Brand Affinity Marketing – What is the secret to effective brand partnerships?

Whether it's having things in common or opposites attracting, brand affinity marketing, sometime called 'brand dating', is becoming more and more popular between businesses of all shapes and sizes, with mutually beneficial results.

A dress show is hardly the most obvious occasion to market the mechanisms of vacuum cleaners. That is precisely why Twentyfirst Century Communications, a division of AIM-quoted marketing services provider NWD, hit on the idea of linking a new range of dresses, designed by students for a fashion schools competition at London’s Science Museum, with the suctions systems of the latest cleaners from Korean-based conglomerate LG.

Supermodel Erin O’Connor wore the winning item, which hoovered up the prizes, and a hitherto dreary-seeming corporate colossus from windy East Asia gained a whole new audience. Stephen Stroud, chief executive of NWD, describes this unusual juxtaposition as ‘thinking outside the square’.

Linking two such incongruous items in the mind of the trade and the public in this way is one instance of ‘brand affinity marketing’. This is a growing activity, known in some manifestations as ‘brand dating’, and can offer aspiring young companies a route to exposure on a wider stage.

Brand affinity marketing is one way for a new and growing business to associate itself with a well-known and accepted brand and stimulate its own development in the process; ‘leveraging its brand’ in the jargon of the trade. It also provides the more established party an opportunity to ‘rejuvenate’ its brand image and reach elusive markets.

‘Consumers speak the language of brands,’ argues Simon Seward, chief executive of Touchdown Brand Affinity Marketing, who has forged such partnerships as BT Broadband with Yahoo internet group, American Airlines with Blockbuster DVD and Video, and MasterCard with Hertz car hire. ‘You combine two brands to gain access to new markets and this way you can obtain a good enhancement of your own brand for comparatively little investment.’

Another partnership stimulated by Touchdown, this time between companies of very different size and perception, is between surfboard equipment and sportswear supplier O’Neill and the Phillips electronic giant. The result has been a snowboarding jacket produced by O’Neill with keypads on the sleeves, and earphones for listening.

Seward says the ideal is for the partnering brands to complement each other, not only in terms of their underlying products and services but with their brand images too. Thus, he contends, BT was ‘reliable but dull’ and Yahoo was ‘young’ and ‘exciting’, while both were seen as embodying ‘quality and expertise’.

Such branding partnerships need not be between two large and well-known brands of equal weight and, indeed, it is probably better for long-term future prospects if they are not. Ian Lancaster, head of marketing services specialist Twenty, who previously forged several such deals at Virgin Cars, explains, ‘a big company whose business depends on heavy internet use looks at its website and says, “we have 50,000 unique users, what else can we sell them [through what are called ‘clickthrough relationships’] in a way which does not hit any other part of our business?”’

The answer, he suggests, could often present itself in the form of ‘a small company with an innovative product or service that is unable to spend money promoting and boosting it. The big group may see this as providing a new growth area for its own business and be willing to make a deal.’

Virgin Cars partnered such obvious candidates as insurance companies, car hire firms and vehicle maintenance companies. ‘Two brands add value to the customer and don’t compete with each other,’ he emphasises, citing travel companies and travel insurers as other natural partners.

Making the right choice

‘Most brands are partnering these days,’ comments Seward, ‘but you need to get it right.’ If the right brand links can be worth their weight in gold, so ‘the wrong ones can be fatal,’ he warns. It is customers’ appreciation of brands that matters and everyone in the business accepts that, just as customers’ brand awareness and sophistication have grown, so their brand loyalty has diminished.

The importance of getting this right has generated a whole new family of analytical tools with portentous, impressive-sounding names. Seward has thought and worked hard with Touchdown’s boss and founder Gavan Stewart since they were both on the marketing side of Elf oil 11 years ago, on how to devise an approach to brands based on something more than instinct and experience.

These efforts have spawned a virtual science of brand affinity and a methodology rejoicing in the name of ‘brand symbiotics’. This ‘discipline’ involves an analysis of ‘brand DNAs’ and ‘brand psychologies’ to identify sympathies, differences and the prospects for a mutual rapport, and all hinge on profiles and understanding of customers’ attitudes.

The point is, as Seward puts it, that, while their perceptions and, in some cases, their brand preferences may change, their own values do not. Therefore, it becomes important to classify and, if possible, segment, the world of brands.

When a customer comes to Touchdown to build one or more brand partnerships, the first step, says Seward, is to ‘establish its own brand DNA’, with reference to its ‘uniqueness’ profile and the data behind it, to see what rapport it is likely to have with which other brands. The next task is to profile the brand within the categories defined by brand theory guru Maslov.

