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Aug 08, 2002
Case Study

Do Co-Branded Sites with Partners Really Work? Discovers Some Hard Truths

SUMMARY: It seemed like the ultimate no-brainer marketing deal. Outward
Bound instructors were going to give all their students a list of
equipment required for a course, plus a link to the official
Outward Bound online store to purchase it at. Which would be
powered by outdoor "gear" eretailer

Why did it not generate killer sales? CEO Mike
Morford has some theories, plus tips for other retailers who want
to try online partnerships.

This Case Study also includes interesting demographic notes on how
the outdoorsy/sportsy crowd is taking over America's wealthier


Co-branded sites have been touted as the killer app
for eretailers who do not have famous offline brand names. Why
spend millions trying to get consumers to remember who you are,
and maybe someday visit your site?

Instead, plant a version of your store in the middle of somebody
else's site and get sales from their traffic.

Does it really work?

Mike Morford, CEO of the eretail and "lifestyle" site,
believes in testing every possible marketing channel at least
once. His goal: New customer acquisition costs meeting his
industry's average of $14 per customer.


First the team did a great deal of research
on their marketplace and their current customers.

"We're trying to tap into passion and holistics," says Morford.
"The upper class is moving towards kinds of buying behaviors as
status symbols. The simple, classic outdoor lifestyle is
definitely something people want." At one end of the spectrum,
"extreme outdoor" people spend all their money, time and passion
on things like entering $60,000 adventure races. Their influence
trickles down to weekend warriors, occasional weekend warriors,
and at last to the wannabes.

"Wannabes are the people that drive a Ford Explorer or BMW SUV to
get an expresso, and they're wearing a North Face jacket, but the
last time they saw dirt was 20 years ago. It's more a statement
about who I am and who I want to associate with and less about
functionality and sport," says Morford. runs focus groups and online surveys on each of these
demographics within its customer base in order to identify
potential co-brand partners.

Morford explains, "We'll look at what they're doing, where are
they spending money, what brands resonate. What kind of magazines
do you read, what type of instructional courses have you taken,
what types of adventure trips have you taken, which organizations
did you go with, etc. We're sorting the data looking for lifestyle
behaviors. Then we try to partner with those organizations that
rise to the top of the list."

For example, runs a co-branded store within Outward
Bound's Web site.

"When students sign up for a course, they are given a recommended
list of what gear to show up with. It's an online list that's
generated dynamically by the instructor using our database. Then
the student goes to check off what they donít have and orders the

Other co-brands's signed up include National
Geographic (the co-brand site is,
Backpacker Magazine, campsite reservation service ReserveAmerica,
and the conservation organization American River.


Morford says's sales continue to grow 45%
per year, including this year. However, so far the co-brands
have contributed far less than expected to this growth.

Morford says, "To a degree it works. It just doesn't work as
well as I would logically think it would work. It's not
something that's an enormous revenue driver." Not even the
Outward Bound deal is a raving success yet anyway.

Why? Morford lays much of the blame on timing. The Internet is
still too new for many famous offline organizations to have
adjusted to it. (Yes, this story is being written in mid-2002, a
time by which most of us experienced Web marketers figured the
rest of the world would have caught up.)

"Typically their Internet strategy is very far behind. It's not
an area they've invested a lot of money in. It's a totally new
business for them. They're not used to having people sign up,
not used to driving them to the gear store. It's a completely
new system and process for them."

Which means's business development team have learned
to chose their co-brand deal targets more based on who is already
showing signs of online sophistication, than on who is the
strongest offline. "If they're too far behind the times, we
don't need to be the ones to bring them into the 20th century."

Morford notes that offline media companies are all over the board
in terms of online experience. "Often one media company gets it
and their direct competitor has no clue whatsoever." has learned to build more time into the negotiations
calendar. "It's a pretty long and drawn out process." And to be
ready to shoulder a heavier-than-expected educational burden once
the deal's signed.

"We help them try to grow their newsletter list, teach them to do
search engine seeding to get traffic. There's a whole lot of
time investment into education. Even just calling them up,
'Remember this is what we're going to do.' That's what our biz
dev folks do."

On the backend, optimizes each co-brand store to make
sure it displays the products most likely to sell to that
demographic when the traffic does get through. And the Company
has hired consultants from NetConversions to make sure the
various home page layouts are as effective as they can be for
visitors to use.

Then it comes down to sitting and waiting. Someday Morford
hopes co-brands will be the killer app. Right now they are just
incremental revenue and not a stunning amount at that.
See Also:

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