Association and affinity group leaders who are looking to attract and retain members in a tight economy can find it challenging. While people join association and affinity groups for a wide variety of reasons, a MetLife study, The Affinity and Association Marketplace: Expanding Business Opportunities by Understanding Member Preferences by Association Type,1 finds that recommendations from friends, family and colleagues appear to have the greatest influence over a person’s decision to join.
So not only is it important to maximize the member experience to retain current participants but favorable word of mouth can help drive growth.
One-third of association and affinity group members reported being receptive to obtaining insurance through their primary association, yet only 14 percent reported having actually obtained insurance through this channel. This gap highlights a business opportunity.
Potential Ways to Increase Perceived Member Benefits
Not surprisingly, people who are interested in acquiring insurance through their association or affinity group cite rate advantages as the main reason. However, there is also a value to the membership of knowing that an insurance product has been vetted by an organization’s leadership. Communicating the advantages of the special rates and the efforts undertaken to make the offering available may help pique interest.
Some insurance products are currently more popular in this channel than others. The top insurance products currently sold in this marketplace are liability insurance, disability insurance, and accidental death and dismemberment. However, it appears that members who are interested in obtaining insurance through these affiliations are most interested in obtaining life insurance, health insurance and automobile insurance. Again, the differences between interest and access can spell opportunity.
Opportunities and Challenges
While there are some general concepts that apply to the affinity and association marketplace, the truth is that these groups are diverse, and some types of groups are more receptive to buying financial protection products than others. But even for some of the more “challenging” situations, having customized tactics and a deep understanding of the marketplace can help convert potential customers into actual purchasers.
The MetLife study looked at eight different association types—unions, credit unions, lobby/political associations, professional associations, government associations, alumni groups, special interest/social/recreational groups and affinity groups—each of which exhibit a distinct set of membership preferences. These insights help to highlight the challenges and opportunities in bringing financial protection products to the membership of each.
As a result, the MetLife study categorized the targets into three groups: prime targets, targets with educational challenges and targets with the highest hurdles.
Prime Targets: Unions, Credit Unions and Lobby/Political Associations. These groups report a combination of higher than average interest in insurance products as well as moderate to high access to insurance products via their association and affinity group. For instance, 48 percent of union members express interest in purchasing insurance products through their association. Interest is also high for political association members (45 percent) and credit union members (40 percent). The high interest and high access are likely indicators of an engaged and active membership. According to the research, it appears the greatest opportunity for the brokerage community lies with these prime target groups.
Targets with Educational Challenges: Professional, Government and Alumni Groups. These groups currently have high access to coverage and report moderate levels of interest in purchasing insurance through their association. Approximately one-third of members in these groups would like to obtain insurance through these relationships.
Targets with educational challenges represent the second greatest opportunity in this market, as an insurance representative can partner with the group to modify the existing product portfolio as well as increase product promotions, thereby heightening member education and interest in the offering.
Interestingly, alumni group members have a high number of recent graduates who therefore may be first-time buyers that need more guidance about their product buying decisions and tend to retain their membership for decades. Therefore, products that appeal to diverse life stages may be particularly appealing to this segment.
Targets with the Highest Hurdles: Special Interest/Social/Recreational and Affinity Groups. These groups may be a challenge to insurance professionals due to members’ reported lower levels of interest in insurance products. However, affinity group members do express expectations that their membership in these groups will provide access to discounted products and services in general.
To make a mark with targets with the highest hurdles, some creativity around product offerings, as well as the need and value of insurance products will likely be needed. Additionally, affinity groups typically have large membership populations, thereby providing a powerful opportunity for member segmentation that can in turn drive the success of the program.
Member Communication Considerations
Like any successful benefits program, effective communication is key. The diversity of members in both association and affinity groups demands a multi-channel communication strategy. Many association members prefer direct channels for learning about their association insurance offerings, through the mail (39 percent) and email (27 percent). When it comes to enrolling for coverage, people expressed a preference for paper applications via the mail. Not far behind is a preference for enrolling through an association’s website. For service of the coverage, however, direct contact is preferred—40 percent of members prefer to work directly in person with an agent.
In targeting the association and affinity market, clearly a one-size-fits-all approach will not work. Rather, tailoring the insurance products to a given association/affinity group’s membership, along with the preferred communication channel and methods, will be a better formula for business success.
Association and affinity group leaders are focused on retaining members and attracting new prospects to their organizations, often by increasing the value of membership. In light of economic challenges, the idea of financial protection has gained appeal. Providing membership access to discounted insurance products they will appreciate, at little or no cost to the organizations, can help both the members and the administrators meet their needs and objectives.
1. All statistics, and other facts, provided in this article are based on the results of the study conducted in conjunction with “The Affinity and Association Marketplace: Expanding Business Opportunities by Understanding Member Preferences by Association Type,” a white paper written by MetLife. To contact the members of various association and affinity groups, MetLife worked with Ipsos to conduct an online survey. A total of 3,700 interviews were completed between late September and early October 2011. The research targeted a representative sample of the general population and members across eight key types of associations.