Maslov identified three basic types of brand: sustenance-driven, focused on customers’ needs for food and shelter; inner-directed, focused on the customer and his or her family, educational provision and holiday plans; and outer-directed, focused on the customer’s wish to impress the world with flash cars, penthouses and other trappings. (Common sense might suggest these differences between brands targeting basic needs, moderate aspirations and the conspicuous show of wealth and status, but clearly it has taken Maslov to codify them.)

These are anyway only the most basic groupings. Touchdown has compiled ‘Brand Mine’, a database of 350 brands with their individual profiles, in which the company has broken down Maslov’s broad definitions into 72 ‘value modes’.

Armed with these tools, Seward’s experts sieve partner-seeking brands through an ‘affinity filter’ to draw a usable ‘pen portrait’ of the brand. And after all this, latest developments with the client can still sway the choice of an appropriate brand partner.

Thus, says Seward, ‘Sony and BMW may look like a good brand fit, but Sony and Skoda might not look such a good idea. However, Skoda may then independently decide to use Sony in a way which happens to fit in with one of Sony’s new product drives.’

The whole process leads to a final presentation, with the likely parties identified. ‘You need clarity behind the fit,’ insists Seward.

What brands are worth

When considering brands for partnering it is often far from easy to put a value on them and their potential, whether in terms of direct revenue and profits generated by a range of products, or of the platform for new activities created by the images they convey. When the French Taittinger champagne family recently put their business up for sale for around £1.5 billion, the image of a famous champagne brand had clearly added value to the brands of its other interests, from perfume and crystal to budget hotels.

Not so long ago, the Fallic brothers of Florida bought haute couture house Lacroix to bolt on to their US duty-free stores group. A Saudi concern, W Holdings, has bought 80 per cent of a Mayfair-based luxury clothing chain from entrepreneur Richard Caring to speed up the establishment of an ‘iconic brand’ in Britain and elsewhere.

A good brand can make a business, but it still remains an intangible concept and, unless the brand owner sells his or her business, it can be difficult to establish or recognise its worth. Esther Carder of accountant Willot Kingston Smith says present accounting conventions do not recognise the value of brands in a company’s balance sheet — even though, for example, food and drinks giant Diageo claims it owns an array of brands together worth at least £4 billion.

Unless brands (as distinct from goods and services bearing a brand label) are traded often enough to have a ‘readily ascertainable value’, they can only be recognised when the company owning them is bought by another. Then they feature as ‘goodwill’, the difference between the stated value of a company’s assets and the amount paid (assuming it is greater).

As Carder puts it, ‘Coca Cola has no value for its main brand, but if it buys Smirnoff, that will contribute measured brand value.’ If the company is bought and its brands are given a value, the convention is to give them no more than a 20-year life, though some brands last for much longer.

That is the present, possibly frustrating, position, though there are pressures to change it. Some chinks in the wall do now exist, in that, if a company can confidently state future cash flow from a brand, the potential cost of licensing an equivalent one or the cost of building one, some valuation is acceptable.

But this is a long way from a generally accepted means of valuing brands companies have created, unless they are bought. Carder complains, ‘we work with a marketing services company and we would love to value its brands, but that is not likely just yet.’

Holding brands together

Ideally, a brand partnership that works should last forever or, at least, for as long as the goods and services and customers to which it applies are still in the market. Says Lancaster at Twenty, ‘they go on in perpetuity as long as they are viable.’

But, he adds, ‘managing them takes time and you have to be very clear that they work and can deliver value’. Moreover, ‘there is a distinct risk to your brand if you find you have chosen the wrong partner or, if you get let down later.’

It is obviously crucial that each party builds in some protection in any brand-partnering agreement against actions by the other party, which could devalue the partnership. (They are unlikely to be able to take out the ‘death or disgrace’ insurance policies which commercial sponsors of sports players or pop stars sometimes buy to compensate for potential loss of sponsorship value.)

Seward puts a shorter life on the type of brand partnership that Touchdown has brokered, citing as a mark of durability that many MasterCard relationships last for more than three years. He is firm on the importance of ‘starting with a clear idea of what you can offer and what your partner can do’.

Brand partnerships vary in their objectives and in what the partners are expected to contribute. This could be spending on advertising, product development and/or promotion (as with American Airlines and Blockbuster DVD).

Once the targets are established, the agent that has been instrumental in putting a brand partnership together will usually take on — and charge for — the role of monitoring progress, through periodic reviews. These could involve incognito visits to retail outlets to see how the partnered brands are being received, regular checks on call centres and website inspections.

Using the example of MasterCard, Seward says Touchdown monitors 100 brand partner relationships, with regular reports back to MasterCard and its partners. With Hertz hire cars, MasterCard can steer clients to special deals and elsewhere it has other relationships that, for instance, allow its clients to obtain discounts when they buy office accommodation, personal computers and other business tools.

Unrelenting vigilance is essential, says Seward. ‘If there is a falling off, we act fast.’

See also: Building a brand – The story of Hotel Chocolat

Marc Barber

Raven Connelly

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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