LTC Marketing

Dealing With Affinity Groups

Affinity Long-Term Care Insurance cases can be very attractive and, over the long run, you should be able to provide outstanding service (and earn good income) by servicing the needs of affinity members for Long-Term Care planning.


However, affinity groups can be demanding, and the large affinity group market requires specialized knowledge and capabilities to be successful, which can entail a large investment.


We can provide flyers to explain LTCi affinity group issues to your affinity group contact.  Our flyers are customized for alumni groups vs. credit unions vs. chambers of commerce, as well as for general business-oriented and non-business-oriented association flyer, etc.  We can also help with marketing plans and proposals.


Affinity programs are those available based on common relationships other than being an employee of the sponsor.  Affinity programs include associations but sometimes can include affinities which do not involve a formal association. 


An affinity group must exist for reasons other than buying insurance, must generally have by-laws, officers and dues-paying members.  Insurers may require that the affinity group has existed for a minimum number of years and have a minimum number of members.


Generally, insurers will give a small permanent discount (e.g., 5%) to affinity group members, but will generally hold applications until a minimum number of members have purchased coverage.  The broker generally gets a lower commission rate (generally only in the first year but with some carriers, reduced commission rates can apply in renewal years), because the main beneficiary of the affinity discount is the broker, as the affinity discount makes it easier to secure clients.


Most business affinity programs (such as Chamber of Commerce) apply to members but not members’ employees (unless they also are members).  That can be problematic because it can encourage a member to buy outside the Chamber program, in order to help her/his business qualify for an employer-sponsored LTCi program for which her/his employees could be eligible or which might grant health concessions important to the member or member’s spouse.


Many agents and brokers have valuable affinity contacts but don’t have the tools or experience necessary to successfully negotiate and manage the account.  Fortunately, we can introduce you to strategic partners who bring the necessary expertise.  If you can get us an audience with a large affinity group, we have a good chance of being able to close a deal which can bring you on-going revenue without on-going work.


Having a trusted relationship with a key affinity officer is a great first step but taking a large affinity opportunity from contact stage to agreement to implementation to success can be time-consuming, expensive and fraught with pitfalls along the way.  Trying to resolve such issues can interfere with your day-to-day bread-and-butter operations, so it can be wise to form a strategic partnership with people or organizations which can supplement what you bring to the table.  We can introduce you to potential strategic partners.


The following issues discussed herein: the affinity group’s needs; the insurance carrier’s needs; negotiating a program specific to a particular affinity group; servicing wide-spread affinity members; and administrative requirements.


Any affinity that brings in a product to offer its members is taking significant risk.  Members may be offended by the product or the provider in any of several ways.  They may have had bad past experiences with the product or provider.  They may have read bad things about them.  They may feel that the marketing materials are misleading or that the sales approaches are too pushy.  They may determine that they can get a better deal outside the affinity group and wonder if the affinity group is ripping them off to earn a commission. 


Processing can also be unsatisfactory.  Was it clear how they could get the information they want?  Was it easy to access the information?  Did they have to go through a person or were they able to get the information in another fashion which they prefer?  Did they receive the information in timely fashion, and did it answer the questions they had?  Did they get personalized attention or were they lumped into a pre-determined classification?


When they were ready to buy, was the process ready for them?  Could they act on their decision promptly?  Did they get what they expected, when they expected it?


After purchasing, did they like the service?  What about at claims time?


Many of the above questions take on special meaning when applied to a specific contract, particularly something like LTCi which involves difficult education, a significant chance of being declined for coverage and somewhat vague long-term promises for which performance might not match expectations.  Products use technical language and tend to be complicated.


Because of these risks, affinity groups have to be very careful entering into a relationship to make any product available to their membership.  LTCi can inspire more caution than some other products partly because it can be harder to evaluate the risks identified above.  For example, how does an affinity group judge whether claims will be paid responsibly?  (If they run into claims fulfillment problems, they will be sitting on a powder keg.  Unlike other products they might promote, they could have years and years of sales before realizing that a problem exists.)


Furthermore, many affinity group staff are not familiar with LTCi.


The above risks make your expertise of great value to an affinity group.  Yet, you must have the characteristics, expertise and capabilities to protect them from their risks.


