About 20 years ago, I came across a theoretical approach that I have applied to solving the marketing challenges that I faced. It was so effective that it has driven my membership marketing consulting ever since.Today, I want to briefly share this conceptual approach with you and then I want to spend most of our hour together applying this theory to real world membership challenges that you and I face every day.
Just like in healthcare (blood pressure, weight, pulse, temperature) associations have vital signs that can be measured and there are normal and abnormal ranges. They provide a BASELINE to identify problems – NOT a full diagnosis. That may take more analysis of your data and situation. So often I meet with organizations that focus on the wrong part of their membership challenges. Example – Focused on engagement when they have a declining membership and a 91% renewal rate and a 10% market share – need recruitment focus.Example -- Focused on recruitment when they have a 60% member renewal rate – need engagement focus. Example – Focused on engagement when they have a 15% response rate on their reinstatement program – need renewal focus.
So where do we find membership vital signs. You can keep track of your own data, but it also helps to compare with other organizations. I recommend the Membership Marketing Benchmarking Report as a source and will use it here.
Vital sign #1 – Is your membership growing? 52% of respondents say membership has increased over the past year.
Vital sign number 2 – Do you have above average or lower than average renewal rates? • The average renewal rate for individual membership organizations this past year was 78% and the average renewal rate for trade or organizational memberships was 85%. How do the renewal rates for your organization compare?
Vital sign number 3 – How are your new members conversion rates?• The average first year member renewal rate for individual membership organizations this past year was 67% and the average first year renewal rate for trade or organizational memberships was 75%. How does your organization compare?
Vital sign number 4 – Is the usage of your products and services and services increasing (best measure of engagement)?Intuitively, we all know that members using the associations services is good, but seeing the statistics to support it highlights the critical nature in the membership lifecycle of member engagement. What we found is that usage had a very strong correlation with many key membership statistics. Organizations that reported a higher level of usage where more likely to say that they experienced better outcomes in their membership results. With each of these behaviors, a higher proportion of membership usage correlated with an: • Increase in overall membership over the past year• Increase in overall membership over the past five years • Increase in new members over the past year• Increase in renewal rates over the past year
Vital sign number 5 – Where is your market penetration?
If you have trouble tracking some of these key indicators for your organization, please let me know and I can provide you with the Membership Marketing Dashboard that we recommend to our clients.
Based on the vital signs that we have looked at, what are your biggest challenges in your membership system?
Now comes the fun part of identifying “HIGH LEVERAGE SOLUTIONS” to your membership marketing challenges.
Let’s say that you feel awareness is your biggest challenge. What might be a strategy to help in this area?
If you are trying to build awareness through traditional print advertising, you may be missing the boat. Much of awareness advertising dollars is shifting to digital advertising.
I am sometimes surprised that organizations do not have a recruitment plan – or it is so complicated they never executive it. Here is a tool to put a plan together in very rapid and useful fashion. Example, you can probably put former members in at the top of your market segment pyramid and can use a full portfolio of channels to reach them.
Take full advantage of the channels available to you.
Special deals really do work.
Many organizations sub-optimize results by not testing and tracking by up to 1,000%.
One client has gone from 39,000 to 270,000 members. The highest leverage tactic they have used to achieve this growth is a robust testing program. They test everything.
Relevant communications are key. Don’t overwhelm members with volume of communications that do not apply to their interests.
Organizations that have between 7 and 15 contacts in their renewal series were more likely to see their renewal rates increase over the past year (40.9% to 29.1%).
Organizations that start their renewal efforts five months or more BEFORE expiration were more likely to see an increase in renewal rates over the past year (25.7% to 19.8%).
Research showed that the $225 price tag for dues was an impediment for members – who paid dues out of their own pocket -- to join.So we built a head to head acquisition test for this organization. The control offer with the $225 price went to 37,640 prospects and the same package offering the additional option of an automatic credit card payment of $18.75 a month went to 37,623 prospects. The control package generated 436 new members for a 1.16% response rate. However, the test package with the installment option produced 657 members for a 1.75% response rate. The next question was how will members who select the monthly installment renew compared to members who pay up front. Our latest data reports on members who renewed on time. The on time renewal rate for members NOT on the installment plan is 55.7%. However, the on time renewal rate for members participating in the installment plan is 82.0%. The non-installment member rate will probably rise to 70% when late renewal payments are included. But even when late payments are included, a potential twelve point lift in renewals is a major improvement.
Associations who say that they “continue indefinitely to contact lapsed members” are more likely to have renewal rates over 80%, have seen membership increase in the past year, have seen membership increase over the past five years, and have renewal rates increase in the past year.
