“If you hunt two rabbits, you will lose them both” –old Turkish Proverb Has the current recession affected associations? The data is hard to deny. According to one survey8, 36% of the 180 associations polled reported a decrease in their membership during 2010. In other words, more than a third of associations lost more members than they gained. Understanding this dip is not difficult. Today, people are faced with difficult choices, stemming from the urgent realities of their situation. Time, income, and personal commitments are not just limited resources: they are sometimes wholly non-existent, or unstable at best. For example, the recent recession has seen the economy put into flux, increasing the financial demands and employment uncertainties of millions of Americans. As a direct result, millions are making decisions about what causes to support, which associations to stay active in, and which to discontinue.
- 1. WhitePaper Affinity Marketing Programsand the Associations DilemmaThe Associations DilemmaIf you hunt two rabbits, you will lose them both old Turkish ProverbHas the current recession affected associations? The data is hard to deny.According to one survey8, 36% of the 180 associations polled reporteda decrease in their membership during 2010. In other words, more thana third of associations lost more members than they gained.Understanding this dip is not difficult. Today,people are faced with difficult choices, stemmingfrom the urgent realities of their situation. Time,income, and personal commitments are not justlimited resources: they are sometimes whollynon-existent, or unstable at best. For example,the recent recession has seen the economy putinto flux, increasing the financial demands andemployment uncertainties of millions of Ameri-cans. As a direct result, millions are makingdecisions about what causes to support, whichassociations to stay active in, and which to dis-continue. This in turn creates a dual demand onassociations to increase their value in the eyesof the members (in order to recruit new membersand retain old ones) while also trying to makeup for lost dues revenue.These two demands are in tension, and so as-sociations face a dilemmaa dilemma that isparticularly keen in this tentative post-recessioneconomy. On the one hand, associations needto recruit new members and retain the membersthey have. Members are, after all, the lifebloodof the association, driving its activity and givingit a reason-for-being. On the other hand, asso-ciations need to stay financially stable. Revenueshave to keep up with operating expenses, whichnaturally increase as membership (and memberactivity) increases.Why are these two goals in tension? Recruitingand retaining members requires a substantialROI for the membership, usually in the form of Volume 1.2011 www.affinitycenter.com 2011 Affinity Center International LLC, All Rights Reserved.As the economy haschanged, so have mem-ber expectations. Themajority of associations(59%) admit that theirmembers needs havechanged. For instance:32% share that theirmembers want more net-working opportunities,42% say that memberswant to pay less formembership & products,42% tell us that theirmember expectationshave changed in otherways, including legis-lative policy activity,scholarships and finan-cial assistance, amongothers, as well as cleareror deeper evidence ofbenefits/ROI.From The Recession:Is There a Silver Liningfor Associations?Fowler/Daxko 2010.
2. Leveraging an AssociationsAttributes: AffinitySo how can increased recruitment and retention bepursued at the same time as financial stability? Thekey is to leverage those attributes that an associationalready has:An understanding of their members. Peoplejoin associations because of a common interest,cause, or professional affiliation. After a memberjoins, associations often continue to collect data aboutthem, including information about their interests, pro-fessional concerns, and demographic data.5,6Thus,associations have an understanding of their membersthat can provide valuable marketing informationinformation that can be of critical value to partners/sponsors.The participation of their members. Any typeof engagement, however small, increases a membersperception of the value of their association membership.3Furthermore, utilizing the grass roots power of anorganization can turn small, incremental behaviorsinto large effects.1Their members trust. Members often turn to theirassociations for help, ideas, and education.2Associationsare also places where people with common interestscan come together and form a community. Such inter-dependence is both fueled by, and contributes to, trustin the underlying association. Thus, the endorsementof the association can direct members behaviors.21This level of trust is a natural fit for loyalty programs.Of course, associations vary in the degree to whichthey have these attributes. All three attributes are majorlyaffected by an associations cohesiveness. The measureof an associations cohesivenessand, subsequently,the trust that its members place in the associationisknown in the literature as affinity. The classic definitioncomes from Machiette and Roy (1991): The termaffinity basically depicts an individuals level of cohe-siveness, identification, and conformity to the normsand standards of a particular reference group. Themarketing concept, however, focuses directly on thesatisfaction of individual wants and