Find a partnership that works

Affinity partnerships are becoming increasingly important in a demanding business environment where traditional growth models are often no longer effective and extremely costly. Today, organisations recognise that success can be derived from combining their own core strengths with those of others. Successful and sustainable affinity partnerships ultimately add real value for customers and allow companies to distinguish themselves from their competitors.

Working with the insurance industry to provide cover for members in an affinity partnership also means that an organisation can help its members by identifying and helping to manage risks facing their business.

But how do you decide if you have an appropriate customer or membership base and how do you go about setting up a programme?

Why consider an affinity partnership?

Developing an affinity programme can help organisations achieve their business objectives, including:

• increased profitability

• increased customer loyalty

• competitor differentiation

• increased brand value.

Both your existing and potential customers or members are more likely to perceive a product offered under your own brand as being competitively priced and tailored for their needs. Subsequently, your chosen partnership could improve the image of your organisation by your customers or members. You could provide added value services and benefit from the development of increased revenue sharing opportunities for your organisation.

Five steps to success

While any organisation may have the potential to trade affinity products to its customers, our experience shows that not all will be successful. In order to develop a successful product five key elements need to be in place.

1 The number of end users needs to be sufficient to generate a reasonable income from the collective premium.

2 A high degree of trust and respect should exist between an organisation and its customers or members.

3 The organisation should have clear objectives or goals in offering any product or service.

4 Customers or members should have an expectation and understanding of what is on offer.

5 Any offer made must be in response to the specific needs and risks of the members.

Once these key elements have been identified and agreed, you will then need to choose an appropriate insurance provider to partner with.

The right partner

The right partnership is imperative. Selecting a partner whose objectives and competencies tally with your own is the first step to a successful and sustainable partnership. You should speak to an intermediary that specialises in creating, managing and administering affinity schemes.

The following points are the secrets of a winning relationship and should be thoroughly considered when choosing a partnership.

Your end users Whether it is your customers, members or even employees, the end users of your affinity product are your most important asset. Your affinity partner should take the time to truly understand them and their individual needs.

Your product Based on their findings, your affinity partner should create bespoke insurance solutions that encompass your customers' or members' specific needs. These solutions should be exclusive to you. They should also negotiate the widest possible cover at the most competitive premiums. Branding and marketing of the product should be created in partnership with you to compliment your existing marketing activity and branding.

Added value services In addition to tailored insurance solutions, some affinity partners offer added value services for your end users, such as helplines, business assistance programmes, fact sheets and so on. These can provide excellent support to your end users and can increase sales if the services are seen to add value.

Financial Services Authority member It is recommended that you look for an affinity partner that is a member of the Financial Services Authority (FSA). The FSA provide added protection to you and your customers or members by regulating the general insurance industry to a high standard.

Supporting you

To ensure a successful working relationship, your affinity partner should give you support, advice and guidance throughout the term of your partnership agreement, including open and honest communication at all times and regular review meetings.

A proactive approach to marketing your product is also of the utmost importance. This includes monitoring the competition to ensure your product remains at the forefront of those available in the market and that your competitive edge is maintained.

These affinity insurance schemes potentially allow your organisation to offer insurance as an additional membership or customer benefit. They also present a valuable income-generating opportunity through sharing commission earned on income generated by the scheme, with no costly investment in staff or technology.

So what are you waiting for?

Ed Huston is development manager for Aon Affinity Programmes, www.aon.com