Diagnosing And Solving Membership Marketing Challenges - Tony Rossell-mgi
Tony Rossell Tony Karrer Presenter Moderator Diagnosing and Solving YourMembership Marketing Challenges Proudly Sponsored By:
Applying Systems Thinking to Membership Marketing “We tend to focus onsnapshots of isolated parts ofthe system, and wonder whyour deepest problems neverseem to get solved. Systemthinking is a conceptualframework … to make the fullpatterns clearer, and to help ussee how to change themeffectively.”Peter Senge, The Fifth Discipline
Finding Long-Term Solutions by Removing Impediments“Systems thinking shows that small, well-focused actionscan sometimes produce significant, enduringimprovements, if they’re in the right place. Systemsthinkers refer to this principle as ‘leverage’. Tackling adifficult problem is often a matter of seeing where the highleverage lies, a change which – with a minimum of effort –would lead to lasting and significant improvement. Theonly problem is that high-leverage changes are usuallyhighly nonobvious to most participants in the system.”(Senge, page 63-64)
Diagnosing Your Membership Marketing Challenges
Membership Marketing Vital Signs• Membership Growth• Renewal Rate• New Members Conversion Rate• Product and Service Usage• Market Penetration
What are the Vital Signs for Associations Today? 2012 Membership Marketing Benchmarking Report • Over 691 Participating Associations • Up Front Disclaimer What not Why Correlation not Causation Every Association is Unique • Fourth Year Produced by MGI
Is your membership growing? CHANGE IN MEMBERSHIP OVER PAST ONE YEAR—COMPRESSED 2012 2011 2010 2009 (N = 689) (N = 642) (N = 405) (N = 331)Percentage Increased Overall 52% 49% 36% 45%Percentage Unchanged Overall 16% 16% 14% 16%Percentage Declined Overall 29% 34% 48% 35%Percentage Unsure 3% 2% 3% 5%
What is your overall membership renewal rate? 3% Under 3% 2012 (N=685) 50% 3% 2% 2011 (N=643) 4% 2010 (N=403) 50% to 6% 59% 4% 2009 (N=337) 4% 7% 60% to 10% 69% 11% 7% 22% 70% to 23% 79% 21% 16% 38% 80% to 34% 89% 40% 37% 22% 90% or 23% higher 18% 29% 3% Not 2% sure 3% 4%
What is your retention rate for first year members? Under 50% 10% 50% to 59% 13% 60% to 69% 12% 70% to 79% 19% 80% to 89% 17%90% or higher 12% Not sure 18% (N=682)
What proportion of your members engage in the following areas EACH YEAR? AREAS OF ENGAGEMENT 1%- 6%- 11%- 16%- 21%- 31%- 41%- Over N 0% N/A 5% 10% 15% 20% 30% 40% 50% 50%Attend your annual conference/trade show 644 1% 12% 13% 11% 12% 11% 11% 6% 10% 12%Attend at least one of your professional development meetings 663 1% 12% 13% 10% 9% 10% 9% 6% 9% 23%Acquire or maintain a certification with your organization 666 2% 9% 6% 6% 5% 4% 3% 2% 8% 57%Attend at least one of your webinars 658 2% 15% 14% 9% 8% 6% 2% 4% 4% 36%Purchase a non-dues product (other than previously checked) 655 2% 18% 11% 9% 8% 8% 3% 3% 6% 33%Purchase a non-dues service (other than previously checked) 658 3% 17% 11% 9% 7% 6% 3% 4% 6% 36%Purchase or maintain insurance through your organization 658 2% 14% 5% 3% 3% 2% 2% 1% 3% 64%Purchase a book or directory 653 2% 19% 10% 6% 5% 5% 3% 2% 3% 46%Participate in your public social network 666 3% 25% 21% 13% 10% 8% 5% 3% 3% 10%Participate in your private social network 660 3% 20% 13% 7% 6% 5% 4% 3% 2% 38%Upgrade their membership 658 2% 16% 8% 6% 3% 1% 1% 2% 3% 58%Volunteer within your organization 664 2% 32% 21% 14% 11% 7% 4% 2% 2% 7%Donate to your association foundation or PAC 662 3% 23% 13% 6% 5% 2% 2% 1% 2% 42%Participate in your young professional program 656 2% 16% 8% 4% 2% 2% 1% 1% 1% 67%Participate in your mentoring program 661 4% 18% 5% 3% 2% 2% 1% 1% 1% 66%
What is the market penetration of your membership?• The average individual membership association has a 36% market penetration• The average trade association has a market penetration of 41%.
