The Future Ain't What It Used To Be For Affinity Products
Are affinity products for associations a thing of the past? Or rather part of a future that looks very different?
Membership organizations have always offered third-party products to their members. This usually means a discount, sometimes bearing the association brand. Affinity products have served essential roles. They provide value to members, giving them a reason to join and renew. They also serve as a critical source of non-dues revenue. Associations could count on affinity products to boost membership and income.
No longer. Across the board, the old affinity product model is no longer productive due to market forces beyond associations’ control. As a result, what worked in the past works no longer.
Yet there is a solid and clear path forward for organizations that are open to change. For example, they can shift their expectations for affinity products from revenue to favor of member value.
The Decline of Affinity Product Revenue
- The affinity model is unwinding. Most associations have a basket of affinity products and services that contribute to neither revenue nor member value. But the leaders have re-evaluated their portfolios and eliminated products with low member value altogether. Instead, they now offer only high-member-value products regardless of revenue potential.
- Maximize member value. Revitalization often takes the form of drastic pruning. A successful affinity program focuses instead on a small number of “signature” offerings. These are products and services uniquely aligned with your mission. Members don’t want you to have it all. They want something that only you can offer.
- Marketers want a better deal. It is not that marketers aren’t interested in affinity product relationships, but they don’t want to pay for them the same way. The “products as revenue” model has given way to “products as member value,” which leads to more flexible deals to secure products members love. This means trading revenue for much better products. The new model is much more attractive to marketers. It opens up a range of offerings that would have been out of reach in the old-world royalty model.
- Better offers pay for themselves. Discounts are often one of the very top reasons members join and renew. We see more member engagement by attracting more exciting partners and offers, translating directly into higher member renewal. Even a modest uptick in retention can more than financially justify a loss in royalty revenue.
Affinity Products As Member Value Strategy
- The Right B2B Value Proposition. Organizations must find new sources of value for their commercial partners. Cooperative marketing programs, messaging to members in non-advertising channels, and exclusive access to data are all valuable in bringing new partners to the table.
- Meeting Unmet Member Needs. For the new model to work, associations must be selective about the offers they include. Explore the products, services, and perks that would appeal most to members and the partner brands that best compliment your organization.
To learn more about these market trends and how leading associations are responding, see Nonprofit Disruption: 5 Choices for Nonprofits and Going Back to the Basics in the Affinity Market.
