REALTOR® ASSOCIATION EXECUTIVE
Members’ Privileges: Better Affinity Programs
By Natalie Rivera
Part of our responsibility as Realtor® association professionals is to help members achieve profitability in their career. Discounts on products and services relevant to the real estate industry are a great benefit to your members’ pocketbooks. Whether you’re creating a new member discount program or revamping your current program, here are a few things to consider.
To make money ... or not
One of the first questions to ask yourself when creating an affinity program is whether you want to generate revenue for your association. You can charge vendors a flat fee for joining your affinity program, collect royalties for every sale an affinity partner makes to a member, or choose not to earn a profit at all. There are successful member discount programs based on both revenue and nonrevenue based models.
For instance, the California Association of Realtors®’ successful Member Value Plus program charges each vendor a marketing fee and receives royalties from each sale. On the other hand the Houston Association of Realtors® does not collect a profit from its program. Still, both programs offer great benefits, and program partners often become major sponsors of association events and projects. Choose the option that best fits the needs of your association. But if you’re a tax-exempt association, make sure you don’t generate too much unrelated business income from your affinity program. (For more on this tax issue, see REALTOR® Association Executive online: “To Profit or Not to Profit?,” Fall 2001.)
A committee of association staff or members can help you outline vendor criteria and review vendor applications. Consider the relevance of the product or service to members, the size of the discount, whether the company is already in the National Association’s REALTOR VIP® Alliance Program, and the reputation of the vendor among your members.
Consider those companies whose products and services are most relevant to Realtors® and their industry. For example, we all know how important automobiles are to real estate professionals, who practically live out of their cars. Some of our most popular affinity program partners are those that provide automobile services, such as car washes, lube centers, tire and battery stores, and even car dealerships. Other types of partners include technology, education, finance, insurance, promotions, and printing companies.
Make sure the vendor’s discount is significant enough that your members feel they’re receiving a true savings. In Houston, we require vendors to offer our members a minimum 20 percent savings, with exceptions made on a case-by-case basis (such as for car dealerships).
What’s in it for me?
In exchange for offering a discount to your members, vendors will appreciate your help in marketing through venues such as magazine ads, membership mailing list rental, trade show booths, and event sponsorship opportunities. Use tools such as your Web site, newsletters, e-mail, and flyers to communicate affinity benefits to your members. Also, don’t forget to promote and build on member discounts provided through NAR’s REALTOR VIP® Alliance Program. You can easily promote NAR’s vendors alongside your own, thereby offering even more savings to your members.
Bind the agreement
Ask your legal counsel to create contracts that define vendor and association responsibilities. Also, carefully consider the contract term. A term of less than a year may discourage your members from using the program.
Track your success
To determine whether your program benefits members, establish a way to track how many members take advantage of the discounts. Count the number of hits on the program’s page on your Web site, track the source of royalties, or ask vendors to log the number of calls they receive from your membership. Periodic member surveys or focus groups can also help you customize and improve the program.
Whether or not your association makes a profit, the best part of an affinity program is that it helps members save money. And that kind of service is hard to put a price on.
Affinity Agreements and the Realtor® Trademark
Realtor® associations may grant affinity partners the right to use the association’s name and trademark in promotions. For a guide to the legal use of the trademark and the license agreement you’ll need vendors to sign, see REALTOR® Association Executive online, “Providing Ancillary Services,” Winter 1996.
Natalie Rivera is the public relations coordinator for the Houston Association of Realtors®. She can be reached at 713/629-1900, ext. 328, or at email@example.com.