Former DRTV Exec. Launches Internet Affinity CompanyDrawing on his experience as an affinity marketer with National Media and other direct-response companies, Michael Salaman has come up with an affinity marketing strategy for the Internet age.
Through his 8-month-old startup, iConnect.com, New York, Salaman, 37, founder and CEO, is helping to create a new generation of private-label Internet service providers and portals that would appeal to specific consumer groups. Salaman is marketing affinity ISPs to companies, organizations and nonprofit groups that already have large databases of established consumers or members.
"As the Internet has evolved, it's become a subscription-based business model, where connectivity is a commodity," said Salaman. "We see an opportunity to bring value to this model by offering communities of individuals - whether they're with an organization, a group or are interested in a specific product - more than a simple dial-up connection to the Internet."
Affinity membership clubs really took off with the launching of home shopping networks and infomercial marketing in the '80s, Salaman said, an industry that he participated in as a member of the management team of National Media Corp.
"Marketing more products to already-identified customers of a particular product was the key, whether they were interested in health, travel, legal, automotive. Membership marketing is a powerful marketing tool," he said.
"What iConnect is doing is creating a private area for customers of a particular company or organization to access Internet services," said Alden Levy, chief operating officer. "It's another branding opportunity for a marketing partner, in that they can hammer home their brand name, the brand's identity and any other marketing points they want to get across in an environment that already is receptive to this kind of relationship."
The first organization to take advantage of the affinity ISP strategy is the Vatican Treasury Museum, which launched the Catholic Families Network Oct. 7. iConnect.com is handling the direct marketing of the new ISP through outbound telemarketing, direct mail, radio and direct-response television ads.
These private-label or vanity ISPs are "definitely a growing trend as ISPs try to differentiate themselves from the competition," said Joe Laszlo, an analyst with Jupiter Communications, New York. "This is an opportunity for a marketer to develop a deeper relationship with their customers ... a bank or financial institution might like to do a private-label ISP as a way of providing a 'thank you' to loyal customers, for instance. This approach may not be right for every brand, but brands that are lifestyle or technology oriented are well-positioned to take advantage of these marketing opportunities."
Affinity ISPs can offer users products, services and information, which iConnect calls MemberFuel, designed to turn any Web site into a full-service membership club, the company says.
"MemberFuel is a catch-all for incentives, savings, discounts, exclusive member-only benefits, from online and offline sources, that we provide as a reward for subscribers to stay with us," said Salaman. There will be ongoing subscriber acquisition and retention programs, keeping existing subscribers active in using the site as well as providing incentives to remain with the ISP.
"A lot of companies already have web sites, but this gives a marketer an opportunity to offer their customers something that identifies that customer further with that organization. Much the way MBNA America Bank N.A. revolutionized credit card marketing, we're looking to do that online," Levy said.
Organizations and marketers, which iConnect calls "marketing partners," pay nothing to have iConnect set up the site, provide local dial-up phone access via an agreement with UUNet and provide original content. The participating company or organization would receive 2 percent to 10 percent of revenue generated by monthly subscription fees as well as outside advertising placed on the site.
iConnect plans to charge the market rate for ISPs, about $19.95. iConnect also can provide value-priced, customized, affinity-labeled PC's as part of its Internet access program. The company has its own news and information staff in-house that will provide the proprietary content that will run on each marketing partner's site.
"This is news and information about the organization, about the brand, that (these individuals) can't get anywhere else," Levy said.
iConnect.com will handle marketing of the ISPs through direct mailings, telemarketing, online advertising and targeted e-mail; marketing partners can attached taglines to offline advertising, such as TV and print, promoting the new ISPs, Levy said. He declined to put a price tag on the advertising budgets aimed at wooing individuals to the affinity sites.
"We're proven affinity marketing methods," says Salaman. "We're just moving it to the Internet."