Awareness Strategy Strategic Process Landing PagesOnline Behavior Special Offers Online Media Product Searches FREE Whitepaper Paid Search Web Information FREE Trial Co-Registration Site Searches Membership Ad Networks Events E-Newsletter Online PR Releases Social Media Sign Up for Alerts Article Submissions Searches Blogs / Forum Posts Social Educational Social Media Ads Media Searches Sponsored Links Product purchases Leads Cultivated Through Ongoing Interaction
Example of Google Online Lead Generation Process Designed a PPC & Content Network Ads collection of WEF published articles Google gives you the into cohesive free ability to display your ads content. based on geography and time of day.Landing page with offer. Thank you page with more options.
Components of the Campaign If the prospect has not joinedThe Fulfillment Email from any of the previouscontains a link to components, a series of sent.download the free content Each email focuses on a differentand contains a benefit of membership.membership offer.
Example of Facebook Online Lead Generation1 Targeted Ad Placement. 2 Data Capture on Microsite. 3 Cultivation e-mail campaign with enrollment offers.
Example of Targeting through LinkedInLinkedIn allows you to deliver advertising only topeople with certain qualifications ortitles, people with specific job functions, and/orpeople specifying a particular skill set. •Title/Qualifications •Job FunctionThis makes the advertising spending veryefficient, and fast movers can also take •Skillsadvantage of the current low prices on theplatform. •GroupsLinkedIn Groups draw users back for longersessions, and this can be a great way to reachtargeted individuals while they are consideringbusiness issues and topics in the group setting.
Recruitment StrategyDefinition: The process of proactively inviting potential members to become a part of your organization in order to establish a long term relationship.Strategy: 1. The Target Market – who you want to reach – this includes determining what are your primary markets and acquiring or building lists of these prospects. 2. The Promotional Tactics – how a member will be reached – this includes selecting the best marketing channels like personal sales, direct mail, email, telemarketing, etc. and the frequency and timing of promotions. 3. The Membership Offer – what a member will receive – this includes how you package your membership product and what special offers you will make in your promotions to attract new members. 4. The Marketing Message – why a member should join – this includes proving your value proposition and presenting solutions and benefits to members that are compelling. 5. The Testing and Tracking – where to take future efforts – this includes trying variations of the four points listed above and recording which lists, offers, messages, and channels produce the best ROI and number of new members.
Recruitment Channels Personal Sales E-Mail Database Marketing MarketingGoogle Re- Multi-Channel Direct Mail Marketing Marketing Marketing Search Engine Telemarketing Optimization (SEO) Social Media
Recruitment Offers Special Offers• A first year dues discount.• A "no-risk" or “no-obligation” offer with a “bill-me”.• A product voucher offering new members $75 to $100 in savings on any future product purchase.• Premiums (free gifts).• Offering more of the product (e.g., 15 months of membership for the price of 12).• A free trial offer membership.• Installment billing turns a $239 membership into an easy monthly payment of $19.91.
Recruitment Testing 35% BoostIdentifying a control Rate Package Type Response Green Card 1.12% Invitation .83%
Recruitment Testing 111% Boost35%Boost Improving the Control List Segment $75 Voucher Subscription Response Boost Young 3.46% 2.57% 35% Boost Physicians
Recruitment Testing 37% BoostBeating the control Package Type Response Rate Green Card 1.35% Membership Card 1.85%
Engagement StrategyDefinition: The process of moving members from observers into users of the products and services made available by your organization and strengthening their emotional, psychological or physical investment.Strategy: 1. Interaction – Member involvement and usage are the best levers for engagement. 2. Communicate Relevance – Providing lots of communications that are not targeted are relevant to a member can cause disengagement. Let behavior drive your communications strategy. 3. Score Engagement – Define the measurable behaviors that indicate engagement (i.e. transactions, website usage, email behavior, volunteering).
Engagement Research Very Little Difference BetweenNon-Engaged Members and Lapsed Members Members “who are not involved lie perilously close to former members in the overarching assessment of the value they derive from associations. If former members are thought to be dead, the uninvolved are close to comatose” (The Decision to Join, p 4).
Engagement StrategyData Analytics for one association on engagement.• Members who attended an association meeting in the past year were 19% more likely to renew than those who did not attend a meeting.• Members who attended four or more meetings were 30% more likely to renew than members who never attended a meeting.• Members who placed a product order in the past year were 28% more likely to renew than those who had not placed an order.• Members who upgraded their membership in the past year to a higher level of service were 12% more likely to renew.
