Today’s article discusses affinity branding arrangements. Like co-branding, covered in the last article, affinity branding involves an agreement between two businesses to share in the branding of a product or service. Unlike co-branding, affinity branding typically involves an organization that adds value to its existing members or donors by offering products and services at special member rates.
Affinity groups typically include membership organizations or associations, and nonprofits and charities. “Affinities” can also take the form of any characteristic, ethnicity, hobby, background, profession, lifestyle or life-stage that unites a group of individuals, and affinity groups can thus also take the form of companies that cater to specific demographics. Affinity marketing is a way to induce customers to connect with a brand on an emotional level.
Affinity marketing is thought to have begun in the late 1970s when the American Automobile Association (AAA) partnered with MasterCard to offer AAA members a branded credit card with lower rates and special privileges. Affinity credit card programs boomed in the 1990s when credit card companies partnered with charities and sports teams to provide branded credit cards. Organizations offering such cards benefited from increased brand loyalty and awareness, not to mention increased revenues. Credit card companies benefited from access to the existing distribution channels of the organization.
Members of organizations are always looking for more incentives to maintain a membership, which makes them one of the most successful affinity groups targeted by affinity campaigns. Today, many affinity programs are organized around the use of data and customer contact lists. Typical affinity partners include airlines, hotels, banks, supermarkets and gas stations, but programs can involve virtually any product or service, as they are highly customizable.
Although the benefits to affinity programs are many, as with any arrangement that could impact the value and reputation of your brand, you need to enter into them with caution. We recommend that, ahead of exploring any affinity opportunities, companies develop their own branding guidelines that set forth objective criteria to be evaluated in connection with any affinity branding opportunity.
Because affinity programs, arguably more than any other licensing or co-branding arrangement, go to the emotional heart of brand value, we recommend organizations carefully consider
- Whether the affinity relationship complements and enhances the current image of the organization
- Whether the opportunity is good enough to motivate your members to change their behavior
- Whether the arrangement is financially beneficial
Finally, keep in mind that affinity campaigns should be viewed as long-term investments. Short-term or transitionary campaigns are not likely to realize any real benefits and may even result in a confusing message for the consumer. Through strategic use of such programs, and careful preparation of the legal documents setting forth the relationship, affinity branding can be a valuable tool to enhance a company’s reputation and revenues—building both equity in the brand and value to consumers.