Tapping Into Association Marketing

Americans are joiners — nine out of 10 belong to at least one group or association, such as the American Automobile Association and the AARP, and these groups provide a potent mechanism for developing, marketing and distributing a host of products and services. For associations, new product offerings provide additional revenue and help attract and retain members. For companies, associations help leverage marketing efforts, allow access to exclusive association channels, and encourage tailored product developments.

In a recent working paper, “Marketing To and Through Associations: A Descriptive Analysis and Research Domains,” authors Abhijit Roy, assistant professor of marketing at the Sellinger School of Business and Management, Loyola College, Baltimore, Maryland, and Paul D. Berger, professor of marketing at Boston University’s School of Management, claim that there is a dearth of research in the field, and they introduce conceptual frameworks to help create strategies and marketing approaches to the increasingly important association audience.

The authors cite the success of branded affinity credit cards as evidence of the power of marketing to associations. For example, Visa USA discovered it could get a response rate of 3% to 8% pitching association-based cards, far higher than the 1% to 2% for standard credit card offers. Association-based cards now account for over a third of the market — jumping from 20.8 million cards in circulation in 1990 to over 250 million in 2002. Roy and Berger also cite the impact of association marketing in the insurance industry — Travelers Property Casualty of Hartford, Connecticut, whose single largest affinity customer is the AAA, predicts that by 2010 association marketing activities will bring in 20% of its total premiums.

Roy and Berger contend that, in order to market to associations effectively, marketers must first understand the motivation, structure and environment in which these associations operate. Taking cues from modes of existing social science research, the authors infer that understanding the importance of a member’s commitment to an association is essential. Citing a 2000 study that concluded that behavior within associations is connected to the members’ commitment, the authors suggest that how members perceive their group’s unique qualities, social status and size each affect the strength of the members’ affiliation and thereby their receptivity to association-related marketing.

The authors propose frameworks for analyzing association structures to understand how embedded group dynamics affect responsiveness to marketing pitches.