Affinity marketing

From CEOpedia | Management online

Affinity marketing refers to an activity of collaborative brand marketing, comprising an exchange between two or several companies with the same ideas in order to acquire or retain customers. In such relationships, costs are reduced, new channels to the consumer are opened and complementary brands can attract consumer benefits that neither party could obtain independently (Greenyer, 2004).

Affinity marketing is a process of turning passive customer referrals into active ones. This is a point-by-point strategy for taking control of the conversation, helping your customers make the people they care about and serve them better (Cooper, 2021).

Affinity marketing tactic growing tendency

Marketers are under pressure to seek out alternative advertising channels that offer a better, or less more measurable, return on investment compared to traditional media. For larger companies that have regular communications with their customers, this has led to renewed interest in partnerships where companies share these existing channels with the customer in order to advertise their products and services. A crucial factor to brand partnership is to work with companies that provide appropriate services as well as products. They have to have an affinity with the primary brand that makes the association acceptable to the clients. But partnership marketing is not for everyone - if it is executed poorly, it can be inefficent and a harm the brand. Poor partner matching due to incompatibility, imbalance or control issues is a risk associated with affinity marketing, as is negative consumer perception of partnership. However, affinity partnerships as a marketing tactic have grown significantly in the past few years (Greenyer, 2004).

Features of affinity marketing

The ability to have the direct mail opened and read is greatly boosted, when a consumer receives genuine service or product endorsement in the form of a personalized letter from a group leader. The third-party endorsement is a major attribute of affinity marketing. It is a promotional technique that takes advantage of a group to capitalize on the pre-established relationship the group and thus, adds persuasion and credibility to the sales message. The use of opinion leaders, group leaders or important personalities as source of significant information engenders trust allows consumers to avoid an exhaustive search for additional information evaluation alternatives.

Another distinctive feature of affinity marketing is the concept of shared incentive. This is an incentive related to the mission of a group and motivates members to participate in the program. The concept of "shared incentive" pioneered by affinity marketers has been extended to a mass market orientation. Consumers are increasingly influenced by non-product attributes. Recently, the concept of shared incentives has been mainstreamed and adopted by marketers through the implementation of cause-related marketing programs.

A third differentiating characteristic of affinity marketing is the enhancement package. This is a series of incentives specially tailored to the needs of the group member. An understanding of the lifestyle and interests of group members is essential to this task. The improvement set is the most important for the nominal group because the members of these groups have minimal social and commitment to the mission (Macchiette & Roy, 1992), (Mekonnen & London, 2018).

Criteria for affinity marketing group selection

Major affinity marketing measurement criteria are (Macchiette & Roy, 1992):

  • Level of participation within the group

Active: attendance and involvment at meetings and conferences, connections to other members, donations, participation in activities, official position held in within the group, responsive to solicitations of the group.

Passive: payment of dues on time, compliance with the principles of group norms, internalization of group norms.

  • Length of time as a member

Affinity tends to be stronger among members of the senior group. It happens like that due to their interaction and networking with other group members and improved status of group reached over years.

  • Social disclosure

The level of willingness to openly reveal group membership to the public. An example would be the adoption of a private individual's " designer credit card". Members like to display bumper stickers or hats and other artifacts, thereby displaying their group affiliation.

  • Level of socialization and personal interaction

The frequency with which individuals gather for social interactions such as vacation trips, informal gatherings, barbecues and other manifestations of of group cohesiveness.

Examples of Affinity marketing

  • Credit Card programs: Affinity marketing is used by many credit card companies to attract new customers and build loyalty. Credit card companies partner with brands, organizations, and charities to offer credit cards with unique benefits for customers. For example, a credit card might offer discounts on purchases when used at partner stores or restaurants, or bonus points that can be redeemed for rewards.
  • Co-Branding: Co-branding is a type of affinity marketing that involves two companies working together to create a joint product or service. This type of arrangement can help both companies to reach a wider audience and build brand loyalty. For example, a clothing brand might partner with a tech company to create a line of smart clothing, leveraging the strengths of each company to create a unique product.
  • Loyalty Programs: Loyalty programs are a popular way for companies to reward customers for their repeat business. These programs typically involve customers earning points for purchases, which can then be redeemed for discounts or rewards. Companies can also partner with other companies to offer unique loyalty benefits. For example, a grocery store might partner with a travel company to offer rewards points that can be redeemed for flights or hotel stays.

Advantages of Affinity marketing

One of the main advantages of affinity marketing is that it can provide businesses with a range of new opportunities, such as access to new customers, increased sales, improved brand recognition, and increased loyalty.

  • Access to New Customers: Affinity marketing can help businesses gain access to customers that they may not have been able to reach without a partnership with another company. Companies can leverage each other's customer base, allowing both companies to expand their customer base and reach more potential customers.
  • Increased Sales: By partnering with another company, businesses can benefit from increased sales. Partnerships often result in joint promotions and special offers that can drive additional sales.
  • Improved Brand Recognition: Affinity marketing can help businesses to increase their brand recognition by partnering with other companies. This can help businesses gain exposure to a wider range of customers and can help to raise brand awareness.
  • Increased Loyalty: Customers that have a strong connection to the brand may be more likely to remain loyal and continue to purchase from the business. Affinity marketing can help to create and strengthen these relationships, resulting in increased customer loyalty.

Limitations of Affinity marketing

Affinity marketing can be a very effective tool for businesses but it also comes with certain limitations. These include:

  • Limited scope: Affinity marketing is largely limited to the industries and areas in which the two companies have similar objectives. Therefore, it is difficult to form collaborations with businesses in different industries.
  • Negative associations: If one of the companies in an affinity marketing partnership is associated with a negative brand image or has a bad reputation, it can have a negative impact on the other company and its brand.
  • Lack of control: By entering into a partnership with another company, a business may have to give up some control over the marketing and promotional activities. This can be a challenge for businesses that value control.
  • Over-dependence: As the success of an affinity marketing campaign depends on the other party, businesses may become overly dependent on the other company, which can make them vulnerable if the other company fails to deliver.
  • Cost: Affinity marketing campaigns can be expensive, as businesses may have to pay for the other company’s services or marketing efforts.

Other approaches related to Affinity marketing

  • Co-Branding: This is a marketing strategy where two companies team up to create a new product or service. This is often done to combine the strengths of both companies and create something that neither could have achieved independently.
  • Joint Promotions: This is a marketing tactic where two companies collaborate to promote their respective products or services. This can involve cross-promotions, such as a buy one get one free offer, or offering discounts when purchasing both services together.
  • Loyalty Programs: Loyalty programs are designed to reward customers for their loyalty to a particular company or brand. Many companies collaborate with other companies to offer customers a wider variety of rewards, such as access to exclusive experiences, discounts, or complimentary products.

In summary, Affinity marketing involves a collaboration between two or more companies to acquire or retain customers. Other related approaches include co-branding, joint promotions, and loyalty programs.


Affinity marketing — recommended articles
Incentive marketing — Promotion mix — Marketing innovation — Outsource marketing — Influencer marketing strategy — Areas of marketing — Social network marketing strategy — Customer loyalty — Below the line advertising — Product quality

References

Author: Paulina Olszewska

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