Have you heard of Spotify? Unless you’ve been in hiding for a while, chances are you’re familiar with the company. The ubiquitous music app has developed a couple strategic alliances since its official launch in 2008. One of these is with adidas.
Now, you might stop to ask yourself, what would a music streaming company see in forming a strategic alliance with a sportswear brand?
Sometimes, the most successful strategic alliances come from two established brands that are in completely different markets. You have loyal users for Spotify, who don’t have any specific alignment to the sportswear market, that all of a sudden can find a reason to establish some loyalty to adidas all as a result of the strategic alliance.
By forming the strategic alliance, Spotify and adidas sent a signal to their current customers. My customers should expect the same excellent service from the partner in the strategic alliance. That in turn drove more customers to each as casual customers in one of the markets converted into more loyal prospects.
This also helped drive existing customers to renew their convictions. Because the strategic alliance was actually centered around a joint iPhone app, it brought in customers whose loyalty may have wavered and solidified their commitment. The app, adidas go, fused streaming music with fitness metrics. It used the phone’s accelerometer to pinpoint the appropriate tempo for the songs and then reported workout statistics and allowed the users to post their workouts on social media. This was appealing to both Spotify’s and adidas’s customers, as people tend to listen to music while they work out.
In all successful strategic alliances, both companies need to gain an edge for it to be a continuous partnership. Spotify was able to convert fitness enthusiasts into Spotify app music listeners, and adidas gained additional brand recognition and customer engagement through the adidas go app.
Along with shoring up the existing customer base, it also helped drive completely new customers. The novelty of the iPhone app was very attractive. Spotify now offers a standalone option similar to the app, but at the time, the adidas go application was the only option for syncing workout tempo and music tempo. That meant if you were a Spotify subscriber who wanted to have a specific tempo to workout to, you’d need to use the adidas go app.
The app also came with a 7-day trial of Spotify Premium, which afterwards prompted users to continue with a subscription or limited them to their local music library. This was a great way to convert anyone who did not already have a Premium subscription, as it allowed them to experience the full benefits of it before actually paying the monthly rate.
For anyone who was already a Premium subscriber, the app still had a huge allure because it was able to sync Spotify and local playlists by workout tempo. This allowed adidas to introduce its other features and metrics, such as the adidas miCoach Runscore, which provides workout feedback to the user. The app provided a clear benefit to the user, while leading to more adidas miCoach users.
Just because two companies are in drastically different markets doesn’t mean they won’t be able to form an advantageous partnership. A music streaming app and a sportswear company end up creating the perfect example of a successful strategic alliance.
Often, the most successful partnerships come from interested matchups such as these. If the alliance is fully fleshed out and provides a unique benefit to both partners’ customers, you might have a winning partnership. When little overlap exists between the current two customer bases, it allows each partner to fully explore the best ways to market to a brand new market.
While a sportswear company and music streaming app are both primarily B2C, the partnership can be applied to a B2B environment as well. Consider what niche your product fills, and find areas that have some overlap wherein you could start a strategic alliance. Two SaaS companies can interface or combine forces, for example. Who will be the adidas to your Spotify?