The ABCs of Affinity Marketing

The economic debacle of September 2008 left in its wake major economic losses at both the corporate and personal finance level. Equally disturbing, a looming economic uncertainty ensures this: fundraisers will need to work even harder and smarter to capture dollars which may no longer be earmarked for their organizations. While higher educational institutions statistically weather these storms better than many other non-profit organizations, there are still indicators that fundraising will be more challenging for colleges and universities as well. In addition to becoming better informed about market conditions and trends affecting their development efforts, college development officers and their teams need to seriously adopt strategies which will enable their loyal supporters to continue contributing to their coffers. Affinity marketing is one tool that satisfies that need.

"Slower Growth in Higher Ed Fundraising Projected"
In the July 15th, 2008 issue of Inside Higher Ed (insidehighered.com), it was reported that based on a Council for Advancement and Support of Education (CASE) forecasting tool, "giving to schools and colleges will increase by 5.3 percent over the next year, representing overall growth, but given weaker economic conditions, below the 7 percent average annual growth rate over the last 20 years." This finding, which already predicted declining fundraising opportunities, predates September 2008 when the nation suffered its worst economic crisis since the Depression. It's a fair assumption that in this post-Lehman Brothers, AIG et al collapse and federal bailout period, contributions will be down. As if that's not enough incentive to seek out new fundraising strategies consider the increasing competition for contributions. In 1994 there were an estimated 500 U.S. registered public charities and today that figure tops over 1,000 according to the National Center for Charitable Statistics (NCCS). If you consider the total of all tax-exempt organizations, the NCCS places that figure at 1.48 million. With increasing competition and decreasing contributions fueled by challenging economic conditions, higher education fundraisers need to present to their alumni, "friends of the college/university", local businesses, etc., other ways to continue supporting their schools. Affinity marketing is an ideal option for these economic times.

"A Lesson in Affinity Marketing"
Affinity marketing is a method whereby a non-profit organization partners with a for-profit organization such that when the non-profit and/or its supporters purchase a product/service from their affinity marketing partner, a portion of the proceeds from the sale are returned to the non-profit. If the product/service is an everyday item that most consumers and businesses use, the partnership can be especially lucrative. For instance, imagine if half of your alumni purchased their wireless phone service from ABC Affinity Marketing Company. Each time each of these former students used their phone, a portion of the call proceeds would be given back to the school. The percentage of the sale give back can be as high as 10%. Now, imagine if a percentage of the other individuals in your development database and a percentage of the local businesses which support the school also purchase their wireless phone service from ABC Affinity Marketing Company. Think how the dollars would add up. Of course, this is just one example of an ordinary, widely-used product/service which cost us nothing more to buy or use with the residual benefit of our college/university gaining funds for a new athletic center, science lab, theatre, high tech classroom, etc.

Other commonly used products/services which are ideal for affinity marketing partnerships include other computers, other telecommunications products/services (e.g., long distance phone service, Internet service), cable television, credit cards, office supplies, etc. However, all affinity marketing is not the same and it is critical that college/university fundraisers do their homework in selecting the right partners.

"Criteria for Selecting Affinity Marketing Partners"
To assure a successful affinity marketing partnership, seek out partners that demonstrate certain key traits:
Shared Values - First, you want a partner that values your mission and genuinely wants to see your goals achieved. That may sound like a platitude, but it isn't. Real affinity marketers often have missions that mirror that of their customers. Instead of simply selling products and services for a profit, they want to be a part of the non-profit community because they, too, share the "giving back" philosophy. In addition to giving a portion of their profits back to their customers, many also have vibrant volunteer initiatives, are members of various non-profit organizations, and regularly participate in the fundraising and awareness building events of local schools, museums, charities, churches and missionaries. Strong Commitment to Customer Service - The last thing you want to do is to compromise your relationship with valued alumni, corporate supporters or individual philanthropists because your affinity marketing partner did not provide a quality product, nor did they support the sale with the right customer service. The affinity marketing partner you select should offer high quality, reputable brand products and services with solid performance features backed by a strong product warranties and customer service policies. A company's customer service philosophy can be evaluated by asking simple questions such as:

• What training programs do you have in place for your customer service representatives?
• Is there a call center for questions or technical support?
• What type of technology do you use to monitor customer inquiries and services?

The affinity marketing partner should provide an assuring response to each of these questions:

• All of our customer service representatives are fully-trained both in our products and services and in our customer service policies and procedures. We also have a continuing education program whereby ongoing training is offered on new technologies.
• We apply state-of-the-art technologies in our call center such as late model servers and PCs, flat panel monitors, Voice over Internet Protocol (VOIP) phone system, and large plasma screen to communicate important information to our call center agents. In addition, there is an advanced Customer Relationship Management (CRM) software program in place that enables our representatives to access customer information on a real-time basis while on the phone with our customers, and facilitates order entry, maintenance and robust reporting capabilities.

This latter point is important for a college/university's development office charged with maintaining positive relationships with contributors and keeping track of funding sources.

Fiscally Sound and with a Proven Track Record - As with any vendor, it is important to seek out an affinity marketer that is fiscally sound, has a strong infrastructure with a reputable management team. Additionally, the company should be able to demonstrate a proven track record with a long roster of satisfied customers. Asking for references of current customers and contacting them for their assessment of the affinity marketer's service record is advisable. Going forward, asking the affinity marketer to keep you informed of all your supporters' purchases, usage patterns and inquiries is valuable for optimizing the affinity marketing relationship and its full potential.

"Strategies for a New Economy"
In the past, individuals represented the largest sector for giving to non-profit organizations. The Giving USA Foundation reported that in 2006, 75.6% all contributions to non-profit organizations including colleges/universities came from individuals. They contributed a total of $222.89 billion dollars that year. The rest of the breakdown was as follows: Foundations - $36.5 billion (12.4%), Bequests - $22.91 billion (7.8%) and Corporations - $12.72 billion (4.3%). The significance of sharing these figures is in the numbers.

Individuals represent the largest constituent of givers and also could represent the largest opportunity in an affinity marketing partnership. Imagine reaching out to every student, alumni, faculty member, administrator, member of the board, etc. with information about a new affinity marketing partner and how their purchase of a phone or Internet service could provide dollars back to the college. Imagine the potential funds that could be raised through their ordinary purchases from a reliable, customer- and community-service oriented affinity partner. The potential is there for enlightened higher education development officers who recognize that hard times demand new strategies that work in any economy.