How To Forge A Successful Brand Collaboration

There’s no “I” in team, but, increasingly, there’s indie. As influencer sponsorships lose luster and Instagram algorithm changes make it tougher to break into people’s feeds, entrepreneurs are realizing cooperation is one of the most powerful tools they can wield to realize business goals. They’re exploring insights, growing customer bases, spreading messages and creating products together. “Today, brands are not isolated, depersonalized entities. They are living, breathing, soulful organizations that interact with the world around them, which is why partnerships have become so natural in the marketing conversation,” says Amanda Baldwin, president of Supergoop, an SPF brand that has joined forces with the fashion labels Milly and Rebecca Taylor on products. “What better way to reach a new, like-minded audience and express who you are than by doing it through a new friend.”

Certainly, befriending a fellow brand isn’t a novel tactic. The first Eddie Bauer edition Ford vehicle debuted 35 years ago, and Target marked two decades of designer collaborations this year. However, executing a successful tie-up in the current noisy consumer goods environment and uncertain social media landscape is harder than it was when people lined up for hours to snag pieces from Target’s high-low collections with the likes of Alexander McQueen, Rodarte and Missoni. To figure out how fruitful alliances are struck, Beauty Independent chatted with beauty brand founders and consultants about the best mutually-beneficial steps to take in a collaboration process.

