Best Practices for Affinity Marketing in a Challenging Economy

The 7th Annual GuideStar Nonprofit Survey found that 64% of nonprofits surveyed reported an increase in demand as a result of the economic downturn since last September. At the same time, nonprofits are experiencing a marked decrease in funds from grants, bequests, individual contributions and major gifts. Mark Shamley, President of the Association of Corporate Contribution noted that, "Companies are looking to cut expenditures across the board and corporate giving is going to be part of that." In its November 2008 survey, the Direct Marketing Association's Nonprofit Federation noted that 63% of nonprofits reported their direct response rates have declined since the onset of the financial crisis.

Unquestionably, fundraising has become extremely challenging given the current economy. However, Americans still want to contribute to their favorite charities, churches, colleges, hospitals, etc. The goal for nonprofits must be to give their supporters ways to do so when money is tight. One primary way is through affinity marketing which enables consumers to purchase an ordinary product/service and automatically generate a contribution to their favorite nonprofits. Understanding the best practices to apply in order to achieve desired fundraising levels from affinity marketing is essential.

"Common Misconceptions and Mistakes"
In order to understand how affinity marketing should work, you need to understand what would contribute to a program failing. Specifically, there are many misunderstandings regarding affinity marketing which should be dispelled. They are:
  • The nonprofit has little to do with the success of an affinity marketing program, and if the nonprofit does actively promote the program, it may jeopardize their relationship with supporters. The nonprofit does have an important role in the success of an affinity program. It must be proactive in communicating the program and educating its supporters. Taking this initiative will not compromise its relationships with its constituents. To the contrary, a nonprofit that demonstrates its use of sophisticated strategies to raise funds is valued and respected more by supporters than one seen as inefficient and unaware of the latest methodologies and technologies to facilitate fundraising.

  • Affinity marketing programs introduce tax or regulatory hurdles. As with any activity involving contributions, nonprofits can be guided by their accountants and other financial advisors regarding how to set up a fully-compliant affinity marketing program which will not introduce adverse tax consequences.

  • An affinity marketing program can replace regular fundraising, capital campaigns, annual pledge drives, etc. Introducing an affinity marketing program into the mix is not the time to place other fundraising activities on the back burner. It is not a replacement; it's a tool that works on its own and in support of other fundraising activities.

  • It does not matter what products/services are involved in an affinity marketing program, nor does it matter what vendor is selected. The selection of an affinity marketing partner should hinge on the universal appeal, quality and cost competitiveness of its products/services. Beyond that, the company's shared values, customer service support and track record in affinity marketing partnerships with other nonprofits should be carefully considered.

"Best Practices for Affinity Marketing"
In order to gain strong results from an affinity marketing program, nonprofits should adhere to proven practices in the areas of program management and monitoring, partner selection, marketing and communications.

Start by designating an individual within the organization to serve as the affinity marketing program coordinator. This individual should be charged with initiating the search for the right affinity marketing partner, maintaining ongoing communication with that partner , making sure the program is being promoted effectively, and tracking the results of the program and sharing these findings with the nonprofit's management.

When selecting the affinity marketing partner, make sure its products/services fall under the "everyday, commonly-used" category (e.g., long distance and wireless phone service, Internet service, credit cards, insurance, etc.). Inquire about how often new products, upgrades and/or special promotions are offered and how the company's products are priced in comparison with competitive products/services.

In addition to being brand name products/services offering valued performance features, these products/services should be backed by strong warranties and sound customer service policies. In assessing the company's customer service, its customer service call center operation should be considered. Is it equipped with state-of-the-art voice and computer technology to facilitate customer ordering and tracking procedures? Does the company have a training program for its customer service representatives to assure that they are knowledgeable regarding its products/services, courteous and well-spoken? Does the company have reporting procedures (i.e., reports providing a breakdown of monthly or quarterly sales within various product/service lines) in place to help a nonprofit track the incoming revenues from the program?

It is also important that the affinity marketing company be evaluated from the standpoint of its fiscal stability, corporate infrastructure, caliber of staff in key positions, including senior executives in the areas of marketing, customer service and information technology. The company should hold similar values and have a corporate mission which includes the goal of helping to advance the missions of nonprofit organizations. Checking references of existing nonprofit clients who can share what their experience has been with the affinity marketing company is another important assessment measure.

To effectively launch the affinity marketing program and continually reinforce its importance with members/supporters, nonprofits should rely on multi-channel, "piggyback" marketing campaigns. The affinity marketer should be expected to help in the development of these campaigns, from providing advice on how to position its products/services for appeal to the nonprofit's donor base to offering creative ideas and marketing materials, as well as promoting the organization on its website. When working with the affinity marketer in this area, nonprofits should be candid in sharing their previous fundraising experiences and challenges, as well as offering a good overview of its donor base (i.e., demographics, sizes of gifts, seasonal shifts in contributions, etc.).

Affinity marketing program campaigns should educate, inform and motivate members/supporters with respect to the program; how it works, its products/services and how their participation will help the nonprofit achieve its goals. When promoting the affinity marketing program, all channels of media and communications should be used. This includes: the organization's website, blogs, social networking sites, newsletter, special events and networking opportunities, direct mail and advertisements. Within these communications there should be regular updates on how funds generated from the affinity marketing program were applied to fulfill various goals (e.g., to fund technology needs or a new program, towards the capital campaign to build a new wing, for an overseas mission to feed the hungry, build homes or provide medical care, etc.). On this note, the affinity marketing should be used to boost existing fundraising initiatives. It should be incorporated into communications about the annual gala, a capital campaign, alumni event, special fundraising drive to help victims of a recent natural disaster, etc. By continually projecting the program in a current, timely manner, its value is reinforced giving supporters greater reason to continue making purchases which will help the nonprofit.

Closing Remarks
An affinity marketing program is like a field of dreams except that, "If you build it, they won't come," unless you tell them about it...over and over again. This is definitely a case of you reap what you sow.