Finding commercial partners is a cost-effective way to reach a wider, or desired audience. When a brand pairing works well, it can garner great results and high engagement. But what makes a good partnership? One brand that has paired wisely and has the results to show for it is Spark.
When looking at Spark’s various strategic partnerships with a macro lens, it becomes clear that what the telco has really done is align itself with an idea or as Spark's general manager of marketing Clive Ormerod says “an experience”, which it has cleverly weaved into its wider marketing strategy.
And this idea/experience is music.
Just within the past week, Spark has penned the extension of its partnership (which gives its customers complementary access to the platform on selected mobile plans) with Spotify, which is now in its third year after achieving some impressive results.
In the past 12 months the number of customers using Spotify on their mobile has increased by around 125 percent, according to a Spark release.
Further, on an average day over 90,000 customers are using Spotify on their mobile devices.
Spark has also increased its number of ‘Pay Monthly’ mobile connections by over 120,000, the release says.
Ormerod says the results are so good that Spotify uses Spark as a case study for other prospective alignments.
Founder and chief executive of Spotify Daniel Ek said in a release: "We love our partnership with Spark. It's helped produce some of the highest engagement we've seen worldwide from New Zealand music fans. I'm really glad we've renewed this partnership and we will keep working together to deliver for Kiwi fans and artists at the same time.”
So, why has this worked so well?
“I think it’s worked well as our customers are winning and getting an experience that matters for them,” says Ormerod. “With the experience, it’s working well as at the end of the day we are helping ensure that music is more accessible and plays a bigger part in New Zealanders' lives.”
Ormerod threw the word “experience” around a lot during our interview. And it’s easy to see why. Experiences are becoming increasingly important to consumers and Spark wants its customers to continue engaging with the brand. Not just purchasing a smartphone and forgetting about the network they’re with until they need to top up each month.
“For us existing customers are important and that ongoing relationship is really important for us.”
And of course it is. Obviously Spark wants its customers to feel an allegiance, to choose the telco whenever it needs to upgrade, for people to tell their friends on other networks about how their provider is better.
So it's easy to see why it's partnered with Spotify.
New Zealand has embraced Spotify with open arms, as one of the highest growing streaming markets in the world.
New Zealand saw a 196 percent growth in subscription streaming revenues over 2014, according to IFPI, which is one of the highest growth rates globally. To compare, the US grew by 58.4 percent and the UK by 33.5 percent. Further, music revenue has grown in New Zealand from $23 million in 2013 to $26.3 million in 2014.
Source: Music Ally
Source: Music Ally
- Check out our interview with Spotify here.
But, Spotify is just a piece in Spark’s marketing puzzle.
“Music is a priority for us, and Spotify plays a piece. We also work with Live Nation, Auckland City Limits and Rhythm and Vines,” he says.
“Sure we might be able to provide Spotify, but on top of that we can provide them even better experiences whether it be exclusive access, backstage passes, etcetera. I would like to think of Spotify as a starting point and the others on top of that.”
Despite Spark’s younger persona post rebrand, Ormerod says the great thing about music is that it is “age agnostic”.
“We’re not looking to focus specifically on particular ages or demographics. Music talks to our customers in a way where they see value and we are seeing that from user behaviour.”
So what makes a good partnership?
“Ultimately we will partner with people, companies or individuals that allow us to deliver better experiences. So if we can provide better experiences for New Zealanders it is definitely an opportunity to partner,” he says.
“So as long as it works for our customers and is more useful in their lives, it is something we would look to get into to ultimately add value.”
The chief executive of the US National Retail Federation said at Retail NZ’s shop.kiwi event last month that there’s been a shift to more experiential spending, rather than spending on material goods, according to The Register.
Source: The Register
“They’re spending less on what we would consider to be traditional retail, such as the apparel category, and spending much, much more on experiences,” he said.
The change is being spearheaded by a generation of new spenders, he says.
“The young people of today, or tomorrow’s real consumers over the long-term, just don’t think of things the same way.”
So, if there’s a leaf to take from Spark’s book it’s that partnerships can be extremely successful, particularly when they provide valuable experiences, but these experiences need to integrate through every vein of a brand, to keep the customers coming back and spreading the word.