Membership Growth Principles


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Membership Growth Principles: Best Practices in Membership Marketing

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Membership Growth Principles

  1. 1. Membership Growth Principles: Best Practices in Membership Marketing Presented by Socious, Inc. and Tony Rossell Senior Vice President Marketing General, Inc.
  2. 2. Is There Hope?“Reflecting the economic turmoil of theindustries they represent, many nationaltrade associations based in Washingtonare hemorrhaging members who eitherhave lost their jobs, run a financiallydistressed business or said they need tospend their dwindling discretionary dollarson necessities rather than dues.”By V. Dion Haynes, Washington Post Staff Writer, Trade GroupsRegroup, Monday, December 15, 2008; Page D01
  3. 3. Growth in a Recession?The Upside of DownThe Upside of Down(Associations Now,February, 2009)focused on fourorganizations:•SHRM•ASCD•SME•Costco
  4. 4. Can your association be the solution?“When looking at marketing response datafrom a broad array of associations, a verydifferent story is emerging. It is a story ofindividuals and companies turning tomembership in associations for security,services, networking, and professionaldevelopment. This means that right now isperhaps the best time in recent memory toacquire new members.”Tony Rossell, The Upside of Down, Associations Now, February, 2009
  5. 5. Current Economic Environment Recent survey results from over 300 Associations:• 53% of IMO’s indicate a decrease in the number of members renewing of these 35% report a moderate to severe decrease.• 77% report no change or an increase in new member inquiries and 23% report lower member inquiries of these 22% report a moderate to severe decrease. Survey by Whorton Marketing and Research, January 12, 2009.
  6. 6. Wider Business Perspective“It is well documented that brandsthat increase advertising during arecession, when competitors arecutting back, can improve marketshare and return on investment atlower cost than during goodeconomic times.”John Quelch, Marketing Your Way Through a Recession, Harvard Business School,March 3, 2008
  7. 7. Baseball’s Five Tools of Success 1954 World Series Leo Durocher, said of Mays: "He could do the five things you have to do to be a superstar: hit, hit with power, run, throw, and field. And he had that other ingredient that turns a superstar into a super superstar. He lit up the room when he came in. He was a joy to be around."
  8. 8. How to be an All-Star in Membership Marketing1. The four areas of expertise you need for success in membership marketing: – Economics -- Why – Market -- Who – Product – What – Promotion – How1. Getting started applying the four tools of membership marketing?
  9. 9. EconomicsRenewal Rate• Renewal Rate measures the number of members kept over a given period of time -- usually during a fiscal or calendar year.• Total Number of Members Today (minus 12 months of new members) / Total Number of Members in Previous Year• Example: (105,000 – 15,000)/100,000 = 90% Renewal Rate
  10. 10. How long do members stay?Average Tenure• Average Tenure measures how long on average a member stays with an association.• Reciprocal of Renewal Rate: 1 – Renewal Rate or, 1 - .90 = .10• Example: Divide Reciprocal into 1, or, 1 /.10 = an Average Tenure of 10 years
  11. 11. How much are members worth?Lifetime Value (LTV)• Assume $100 / Year Dues and $50 / Year in Non-Dues Revenue · (Dues + Non-Dues Revenue) x Average Tenure = LTV · Example: ($100 + $50) x 10 = $1,500 LTVMaximum Acquisition Cost (MAC)• Assume Incremental Servicing Costs = $20 and Cost of Goods Sold = $25 · (Dues + Non-Dues Revenue) - (Incremental Servicing Costs + Costs of Goods Sold) x Avg. Tenure = MAC · Example: (($100 + $50) - ($20 + $25)) x 10 = $1,050 MAC
  12. 12. Where is membership headed?Membership Steady State• Annual New Member Input / Reciprocal of Renewal Rate (or Lapse Rate) Shown as a Decimal = Total Membership Steady State.• For example, 20,000 New Member Input / .25 Lapse Rate = 80,000 Total Membership.
  13. 13. Market• Serve a Market, Not a Product – Research your market – Build Database “Mindshare” of your market• Behavior is the best predictor for recruitment and retention
  14. 14. Potential Acquisition Market Segments Former Members Like Associations Subscribers Directories
  15. 15. Match Behavior“Prosperity, success and happinessat work encourage associationmembership, because associationsare where the winners meet in manyprofessions.”Arthur C. Brooks, PhD., Where the Winners Meet: Why Happier, MoreSuccessful People Gravitate toward Associations, The William E. SmithInstitute for Association Research, January 2008, page 13.
  16. 16. “Where the Winners Meet” Research
  17. 17. Market“To remain competitive, you mustfigure out how to keep yourcustomers longer, grow them intobigger customers, make them moreprofitable, and serve them moreeffectively. And you want more ofthem.”Don Peppers and Martha Rogers, Return on Customer
  18. 18. Product• Value proposition• Product Packaging – Product line extension (Don’t sell a “black” Ford)• Pricing – Maximizing revenue through the inelastic dues demand of membership
