Do ride-sharing app partnerships drive revenue, awareness for brands?
A number of big-name brands have already entered into partnerships with ride-sharing services such as Uber and more such collaborations are expected to roll out in the future due to the convenience they offer users and the inherent revenue potential for marketers.
Brands running the gamut from the hospitality sector to the financial industry have entered into alliances with Uber to offer customers free rewards and simultaneously maximize revenue potential for their own companies. While marketers must ultimately decide whether a long-term or short-term partnership is in its best interest, this strategy will only become more popular as the year progresses and as mobile commerce opportunities widen.
“Over the past year we have seen a spike in the number of marketing campaigns that are executed in partnership with ridesharing apps,” said Shuli Lowy, marketing director at Ping Mobile, New York. “As these apps continue to battle for market share, many have introduced cross-promotional partnerships that keep the apps fresh and the consumer experience dynamic.
“The partnerships also allow other brands to engage their fans through the new, exciting medium and has been driving impressive results,” she said. “Marketers are often beholden to different sets KPIs—some of which are focused on brand awareness, user growth, and retention.
“Short-term and long-term programs with Uber serve different key objectives.”
Real utility and convenience
Ridesharing apps have undoubtedly experienced a meteoric rise thanks to the sheer convenience they offer customers. When a major brand teams up with a taxi service, the utility is often so great that it prompts consumers to leverage the partnerships for their own use.
For example, Hilton Worldwide ushered in a partnership with Uber by enabling guests to set ride reminders, request vehicles to and from nearby locations as well as explore local scenes via a digital guide powered by Uber within the HHonors loyalty app (see story).
The ability to earn loyalty points for using the Uber feature within the HHonors app is likely a nice incentive for travelers, who may opt to stay at a Hilton property to snag those rewards, therefore driving sales for the hospitality brand.
“Long-term partnerships can make sense, if the partnership advances the meaningfulness of the brand to its target consumers,” said Joline McGoldrick, vice president of insights at Millward Brown Digital, Washington, D.C. “An event-based partnership can help keep the brands top of mind for consumers; however, in order to keep the partnership relevant and appealing to audiences, brands want to think about the utility or everyday relevance of the promotion.”
If these partnerships offer consumers the ability to use a ridesharing service within a branded application and receive rewards for doing so, they may result in a significant uptick in sales for the brand. Users increasingly look for utility features in mobile, and may feel more loyal to a marketer who provides them than one who does not.
“We know that consumers prize loyalty and rewards and have now come to expect them from brands,” Ms. McGoldrick said. “This partnership with Hilton helps Uber meet that need, while Hilton benefits from being more integrated in a consumers end-to-end travel experience.
“As consumers participate in more loyalty programs (often in the same vertical), differentiation of these programs becomes more important and partnerships can aid in setting brands apart from competitors.”
Even if a particular partnership does not offer immediate commerce opportunities, the unavoidable branding will likely result in success for the company in question. When Capital One provided Uber users with the option of ordering free ice cream to eat during their taxi ride, its brand name was certainly on consumers’ minds.
This strategy could fuel future revenue for Capital One, as individuals who are searching for a new credit card or home loan may choose to sign up with the brand after its generous, no-membership-needed offer.
“A long term partnership such as the one that Uber has with Hilton may serve as a value proposition to hotel-goers when they are choosing which loyalty program to become a part of,” Ms. Lowy said. “If a consumer is browsing through the options and is a frequent Uber user, he/she may choose to become a Hilton frequenter simply to derive extra value from Hilton’s point offering for guests using Uber.
“A short-term partnership such as the one that Capital One ran may be focused on a short-term branding boost or a facilitator of customer satisfaction. The limited time promotions also bring a brand to front-of-mind and put it in a temporary spotlight.”
Major brands looking to engage in cross-marketing opportunities would likely be well-suited to join forces with a ridesharing app, but only if they are able to provide relevant rewards to consumers as part of the partnership. Furthermore, these types of alliances may work best in metropolitan areas with plenty of vehicle options for guests to select from.
“Long-term partnerships and short-term partnerships both drive value to brands, though the key value proposition provided by each is different,” Ms. Lowy said. “Short-term campaigns may be more focused on brand building and customer satisfaction whereas long term partnerships may focus on driving membership and customer retention.”
Alex Samuely, editorial assistant on Mobile Commerce Daily, New York