How Collaborations Materialize
How Collaborations Materialize
Of course, embarking on a collaboration is a strategic decision, but collaborations don’t always stem initially from strategy sessions. Hatch founder Ariane Goldman and Tenoverten co-founder Nadine Abramcyk were friends before becoming nail polish co-conspirators. Melissa Palmer, CEO of Osea, and Ariel Kaye, founder of Parachute, traveled in similar Los Angeles area circles prior to linking on apothecary items. “We went to a workout class, and were talking about scents and fragrances. I kept saying I really wanted to do some kind of room spray, and Ariel said, ‘I want to do a linen spray,’ and one thing led to another from that,” recounts Palmer. True Botanicals founder Hillary Peterson and Corpus founder J.P. Mastey swapped entrepreneurial stories in advance of striking a deal on a joint deodorant. “I talk with so many other founders and CEOs on what they’re doing, and what’s working and what’s not. You find out right away the people that are willing to share information and support each other’s growth,” says Peterson. “A lot of times that’s how it starts.” It didn’t hurt that Corpus and True Botanicals have the same public relations firm. Oftentimes, behind-the-scenes associations along the supply chain or through service providers connect eventual collaborators. Beauty brands also deliberately pursue partners that make sense for their purposes. Emilie Davidson Hoyt, founder of Lather, believed a meditation app with wellness-oriented users would be a good fit for a partnership, and her natural beauty brand contacted several. Ultimately, it developed the Mindful Moments Meditation Kit with Stop, Breathe & Think for the 2017 holiday season. Discussing courtships of potential collaborators broadly, Hoyt says, “When you are approaching them, you have to put together a thoughtful presentation and some deliverables.”
The Reasons For Coupling
The Reasons For Coupling
Beauty brands are typically hoping to enlarge their audiences through partnerships. By teaming up with a meditation app, Hoyt explains Lather was attempting to “gain access to an audience that’s our demographic, but somehow hasn’t discovered us.” Abramcyk encourages brands to zero in on elements of their businesses that might be boosted by a pairing. Tenoverten’s consumers principally reside in New York and Los Angeles. It could possibly build followings in cities it’s not as strong in if it were to collaborate with a brand that, for example, is popular in Dallas and Charlotte. Digital reach normally trumps geographic reach. Abramcyk says, "It's important to align yourself with brands that have the same size social audience. It’s not always the bigger numbers, the better bang for you buck. It's about the quality audience." If specific distribution is an aspiration, Ameann DeJohn, founder and CEO of Ameann Beauty, suggests brands propose an exclusive product to be sold at a desired retailer. She counsels brands to think long-term about a partnership, not solely about the immediate effort. DeJohn says, “Do you like the people that you are working with, and do you see future collaborations? This is most important.” Brand founders and beauty industry experts emphasize customers should be top of mind in the evaluation of a partnership. DeJohn stresses, “Don’t forget that the customer is the most important, and how will they benefit from the collaboration?” Mastey says, “You have to put yourselves in the position of the consumers and fans, and think, ‘How would I receive this information? How excited would I be to hear this? Consumers are very savvy, and I think they can sniff out something that feels like a forced opportunity.” Mia Swikard, founder of Mia Simone Beauty Group, asks the following questions to evaluate a brand collaboration: “What does having the two brands come together offer your customer that he/she may be interested in, but has not discovered on their own yet? Does this partnership give your brand access to a new customer audience? Does it elevate your brand? Does it present your brand in a new light?”
Sealing The Deal
Sealing The Deal
Izzy Sapien, founder and CEO of Blk Bot, instructs brands to test the waters of collaboration with modest initiatives—a social media giveaway, short-term pop-up or event, for instance—before determining a bigger partnership such as product co-creation is worthwhile. Once product co-creation is on the table, indie beauty brands generally don’t involve lawyers in their agreements, which DeJohn says “should be simple and to the point.” She continues, “There should be clear arbitration clauses, but, if the intent is clear, then the agreement should follow. Any brand that gets too technical and legal may be an issue down the line, and you should go with your gut feeling. If negotiation is difficult, so will the partnership.” Swikard advises lawyers be roped in if fees are exchanged for the use of art or a brand name. Product collaboration deals can be structured in various ways. A brand distributing the goods can purchase them from their collaborator at a bit above cost or wholesale; the brand not responsible for making the merchandise can take a comparatively small percentage of sales on proceeds; or there can be a more equal revenue and cost share arrangement. The crucial question, according to Au Naturale founder Ashley Prange, is, “Who is owning the investment upfront because it’s a lot of risk?” Tenoverten produced the nail polishes for its Hatch collaboration, and Hatch bought them at wholesale. Lather has done partnerships with tea companies and picked up the tea from the companies at slightly higher than cost. Au Naturale teamed up with Good Housekeeping on a lipstick, and Good Housekeeping commanded a percentage of the sales. Au Naturale manufactured the lipstick. DeJohn tells brands to secure as much control as they can. She says, “We always recommend that the brand make the product and be responsible for supply chain as well as quality. It is easy to think that the other group can help and, in some cases, we think that they can save us from our limited knowledge. However, in our experience, the founding brand always has more skin in the game and should be responsible and own the IP.” It can be difficult to get a handle on demand for a product that has no precedent, so experts and entrepreneurs advocate caution on production runs. Hoyt says, “I am always conservative because, if it is not successful, it might not be something that you can quickly and nimbly change around or give out as a gift with purchase.” For the Hatch-Tenoverten partnership, 500 nail polish sets were ordered. Abramcyk says, “We want a collaboration to be successful, so we don’t go out and produce thousands of them because we want them to sell out, and people to feel like it’s a limited edition.” For emerging beauty brands with under $1 million in annual sales and a handful of healthy retail accounts, Swikard says, “You can probably forecast low-end three units per door [and] upwards of 12 to 15 for higher-volume doors for opening-order quantities.” The tricky part, though, she adds, is that “minimums in most cases will be 5,000. If you’re using an existing component, you may be able to go for 1,000.” The lofty minimums make collaborations difficult for indie beauty brands without in-house production. Prange says, “When you’re profit sharing and your margin is further reduced every time you need to use a filler, what are you looking at at the end of the day? For some brands, that’s why it is not feasible.”
The Particulars Of Partnerships
The Particulars Of Partnerships
Stipulating deliverables and key performance indicators (KPIs) is critical to an effective collaboration. Every social media post, announcement, email and event should be prescribed. The dispersion of the data collected through those activities should be spelled out, too. Reflecting on Au Naturale’s linkup with Good Housekeeping, Prange says, “I would have been more specific on the ask for marketing, so we could measure in a more refined way to do it better next time.” Delving into the retail component, Swikard says, “If you are partnering with a brand and they have the existing relationship with the retailer, it is on them to push hard to sell in and through this SKU…A robust on- and off-site exposure plan should be laid out.” Obviously, brands care about sales, but collaborations for indie beauty brands are largely not really about money. They are about raising consumer awareness. Therefore, media impressions are usually a significant KPI. For Abramcyk, email acquisition is a central objective of partnerships. She says, “You need to build the tools to leverage the new people and reach out to them later.” Speaking of new people, Hoyt hones in on “if there’s a higher percentage of first-time buyers purchasing this than first-time buyers purchasing another product. Did you achieve media to reach a new demographic and sales? Did it sell out?” On top of absolute sales, Swikard singles out sell-through. She says, “You don’t want excess inventory sitting on shelves, especially in the luxury space.” No matter what they are, DeJohn is adamant that indie beauty brands identify their goals for a collaboration “at stage one.” “Don’t just be happy that you are collaboration,” she says. “Many young brands get excited to partner with bigger brands like they are going to make them successful. However, one collaboration is not going to make you successful. The real success comes from knowing what you want long-term.” She hammers home, “Don’t expect the bigger brand to carry the smaller brand.”
Where Collaborations Go Wrong
Where Collaborations Go Wrong
Brands must take stock of what they won’t compromise heading into a collaboration. Palmer details that glass packaging is integral to Osea, and it won’t move away from it for a partnership. She says Parachute “understood how important that was to us, and they worked with us to find a solution because they respect what’s important to our brand.” If that respect or understanding isn’t there, brands can be compromised by a partnership. Hoyt underscores, “Brand standards need to be carefully monitored.” Standards include discounting approaches. Hoyt says, “If you put your name on a product, would you be OK with them discounting?” Unwanted discounting can be destructive to a brand. Partnerships struggle if one partner feels they’re doing far more work and are for more dedicated than the other. “You don’t want to agree to sell a bunch of product at cost or co-develop a product if they’re not going to take care of you the right way through the branding, publicity, advertising and signage,” says Hoyt. DeJohn says, “Brand collaborations that I have seen fail are not because of lack of funding or lack of knowledge, but lack of commitment to manage the project. Smaller brands often think that the larger group knows more and can make it successful when, in reality, the larger brands have so much minutia that they don’t always manage the project well. Advice: Stay on task, have timelines, goals and deadlines.”