Too many brands view affinity marketing as the customer acquisition equivalent of a 'get rich quick' scheme, according to a report from information services firm, Experian.
The report's author, Nick McCarthy, director of decision management for Experian's integrated marketing division, said that a well planned and executed affinity marketing campaign can enable non-competing companies to share customer data and insights to open up new opportunities by identifying customers who are likely to want their products.
Lacking insights and purpose
In research from the Future Foundation, half of the UK's consumers viewed marketing offers as being less intrusive if they came from another company that had close ties to one with which they already dealt.
But McCarthy argued that many companies are failing to apply marketing common sense to affinity programmes and some brands are regularly entering into affinity marketing relationships without any clear long term strategy or objectives. From a lack of segmentation to limited shared insight, such affinity marketing projects are likely to result in failure or - at best - a very limited return on investment (ROI).
Some of the affinity marketing pitfalls cited in the report include:
- Not choosing the right partner - from not understanding whether each other's marketing strategies are complementary, to having wildly different cultures and customer bases.
- Failing to assess the commercial opportunity - for example, not running detailed "headroom analysis" to identify customer overlaps or even having unrealistic shared goals for the programme.
- Failing to have affinity marketing programmes as part of the companies' central 'business as usual' marketing strategy, which creates an isolated silo with little or no visibility within the rest of the business.
- Not agreeing a unified channel and contact strategy - for example, neglecting to use critical preference and eligibility data for marketing offers, as well as wasting vital marketing budget on duplicated or contradictory offers.
- Not creating a closed-loop marketing process by failing to produce management information reporting on the campaign, and by failing to take further actions based on the results.
According to McCarthy, a key problem is that too many brands view affinity marketing as a 'disposable' marketing tactic. This is particularly ironic because brands invest, on average, 20% of their marketing budgets in affinity campaigns. The brands that succeed are the ones that can identify which other brands their existing customers will respond to, and then invest in carefully planned long-term growth strategies.
The cost of getting it wrong is high, McCarthy warned: "It's a false economy and, for the consumer on the receiving end, it's just more unwanted junk mail. Brands must realise that they need to drive affinity marketing from within their marketing department and align it with a set of common business objectives. Our report offers guidance on how to get it right first time."
The report, entitled 'Everybody is Somebody's Customer', has been made available for free download from Experian's web site - click here (free registration required).