As the new year begins, one of the most common resolutions people make is to lose weight. And, it s might be a good time for businesses to consider whether they need to shed weight, too. That is, weight in the form of marketing partners. The parallel to weight loss came to mind as recent events unfolded involving American Airlines. First, American ended its partnership with online travel service Orbitz, no longer allowing Orbitz to list American’s flight schedules or sell tickets. In response, Expedia, one of Orbitz’s competitors, pulled the plug on its partnership with American for what Expedia viewed as a “anti-consumer” and “anti-choice” decision by American.
The end of the American-Orbitz and American-Expedia partnerships invite evaluation of how marketing partners add value to a business. Three considerations come to mind:
1. Do partners enhance or detract from the brand experience? American Airlines appears to be interested in having consumers engage in a direct relationship with American, not travel websites. But, if consumers value the convenience of shopping and buying from partners, denying them the option may do more harm than good.
2. Can your company deliver the value your partners bring to the relationship? Shedding marketing partners has financial implications in terms of reducing marketing expense via no revenue sharing, but can your business take on additional customers that were served by partners? Customers may have come to your brand because of the partner, and if you are no longer associated with the partner, will customers still be attracted to you… or was your partner the attraction all along?
3. Will lost revenue from a partnership be offset by cost savings or acquisition of new customers? Despite statements by American Airlines executives about strengthening brand relationships with customers, the move away from Orbitz is driven by financial considerations. The concept of building more direct connections between customer and brand is great, but if visions of dollar signs overshadow creating brand relevance, then the decision to divorce a partner may be a misguided one.
Business relationships are like personal relationships – even the strongest partnerships hit rough times and experience conflict. And, it is not uncommon for a business relationship to end for many of the same reasons that mark the demise of personal friendships: changing priorities, unmet needs, or a different way of looking at things. A marketing partner is not a permanent appendage but rather a strategic partner that should add value not only to your customers, but to your business.
As for American Airlines, this blogger has flown the airline occasionally… thanks to Orbitz. I wonder how many customers like me will no longer fly American because it has ended its relationship with Orbitz.
Labels: American Airlines, Marketing Strategy, Orbitz