Affinity marketing can be defined as follows:

"The targeting and distributing of a product or service to a homogeneous audience. The homogeneity is based upon behaviour or a sense of belonging. This is often associated with membership of an organisation, club or institution. The greater the sense of belonging, the stronger the affinity."
 

Affinity Marketing
The Thesaurus provides the following words based on "affinity":

• Similarity
• Likeness
• Attraction
• Fellow-feeling
Marketing to groups where an existing affinity exists has been a growing global trend over the last few years. This is also referred to as closed-community marketing. It has been most evident in the case of financial services in general and insurance in particular. For example, sales of insurance products in the UK through affinity channels have increased from 2% to 20% in the past seven years and there is no indication that this growth is slowing down. Today in the UK, organisations as diverse as HSBC, Tesco, Marks & Spencer, The Post Office and Manchester United are successfully competing in this field.

Affinity Marketing in South Africa

  
As with most aspects of marketing, South Africa has not been slow to follow these verseas trends. Today one sees organisations as diverse as Clicks, the AA, Woolworths, Amway and Solidarity (the union) successfully penetrating the market. Due to the proliferation of brands currently available to the South African consumer and limited stock of media collateral, experts on the South African short-term insurance market believe that much of the future growth in the market will come from affinity marketing opportunities.


A Three-Way Relationship
The affinity lies with the owner of the affinity group and/or brand. Respect for the owner of the affinity as well as the members of the affinity group is therefore of paramount importance. No communication takes place without the express approval of the
affinity owner, or as we have termed it above, the affinity custodian. The affinity custodian's biggest contribution is normally its client or member data. This raises issues of data protection and data privacy. All relationships are protected by NDAs (Non- Disclosure Agreements) and SLAs (Service Level Agreements). Extreme care is taken at all times to protect this extremely valuable asset.

Financial Administration
All the required systems are already in place between Telesure and IE Marketing to manage
premium administration, collection, income distribution and statements, etc. Management reports are
circulated to affinity partners on a weekly basis, such as:
  • Channel response
  • Campaign response
  • Quotes
  • Sales
  • Cancellations

Investment by the Affinity Custodian

IE Marketing offers an almost zero-cost, low-risk business
opportunity.

Capex
Research & Development
Hardware
Software / Licenses
Additional Human Resources

NIL
NIL
NIL
NIL
Account Manager

Return on Investment (ROI)
Since the investment by the affinity partner is so low, the ROI is almost impossible to calculate. Actual revenues are influenced by numerous variables (for example, the overall size of the closed community, the core potential within the base, conversion rates, average premium values, et cetera). For current affinity partners the additional income derived is normally extremely attractive, bearing in mind the limited input required to generate it.