needs. It centerson the expectation of benefits to the consumer.13,14 Volume 1.2011 www.affinitycenter.com 2011 Affinity Center International LLC, All Rights Reserved.benefits.8,11,20In fact, a 2010 survey of associations and association members revealed that, of all members thatchose not to renew association membership in 2010, a whopping 36% (over a third) chose not to renew becausethere was not enough perceived value in membershipthe number one most common reason cited in the survey.16But providing value to members often has a cost, and rising costs are hard to justify when membership is alreadyshrinking. Adding to the tension, members expect association dues to go down during a recessionor, at thevery least, base their decision to continue membership partly on lowered dues.8,16There is an old Turkish proverb that goes, If you hunt two rabbits, you will lose them both. Associations are, inessence, trying to hunt two rabbits. The data show that, while some associations are succeeding at pursing twogoals, many are not. 3. Volume 1.2011 www.affinitycenter.com 2011 Affinity Center International LLC, All Rights Reserved.Affinity, then, has both an attitudinal component (cohesiveness, identification, conformity) and a marketingor behavioral component (membership in return for benefits). The strength of an associations affinity has beenfound to correlate positively with the strength of an associations endorsements, motivation for members partici-pation, and members identification with the association, and negatively with member decline.19Understanding affinity in this way, it is easy to see how member recruitment and retention can be brought intosync with financial stability. Associations can bring a target market (and data about that market) to a sponsor/partner as well as their endorsement, in effect acting as an affiliate to the sponsor/partner. The sponsor/partner,for their part, can provide the association with non-dues revenue based on the association members patronage,which provides and alternative to volatile dues income and a financial cushion for the future.21Finally, theassociation members gain access to exclusive offers and a customer service experience that adds value to theirmembership, while the marketing efforts of the sponsors/partners can be uniquely crafted to their interests andneeds.4,2Affinity MarketingMarketing toand throughassociations thus provides a unique opportunity: associations naturally formpre-selected target markets.13,19Again, Macchiette and Roys definition: Affinity marketing may be defined asa unique exchange process in which value-expressive products and services are marketed to reference groupswith cohesiveness, common interests and/or values, usually offering shared incentives, in return for the groupsendorsement as a marketing leverage to its individual members or constituency.14Affinity marketing, then, not only taps into the members personal needs (and their subsequent calculationsof ROI), it also taps into their group related needs14, including the feeling of helping or doing the rightthing.8,10,17Affinity Marketing is substantially different from similar sounding market efforts, such as cause-based marketingand sponsorship.7,9The main difference is that the corporate partner is specifically targeting, and providingvalue to, the members of the association itself (gaining valuable mind share and market data in the process),while the association also gains from providing a benefit to their members. Critical marketinginformation Common norms and bonds Increase in perceptionof value Large effects throughincremental behaviorsUnderstandingMembershipParticipationofMembersMembersTrustAssociationsAffinity Associations endorse-ment can directbehaviors Fits well with loyaltyprograms 4. An effective affinity marketing program is a concreteway of avoiding the associations dilemma. Accordingto David Carrithers of Affinity Center International,A professionally developed affinity marketing programcan bring the associations value to life and make itobvious why the member needs to stay active. The sadfact is there are only a few of these types of programsin existence for the association market.2Example: Loyalty Points ProgramsRunning through the various kinds of affinity market-ing programs is beyond the scope of this survey, but abrief example should suffice to give the flavor of suchprograms.One kind of affinity marketing program is a points-based loyalty program. The idea behind points basedloyalty programs is not new: consumers accumulatepoints by engaging in particular behaviorsfor ex-ample, using a specific credit card or airline over itscompetitors. These points, once accumulated, can beredeemed later for various rewards. The goal of sucha program is to change both customer behavior (in-crease episodes of spending and amount of spending)and attitudes (foster a relationship so that customersserve as advocates for the brand and resist competi-tive threats).Such loyalty programs have been largely successfulmultiple studies have shown that loyalty program mem-bers remain customers longer and spend, on average,50 percent more than similar customers not enrolled ina loyalty program.4The novel twist is in incorporating such a program intoan associations membership retention and growthcampaigns. One way to do this would be to integratea typical points-for-reward program with an affiliate orroyalty program that pays the asso