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. These include how and why associations are organized, the various archetypal groups they form, and the “structural features and social processes” that make up and motivate an association. The authors suggest several paths for future research on the basis of leadership-member theory, which proposes that association leaders exchange socially and economically in different ways with lower-ranking members than they do with one another, or on the basis of network-exchange theory, which provides insight into how consumer behavior is strongly connected to its social context.

The authors categorize associations into professional, common interest, cause-based and demographically based groups, as well as marketer-generated groups, which are usually focused around a specific product, brand or retail store (such as Harley-Davidson Inc.). These categories can be further broken down into “identity” and “interest” subsets: Professional associations allow members to reflect on their work identity; demographically based groups allow members to reflect on who they are as defined by physical and social characteristics; common interest groups allow members to focus on favored activities; and cause-based associations allow them to focus on their social concerns. Within each subcategory, there are different reasons for joining — to network, for education, advocacy for issues, a search for identity — as well as different membership profiles. Through these increasingly specific classifications, researchers can help businesses better develop, segment and manage their marketing efforts, tailoring specific approaches to a specific group profile.

Roy and Berger advise marketers to acquire a greater sense of how societal trends, voting patterns, civic participation, race and social class affect association membership and participation. For example, they cite a study showing that African-Americans are twice as likely as Caucasians to be association members, especially at lower income levels. The authors also suggest that technology and business trends, such as use of the Internet, have a significant effect on association-based marketing strategy. Of particular interest to marketers seeking to introduce innovative new products, the authors suggest that the structures and “cultural underpinnings” of different types of association may affect how quickly new ideas spread throughout such organizations.

For more information about this, contact Berger at pdberger@bu.edu.