simply increase revenue. It has had major success for franchised businesses in reducing investment costs, consider Subway and petrol stations fulfilling the needs of a long drive in one stop! Click on Kerry Pipes’ name for an article highlighting the benefits of co-branding for or with franchises.


In terms of expanding your customer base – the aim of this blog, co-branding of a complimentary nature is vital. It is likely customers of a similar product will have heard of yours and on top of this you can still benefit from the reputation and brand loyalty of the other brands product. One of the most successful examples of this is Nike+, the collaboration product between Nike and Apple based on a shared group of customers. Apple designed a chip to fit Nike+ shoes and monitor data that was linked to the users iPhone app, meeting the needs of runners who wanted to track their efforts. The app has over 18 million users and exemplifies the need for both parties to provide benefits to the other by engaging in this strategy.


The reasoning behind a need to continue to offer or provide mutual benefit is proven in the case of Shell and Lego. They had a partnership dating back from the 1960’s that split in 2014 after GreenPeace created a viral video, shaming Lego for selling Shell themed products at petrol stations whilst Shell planned to drill in the Arctic (Vaughan, 2014). The deal was thought to be worth £68m to Lego but the bad publicity from the video, which to date has over 8 million views, led to the split of the partnership and damaged brand equity for both companies. Click the picture below to see the video.



Other potential pitfalls to be wary of include: Diverging company values or missions, dilution of the brand, operational distractions and communication issues. All of these issues tend to develop over the long term, however any ventures should be properly evaluated before and during to ensure these outcomes do not occur, as any of these issues would be extremely detrimental to both brands. The other thing to mention is that despite perceived reduced costs as you are splitting them, there is no accounting for the time invested into the planning and the ongoing assessment of the partnerships value.




Image credit: Persona design


The image above illustrates just a few of the ways co-branding has successfully been undertaken. To ensure your customer acquisition strategy is successful, you must clarify the types of new customer you are after and partner with a company that gives you access either because they currently operate in that market, or because they can aid you in creating something to satisfy that market. The digital age has meant that any partnership can also benefit from social media and viral video hype, further spreading the reach as both partner’s followers will be able to view and share the content. With a recent study finding that content marketing generates 3x more leads than paid search – which has been touted as the best digital marketing strategy (Mccoy, 2017), the benefits are real.

To sum up, with the right mix of pre-planning, patience and sensible partner brand selection, co-branding can be a great customer acquisition strategy,  just promise yourself that you will invest the time necessary for its success!



Foster, C. (2014). The Application of Information Integration Theory to Standard Setting: Setting Cut Scores Using Cognitive Theory. Ph.D. University of Massachusetts.

Gallo, A. (2014). The Value of Keeping the Right Customers. [online] Harvard Business Review. Available at: https://hbr.org/2014/10/the-value-of-keeping-the-right-customers [Accessed 7 Jan. 2018].

McCoy, J. (2017). 9 Stats That Will Make You Want to Invest in Content Marketing. [online] Content Marketing Institute. Available at: http://contentmarketinginstitute.com/2017/10/stats-invest-content-marketing/ [Accessed 7 Jan. 2018].

Monrabal, J. (2016). When Should You Co-Brand?. [online] Adage.com. Available at: http://adage.com/article/guest-columnists/brand/304810/ [Accessed 7 Jan. 2018].

Stec, C. (2013). Co-Marketing Vs. Co-Branding: What’s the Difference?. [online] Impactbnd.com. Available at: https://www.impactbnd.com/co-marketing-vs-co-branding-whats-the-difference [Accessed 7 Jan. 2018].

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