Affinity Marketing - Development of Affinity Marketing

Development of Affinity Marketing

Modern affinity marketing traces its roots to the late 1970s when credit card interest rates were skyrocketing. America's largest consumer association at the time, the not-for-profit American Automobile Association (AAA), partnered with MasterCard to offer AAA members a branded credit card with lower rates and special privileges. AAA boosted its members' loyalty (affinity) and received revenue shares from MasterCard. The AAA program expanded to include other card issuers and remains one of the associations membership offerings today.

The concept boomed in the 1990s when credit card companies partnered with charities and sports teams to provide consumers with a branded credit cards. The organizations benefit from increased brand loyalty and brand awareness and a boost to revenues; typically through a combination of fixed commission for each new card and a share of transaction volume on the cards. The credit card company meanwhile benefits from increased revenue, generated by more customer accounts and card usage.

Affinity marketing has since been evolving far beyond its original remit; most commonly in direct marketing, in what is termed as a second affinity boom through the use of data and customer contact lists. Within this context for example, a famous car repair chain recently partnered with a well-known insurance company and was able to mail the insurance company’s database to offer a unique benefit, in this instance 25% off a car service. This gave the insurance company’s customers access to a competitive deal unavailable to the mass market, whilst the car repair chain benefited from access to hundreds of thousands of car owners they would otherwise not have been able to mail.