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Hitching a ride
New players are using co-marketing to draw customers and scale up

Himanshu Kakkar

OnePlus is a big supporter of the co-marketing model. “Not just with Ola, we have done it with a few other partners including AirAsia,” says Karan Sarin, former head of marketing at OnePlus. The Chinese smartphone maker is among companies who aren’t willing to spend heavily on marketing. In fact, OnePlus doesn’t even have an offline distribution channel, and sells products online, with ‘invites’ to build exclusivity. 

Karan Sarin, marketing head, OnePlusSreedhar prasad, partner, e-commerce and start-ups, KPMGHowever, last year, the company felt the need to walk out of its comfort zone, without substantially bypassing its marketing philosophy. “We are primarily an online-only brand. But we wanted to explore the offline medium and give users a chance to experience our product. To bridge the gap, we created a campaign across eight cities with Ola,” shares Sarin. All the user had to do to get their hands on the OnePlus 2 model was to book an Ola cab through the app, says the marketing head, adding: “During the campaign, we received more than 150,000 requests to experience the handset and 5 million registrations for the phone.” To buy the phone, one had to register and get lucky with the invite though.

Based on the response for the OnePlus 2 campaign, the company decided to wade a step further for its new offering, OnePlus X, last November. “We actually sold through the Ola app. It was a similar process, you book the cab and they will deliver the product. But the best part was that the delivery would happen in just 15 minutes! And demand went through the roof,” recalls Sarin. As evident, the partnership worked splendidly for OnePlus, but Ola didn’t do bad either, garnering extra bookings for each request. 

As a strategy, Sarin says, co-marketing is superior. “Our OnePlus forums have 4 million active users. If the brand had to organically reach those levels, it would be very difficult.” 

The OnePlus-Ola partnership though is not unique. Sreedhar Prasad, partner, e-commerce and start-ups at KPMG, says that a lot of start-ups are coming to them to figure out their alliance strategy. The one obvious benefit of co-marketing, like in the OnePlus-Ola case, is that you get access to the other guy’s customer base. Prasad says, “The benefit is that you are piggybacking on the trust someone else has created. Taking the conventional route, for OnePlus — there is a Flipkart, there is a payment gateway, there is a warehousing partner, logistics partner and last-mile delivery. When Ola is doing it, there is no other intermediary there. And you are using the payment model that Ola has established for its customers. If OnePlus had to do it on its own, it would need to create an app, tie-up with players like Blue Dart and a lot of other things.” 

Little wonder then analysts feel we could see more co-marketing campaigns in the future. “That is the way to go because it is far more profitable and the cost of (customer) acquisition really comes down,” opines Prasad. 

Piggyback 
Where OnePlus chose Ola, food ordering and search engine Zomato chose rival Uber. The duo teamed up in April last year to cater to Indian users. As part of the deal, Zomato users could instantly see the estimated pick-up time, fare and travel time to the restaurant they were looking up, all from their current location. Soon though, much in line with its global ambition, Zomato extended the partnership to 27 cities across 13 countries. But how does co-marketing help out the food delivery app? “A smartphone user uses a lot of apps that offer information or convenience. By working with partners, you can provide greater value to users, increase the purchase intent, drive brand recall and create new revenue streams,” says Pramod Rao, senior vice president, growth, Zomato. 

Jagdeep Kapoor MD, Samsika Marketing ConsultantsPramod rao Senior vice president, growth, ZomatoApps are indeed the new battleground for grabbing customer attention. But is there merit in sharing each other’s apps for such campaigns? “You download one app and have access to the other. An alliance like that can double or triple your reach,” says Prasad.  

Wise to this, young companies on the block are tapping various segments. “We recently did a co-marketing campaign with Tinder during Valentine’s week, wherein we curated a list of most romantic places to dine at post a match. Tinder, too, created a Zomato profile, which on a right swipe, provided the user a promo code that they could use when placing an online food order,” shares Rao.  

Jagdeep Kapoor, MD, Samsika Marketing Consultants feels new age companies are making the best of potential synergies. “There is synergy, because of which consumers are getting a better experience. The economics is similar to shared taxis. It definitely helps customer acquisition and improves the efficiency of the campaign,” he says.

Old or new
Co-marketing not just helps new companies tap established brands, it also let’s them enjoy the positive rub-off effect. For instance, mobile wallet Paytm has partnered a lot of established companies to its benefit. “Two years back, we were a younger brand. We did campaigns with ITC (Paytm cash was offered as a freebie with ITC’s products). And, we got about 3-4 million new users,” shares Shankar Nath, senior vice president at Paytm. 

Shankar nath Senior vice president, PaytmWhile the strategy clearly works for online companies hoping to tap offline channels, what’s in it for a brand like ITC, Britannia or Pepsi? “Lots of big brands run promotions, at least once a year. They would give a freebie and incur the entire cost. But there was one problem. The freebie offered (let’s say a small chips pack with Pepsi) is probably relevant to 20% of their customers. But Paytm cash is relevant to 95% of users,” explains Nath. Moreover, the ‘freebie’, advertising and marketing costs are shared by the brand and Paytm with the tie-up. 

But co-marketing isn’t free of possible friction points. Nath is aware of these issues. “Lot of discussion is around what the offer should be. Each brand wants a significant part of the gratification (in Paytm’s case). But we try and align it with our average cost of (customer) acquisition.”

As Nath says, choosing the right partner is make or break in such co-campaigns. OnePlus also counts its campaign with AirAsia, wherein the OnePlus 2 model was demonstrated by the AirAsia crew, as a successful one. “There are a lot of brands now and many of them are still in the transition phase. So, the biggest challenge is finding the right partner,” says Sarin. 

There aren’t too many who dispute that such campaigns help new companies acquire customers, relatively cheap. But as these companies move up the maturity curve, the reality starts to alter. “A year ago, when I was running such campaigns, I was getting 70% new users, but today it is perhaps only 30%. That means the cost of acquisition is going up. That’s a challenge,” says Nath. According to him, as the user base has grown, new customer gains, as a percentage, have fallen. But the wallet company isn’t willing to give up on the strategy yet. 

Rao of Zomato opines that co-marketing campaigns can be used to retain customers as well. “Partnerships are critical to driving retention as they are for new user acquisition. For example, a well-timed partner campaign on Zomato receives around 2.5x more views than average from existing users.” 

But Prasad sums it up perfectly when he says, “It’s the smartest way to scale up.”

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