To succeed in the affinity market, you must have substance.  The affinity’s due diligence must conclude that your organization has the staffing, funding, administrative capabilities and integrity to allow them to rely upon you for long-term service.  You need references, including possibly previous affinity groups you have serviced (a typical “catch 22” that can make it difficult to break into this market).  (It can be good to service members of an affinity group individually, so those members can provide testimonials to the affinity group management; however, normal members in a large affinity group may lack influence.


You need to be able to demonstrate expertise, not just in your product, but also in how it is distributed in the affinity marketplace and how the process can be fine-tuned to fit a particular affinity’s profile.  Before agreeing to pay specific compensation to an affinity group, be sure to understand the services they will provide and whether you’d incur any charges for such services.  We’d be happy to discuss these issues with you.


It is also important, of course, to be able to project reliable sales and income for the affinity group, if the affinity group wants income (large affinity groups generally want income).  And you have to be prepared to deal with carrier problems such as leaving the LTCi business, slow policy issue, and price increases.


In addition to dealing with the affinity group relationship, it is important to be able to “sell” the affinity to the insurer (or insurers) which you would like to bring to the account.  Naturally, the insurers will be interested in the nature of the affinity group, its size of the affinity, the affluence of its members, how long it has been in existence, etc., much of which you probably know. 


However, carriers will also try to figure out whether the affinity group will be a successful account.   Hence, they’ll evaluate your affinity skills and capabilities and the strength of endorsement from the affinity.  They’ll be interested in the strength of the relationship between the affinity group and the member and whether LTCi is appealing to that affinity group.   Your experience with affinity business will be important to the carrier.  The insurer will want to see documents such as by-laws and a list of officers and may require that you submit a marketing plan.


Of course, the importance of impressing the insurer increases to the degree that you and/or the affinity might need special considerations, materials or other support from the insurer.


Knowing which carriers to present to which affinity groups can be valuable.  Which insurers are active in the business and have the support you will need?  Which products particularly match up to situations you’ll find among the members of the particular affinity group? 


Affinity groups differ significantly from one another.  Perhaps the most significant differences might be in size and geographic density of membership.  Larger and more geographically spread affinity groups are much more difficult to serve.  Age distribution, gender distribution, rural/urban, affinity bond, membership fees, etc. all vary.  What other products do they sell and do they have a relationship for insurance already?


Because of such variety, the same program and approach does not necessarily fit all affinity groups best.


When negotiating with the affinity group, it is important to understand what alternative offers they might receive and to be able to explain convincingly how your program is superior to such alternatives.  What features of your program should be emphasized and how will they appeal to the various people who might be involved in the affinity groups decision-making process?


As each affinity group is different, you’ll need the skill and experience to negotiate how responsibilities are split between you and the affinity group and, based upon fulfilling those responsibilities, how (much) the affinity group will be compensated.  Methods of communication (and costs of such communications) need to be agreed upon and the advertising messages and pieces must meet with the affinity group’s approval.


Clearly experience is critically helpful in handling the negotiations mentioned in the previous paragraph.  It is important to know what makes campaigns successful or not; to be able to reliably estimate costs and response rates and to be able to collect marketing campaign data to evaluate success and identify ways to improve future results.


Of course, it is critical to have multi-media capability to reach affinity membership and to be able to educate them about LTC and LTCi, including local LTC costs in the area they live.


To be successful in the large affinity group market, you must have web-site capability, including being able to make your site look like the affinity’s site.  You must have excellent creative material available (ideally generic information as well as company-specific information) accessible in various ways.


Your materials must be able to be labeled to have the “look” and name of the affinity group, at least for larger affinity groups.  Round-the-clock or at least extended hours call center capability can be important.  Ease of getting applications to prospects and getting them signed and returned (including help filling them out) is of obvious importance.


Don’t forget that affinity group sales tend to start slow and straggle in over time.  You must be able to track interested members and follow-up with them to build the kind of relationship that will produce on-going sales and referrals.   Sales can close many years after the initial contact was made.


Many agents and brokers have valuable affinity contacts but don’t have the tools or experience necessary to successfully negotiate and manage the account.  Fortunately, we can introduce you to strategic partners who bring the necessary expertise.  If you can get us an audience with a large affinity group, we have a good chance of being able to close a deal which can bring you on-going revenue without on-going work.


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