  19. 19. Building a Value Proposition What separates you from all Vision other organizations? ASAE’s Decision to Join -- research of 16,944 members andReward Relationship former members from 18 associations -- highlights these components of the membership value proposition.
  20. 20. Value Proposition“The message . . . Is that no company can succeed today by trying to be all things to all people. It must instead find the unique value it alone can deliver to a chosen market.”Treacy and Wiersema, The Discipline of Market Leaders, page xiv
  21. 21. Product Line Extension• Express Membership -- $29: online only services• Basic Membership -- $49: online services plus subscriptions to the monthly periodical and newsletter• Comprehensive Membership -- $89: basic benefits plus 5 association books shipped as they are published• Premium Membership -- $219: all of the above plus an additional newsletter, four additional books and a $100 professional development voucher• Institutional Membership -- $899: a package that includes one Premium membership and 10 Basic memberships
  22. 22. Pricing• MGI Conducted a major Dues Increase Study• Free Copy on Membership Marketing Blog• Easy link: –
  23. 23. Promotion• “If you build it, they will come” – Field of Dreams• “If someone comes to you with a great product that just needs some marketing, the game is probably already over.” -- Seth Godin’s Blog
  24. 24. Promotion• Hypothesizing – Start each promotion with the question, “What cool stuff can we do?” – Can we combine? – Can we add? – Can we eliminate? – Can we make an association? – Can we simplify? – Can we substitute? – Can we reverse? Bob Stone, Successful Direct Marketing Methods.
  25. 25. Promotion• Testing – Reveals 1,000% Variance in Response – Lists – Channel (mail, email, FAX, phone, face to face) – Offers (discounts, trials, premiums) – Messages (gain, fear, pain) – Payment Options (ACCR and installment billing) – Format Graphics• Tracking – Benchmarking success
  26. 26. Making your Case for MembershipAs employment and consumer spending slows, manufacturingprofessionals are concerned. So how can you prepare for change, buildyour skills and position yourself for career success? See details inside...
  27. 27. Promotion“Successful companies are learningcompanies. They collect feedback from themarketplace, audit and evaluate results, andtake corrections designed to improve theirperformance. Good marketing works byconstantly monitoring its position in relationto its destination.”Philip Kotler, Kotler on Marketing, page 34
  28. 28. Applying the Four Tools“Don’t Push Growth;Remove the FactorsLimiting Growth.”Peter Senge, The Fifth Discipline
  29. 29. Membership Lifecycle ReinstatementRenewal Awareness Engagement Recruitment
  30. 30. Awareness• Defined: The process of establishing your brand in the minds of prospective members.• Members do not join an organization they do not know• “90% of success is just showing up.” – SEO – PR – Word of Mouth Marketing – Social Networks – Blogs
  31. 31. Recruitment• Definition: The process of inviting new members to join your organization.• Push vs. Pull Products -- Membership is a “PUSH” product
  32. 32. EngagementDefinition: The process of movingmembers from observers into usersof the resources made available byyour organization.– Members Who Interact Renew • New Member Orientation • Convention and Meetings • Product Purchases • “800” number • Web site usage • Surveys
  33. 33. Impact of Interaction• Data 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.
  34. 34. Renewal• Definition: The process of confirming the value that has been delivered to the member over the past year and requesting the continuance of the relationship. – Renewals are the members chance to “vote” on the value of what you have provided to them. – Renewals can only be benchmarked against your own organization
  35. 35. Renewal• Benchmark overall renewal rate, but also monitor if there are any particular market segments that underperform (i.e. new members).• The number one reason members give for not renewing is: “I FORGOT”.
  36. 36. Reinstatement• Definition: The process of re- introducing yourself to your member.• Reinstatement programs test the effectiveness of your renewal program. – "Look not where you fell, look where you slipped." - African Proverb• Many organizations are sitting on thousands of members just waiting to return.
  37. 37. Growth System “Growth endures not because of fortuitous demand, a hot product, or any single tactic. Growth endures when management follows a portfolio of disciplines to ensure that a broad set of growth opportunities are identified and captured as routinely as costs are controlled and processes are improved.” Michael Treacy, Double-Digit Growth
  38. 38. Tony RossellTony serves as the senior vice president ofMarketing General, Inc., an Alexandria, Virginia-based firm that specializes in membershipmarketing solutions for associations. A frequentwrite and speaker on marketing topics, Tony is acontributing author to two books, MembershipMarketing (ASAE 2000) and MembershipEssentials (ASAE 2008). He writes theMembership Marketing Blog. Contact Tony at 703-706-0360 or