More for your money: frat group leverages its clientele - Buying Power - Alpha Phi Alpha's 'Value Added Services' Corporate Partnership Program - Brief Article

Black Enterprise, May, 2002 by LeeAnna Jackson

We understood that we had a product we could sell and that product was our members," explains Elvin Dowling, director of logistics and the coordinator of Alpha Phi Alpha's, "Value Added Services" Corporate Partnership Program. With 80,000 active members and quantitative demographic information, the men of Alpha Phi Alpha, a predominantly African American fraternity founded at Cornell University in Ithaca, New York, in 1906, are capitalizing on their collective buying power.

"Based on a member survey, we [found that] 65% of our membership operates on a median income of $125,000. You're talking some serious buying potential," Dowling exclaims.

Attorney Harry E. Johnson Sr., the current president of the fraternity, initiated and developed the program after similar models used by AARP, (formerly known as the American Association of Retired Persons) and the National Bar Association, in an attempt to expand and enhance the fraternity's membership services initiatives while striving to reclaim and retain members.

It urges service and consumer-oriented companies to court members of the organization by offering a number of benefits: promotional discounts and incentives with online investment services, travel accommodations, and family entertainment, as well as valuable savings on hotels, airlines, and car rentals. In turn, it has created an opportunity for corporate partners to build lasting business relationships. "We approached the corporations by demonstrating that we have a market they would definitely want to tap into," Dowling adds.

The fraternity has received $275,000, this past year, in in-kind contributions and cash rebates from sponsoring companies including Ameritrade, BLACK ENTERPRISE, and Disney Club. "Why not do business with people who have our interest at heart? We're already spending money with these companies, why not ask them to rebate some of this money back to our membership and our organization?" says Johnson.

Ameritrade, for example, waives the $2,000 minimum required to open an account for members of the fraternity. They offer members $50 toward investing and $40 toward an Internet checking account. The fraternity gets $50 to invest as well. "We raised $20,000 with Ameritrade last year," says Dowling. These monies go toward the fraternity's educational fund.

Johnson's goal for 2005 is to have 50 corporate partners on board. They have partnered with 15 thus far. One partner Johnson hopes for is Student Advantage, which offers college students discounts on everything from books, Amtrak, and U.S. Airways tickets to fees for graduate school placement exams. While this program is available to most college students, if the partnership is solidified, the fraternity members will not have to pay the $20 annual fee. Javier Gutierrez, a political science major at UCLA and an Alpha Phi Alpha fraternity member for the past three years, plans to take advantage of this extra bonus. "Brothers who are going to class everyday just need the simple things like CDs and books. I got offered a free cell phone through Sprint PCS as a result of the value-added services. Now I get 7% off my bill every month," he says.

The program can be applied to any organization. If you believe your members could benefit, follow these procedures:

* Understand the dynamics of your organization. A demographic survey spelling out who the members are and what resources they have is helpful. Also include questions about their buying patterns.

* Pinpoint possible corporate sponsors. Try to identify companies that have a program that focuses on obtaining and maintaining minority customers. Then identify the contact. It is usually the director of sales and marketing, vice president of corporate affairs, or vice president of diversity.

* Package your organization. Put together a comprehensive prospectus defining your program and then sell it. Impress upon your potential corporate sponsors the volume of business you will bring to their companies.

* Define what you want. "If you don't ask for it, you won't get it," says DoMing. Promotion costs include money for printing and mailing your value-added service guide. Ask the sponsors for marketing support. It may be within the company's budget.

* Orchestrate a win-win situation. It is important to understand the impact of providing tens of thousands of customers will have on a business. These customers will most likely turn into regular patrons. "It's much bigger than getting your members a discount," Dowling adds. "You also need to be thinking [about] how you can affect the organization's bottom line."