Engagement Communication Targeted Monthly e-Newsletters • Deliver timely updates • Reinforce membership value and vision • Customize content by segment • Promote increased interaction • Certification • Publications • Events • Webinars • Track and respond
Engagement Communication Tracking and Responding I’m interested in certification information! Triggered Certification Email
Renewal StrategyDefinition: The process of confirming the value that has been delivered to the member over the past year and requesting the continuance of the relationship.Strategy: 1. Renew Frequency and Timing – Like it or not, people forget to renew. 2. Channels – Use all of the tools that are available to you for retention 3. Conversion – Typically, first year members are the least likely to renew. 4. Budget – Most organizations under-spend on renewals. 5. Payment – Offering automatic credit card or EFT renewal, turns renewals from an opt-in decision to an opt-out action. 6. Offers – This is highly debated, but some organizations have great success with giving incentives for early renewals. 7. Personalization – Adding personalized messages to renewal efforts like, “because of your membership, you saved $50.00 on your product purchases this year.” Or, “we had some success on the legislative issue you were most concerned about.”
Renewal Timing RENEWAL RATES BY NUMBER OF RENEWAL CONTACTS INDIVIDUAL MEMBERSHIP ASSOCIATIONS (N=356) 7 or more 1-6 renewal Renewal Rate renewal contacts contacts Less than 80% 49% 44% 80% or higher 51% 56%
Renewal Timing RENEWAL RATES BY START OF RENEWAL EFFORT INDIVIDUAL MEMBERSHIP ASSOCIATIONS (N=354) More than Three months three months Renewal Rate or less prior to prior to expiration expiration Less than 80% 51% 40% 80% or higher 49% 60%
Renewal Timing RENEWAL RATES BY END OF RENEWAL EFFORT INDIVIDUAL MEMBERSHIP ASSOCIATIONS (N=354) More than 1-3 months three months Renewal Rate after after expiration expiration Less than 80% 51% 43% 80% or higher 49% 57%
Renewal BudgetCase Study• Average dues rate of $95.• Nine part mail renewal program with supporting emails.• The incremental cost to service a member is approximately $24 per member.• Amount spent to renew each member from each renewal effort. Effort #1 -- $ 2.31 Effort #2 -- $ 4.05 Effort #3 -- $ 8.75 Effort #4 -- $10.24 Effort #5 -- $15.96 Effort #6 -- $10.15 Effort #7 -- $ 9.36 Effort #8 -- $ 20.54 Effort #9 -- $ 37.61
Renewal BudgetAnalysis• The last effort, they are spending over $37 to get a member to renew.• Is that too much?• Here is the math: (($37.61 + $24.00) – ($95)) = $33.84).
Do you offer any of the following renewal options? Installment renewal payments 46% 46% (monthly, quarterly) 46% 32% Multi-year renewals 32% 33% 26% Renewal bill-me 28% 28% 24% Automatic annual credit card renewal 24% 22% 22% Lifetime membership 25% Not asked in 2010 2012 (N=445) 22% Early renewal discounts 21% 2011 (N=440) 19% 2010 (N=246) Automatic Electronic Funds Transfer 15% 15% (EFT) renewals 10%
Reinstatement StrategyDefinition: The process of defining the where the breakdown occurred in the membership relationship and restoring former participants to a paid status. A “winback” or reinstatement strategy helps to reconnect former participants.Strategy: 1. Never Give Up on Lapsed Members – Lapsed members are almost always the most economical members reach out to for membership. 2. Develop Messaging – For many groups, former members are very likely to rejoin an organization, but messaging should be different than what is communicated to “never members” 3. Conduct Lapsed Member Research – When members leave they highlight a breakdown in the membership system. Conducting research to understand why members do not continue with an organization will impact all parts of the membership lifecycle
Reinstatement Strategy 10% We dont contact lapsed 11% members 10% 8% 22% 1 year after expiration 22% 24% 25% 13% 2 years after expiration 14% 15% 13% 10% 3 years after expiration 9% 6% 2012 (N=686) 6% 5% 2011 (N=641) 4 to 5 years after expiration 4% 6% 2010 (N=403) 5% 2009 (N=333) 1%6 to 10 years after expiration 1% 1% 1% We continue indefinitely to 31% 30% contact lapsed members 24% 30% 5% Not sure 5% 7% 7% 4% Other 3% 7% 6%
Reinstatement Strategy• Reinstatement programs test the effectiveness of your renewal program.• Many organizations are sitting on thousands of prospects just waiting to return.• Employ research and analytics to determine what went wrong for your lapsing members. – Under served market segments – Product and service gap analysis – Value proposition update
Reinstatement Systems Thinking "Look not where you fell, look where you slipped.“ (African Proverb)
Diagnosing and Solving YourMembership Marketing Challenges Questions? Tony Rossell Tony@MarketingGeneral.com