Affinity Programs: Casting a Wider Net to Gather Prospects

March 1, 1997

"We get leads that we wouldn't get on our own," says Lynn Fruth, CRB, broker-owner of The Danberry Co., REALTORS®, based in Toledo, Ohio.

Fruth is describing the benefits of belonging to an affinity program, a type of mutually helpful relationship with other businesses or membership organizations. Brokerages are increasingly plugging into affinity relationships. There are several types of such relationships. Some offer added revenue; others, reduced costs. Both are valued by brokers eager to bolster their bottom line.

The Danberry Co. has access to an affinity program through a referral network that it belongs to, PHH Network Services North America. The program generates new business for the brokerage by providing leads about sellers who are moving out of the broker's market area or potential buyers who are moving in. The Danberry Co. has six offices and 170 sales associates in northwest Ohio and southeast Michigan.

Even though The Danberry Co. has to pay a referral fee on each lead that results in a transaction, Fruth still sees the arrangement as a good deal. In today’s competitive market, he says, brokers need every edge they can get to boost volume.

"In the future, we're going to see more affinity programs," he says. "We're expecting to see a growing volume of business that'll have some sort of referral fee attached to it."

Here's how the program works for The Danberry Co., which does slightly less than 7 percent of its business through relocation. PHH has set up affinity relationships with several organizations and companies, including Amway. Any member of the Amway organization who's planning to relocate can get a rebate on brokerage services by using the PHH network. When an Amway member applies to PHH for services, PHH refers the name to a member broker, either in the town that the Amway member is moving from or in the town the member is moving to--or both.

When The Danberry Co. sells a house to a participating Amway member, it pays a referral fee to PHH. Part of the fee goes back to the Amway member as a rebate.

Although Fruth thinks affinity programs are of growing importance to brokers, he recently opted out of another affinity program through PHH--one in which American Airlines customers are awarded frequent flyer mileage points in exchange for using the PHH network for services. Why?

American Airlines doesn't fly a lot of people in the brokerage's market area, Fruth notes, and PHH requires brokers to spend money on promoting the program.

"We didn't think there were enough benefits for us," he says.

Walt Albro is a former senior editor for REALTOR® Magazine.

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