ABCs of Affinities

1. ABCs of Affinities

2. Roy Lamphier Vice President Insurance & Affinity Services

3. Two Capacities for the Detroit Regional Chamber: • The head of the affinity programs and healthcare initiatives at the chamber • Runs the National Commerce Group, Inc (NCG) which is a wholly owned subsidiary of the Detroit Regional Chamber.

4. FY 2012-13 Total Revenue for Insurance and Affinity • $8.8 Billion • The National Chamber Program has more than 800 affiliate chamber relationships built around its Office Depot program. It’s the largest chamber centric program of its kind. • In Michigan, roughly 100 chambers have a relationship with Blue Cross Blue Shield of MI. The Detroit Regional Chamber has roughly 70,000 employee and individuals enrolled in that program. The chamber also assists other chambers across the state in marketing and adding value to their individual programs.

5. The majority of our expenses are related to rebates and commissions paid to affiliates. Other major expense areas are in developing and maintaining systems and infrastructure to market and manage programs, overhead costs for 15 staff members who do nothing but market and support affinity programs and general advertising and promotional expenses to help grow the programs.

6. Affinity programs can do three things for chambers: • Add value to membership or solve a problem for our constituents • Drive new customer interactions • Generate additional resources to support the organization’s core mission

7. The biggest challenges chambers face in achieving results with affinity programs are: • Lack of time and attention to dedicate to programs • Limited program/product expertise • Insufficient resource to effectively market the program

8. Steve Millard, CCE President & Executive Director

9. COSE • Steve Millard, President and Executive Director • 14,000 Small business members • Affinity products offered • Health insurance • Shipping and freight • Payroll • Workers’ compensation • Energy • Office products • Goal of programs: To provide small businesses with resources and opportunities they are unable to access individually • Cost to access programs: COSE membership

10. COSE • Affinities vs. Partnership Programs: COSE’s journey • Past: Discounts on products for small business • Evaluation of purpose of programs • Products are commoditized and no longer drive membership – but, they can complement it • Products need to go beyond cost savings to add greater value to small businesses and differentiate COSE in the marketplace • Present: Shift from discount products to comprehensive solutions for small business • Identify partners (not just vendors) who create solutions and share COSE’s values and commitment to service for members • Case study: COSE Energy Program

11. Small Business Savings Programs Development of comprehensive set of tools and resources, including audits, grant dollars, consultation, access to vendor networks, and financing Providing savings to more than 12,000 commercial/residential accounts

12. COSE Considerations in the development of an Affinity Program • What is the goal of the program and how does it fit within your overall mission, vision, and strategy? • Should it drive revenue? Membership? • How much staff and resources do you/are you able to commit to the administration and development of the program? • Is there an opportunity to evolve the product from a discount to a comprehensive solution that eases a small business pain point? • What does an ideal partner/vendor look like? • How are they supporting the work of the Chamber? • Are they sharing your values, goals and standards with respect to the way they work with members? • How will you measure success?

13. Kenn Penn President and CEO

14. Who am I? • Kenn Penn, President/CEO • Associated with company since 1997 Who are we? • Located in Norfolk, VA • Serving members since 1992 • Owned and managed by chambers of commerce

15. What we do. • Create, manage, and administer benefit programs • Product selection • Vendors vetting & contracting • Marketing development & distribution • Delivery mechanism • members-SAVE® platform

16. Reach 60+ local chambers of commerce 23,000 members businesses 250,000 employees (estimate)

17. Available Programs • Office Supplies • Payroll & HR • Merchant Services • Telecommunications • Fleet card • Prescription Discounts • Hearing Program • Health Savings Account • Health Insurance* • Workers’ Compensation* *Available in Virginia only

18. Goal Enhance member value Reduce chamber staff workload Non-dues revenue Cost of Program Nothing for chambers Membership dues for each chamber member

19. Why Consider Outsourcing? • Expertise • Benefit programs are not core to chamber operations • Leverage shared assets • Chamber need not dedicate staff • Strength in numbers • Buying power

20. Considerations in the development of an Affinity Program? • Member competition • Is this affinity program competing with “my” members? • Support the greater good • Will the chamber allow program success? • Provide necessary access and communication with members • Actively support the program(s) • Does the chamber communicate with the “right person” • “Go deeper” than the local sales representative

21. ABCs of Affinities

22. Thank you for joining us! Enjoy the rest of your stay at the 2013 ACCE Convention in Oklahoma City!