Sometimes we can be overwhelmed with the many challenges and opportunities when it comes to membership marketing. My goal today is to try and simplify the steps needed in building a well targeted and effective membership marketing program for your association.
Three keys to on target membership marketing ready, aim, and fire
1. Tony Rossell
Senior Vice President, Marketing General Incorporated
Online Conference for Small Staff Associations
February 17-19, 2015
On Target Membership Marketing:
Ready, Aim, Fire
2. Three Steps to Target Your
Membership Marketing
•Ready
•Aim
•Fire
3. Are you “Ready?”
“21 percent of associations surveyed do not
know their member retention rate.”
Advanced Solutions International (ASI) “Global Benchmark Report on Membership
Performance.”
6. • Total Membership by month and year over
year.
• New Members by month and year over year.
• Membership Conversion (Renewal of First
Year Members).
• Year Two and Subsequent Year Renewals
(Y2+)
• Total Renewals by Month and Year
Getting “Ready”
7. 2014 Membership Marketing
Benchmarking Report
• Nearly 900 Participating
Associations
• Sixth Year
• Benchmarking provides a
baseline or guide for
• Additional tool to primary
dashboard
Getting “Ready”
10. Renewal Rate measures the number of
members kept over a given period of time
-- usually during a fiscal or calendar year.
To determine how many
– Total Number of Members Today (minus 12
month new members) / Total Number of
Members in Previous Year
– Example: (105 -15)/100 = 90%
Renewal Rate
11. Defines how long on average members stay
with an association.
–Reciprocal of Renewal Rate - .10
–Divide Reciprocal into = 1 /.10
–Example: 1/ .10 = 10
Membership Tenure
12. Defines the economic value produced by a
typical member.
– Assume $100 / Year Dues and $50 / Year in Non-
Dues Revenue
– ($100 + $50) * Average Tenure = LTV
– ($100 + $50) * 5 = $750
Lifetime Value
13. Defines the equilibrium of total membership
where members gained and members lost will
be equal.
–Annual New Member Input / Lapse Rate =
Steady State Membership
–Example: 1,000 / .20 = 5,000
–90% Renewal Rate = 10,000 (1,000 / .10)
–60% Renewal Rate = 2,500 (1,000 / .40)
–90% Renewal Rate and 200 New Members =
2,000 (200 / .10)
Realistic Membership Goals
14. “Fire”
• Executing your plan
–Effective Recruitment Activities
–Effective Retention Activities
16. Effective Recruitment Activities
1. Enhance the Value of Membership
2. Increase Volume of Recruitment Efforts
3. Add New Marketing Channels
4. Test New Lists, Offers, and Creative
5. Increase the Frequency of Touches to Top
Prospects
17. Effective Retention Activities
1. Increased Member Usage
2. Identify “At Risk” Members
3. Increase the Frequency of Contact
4. Increase Renewal Contact Channels
5. Offer Members Payment Options
18. Contact Information
Tony Rossell
Senior Vice President, Marketing General Incorporated
Phone: 703-706-0360
Email: Tony@MarketingGeneral.com
Website: www.Maketing General.com
Editor's Notes
Sometimes we can be overwhelmed with the many challenges and opportunities when it comes to membership marketing. My goal today is to try and simplify the steps needed in building a well targeted and effective membership marketing program for your association.
However, please note that there is a big difference between “simple” (plain, straight forward) and “easy” (not hard or difficult; requiring no great labor or effort).
Developing and maintaining a well run membership marketing program does indeed require labor and effort.
Here are the three steps:
Ready – Establish a knowledge foundation by tracking your organization’s key membership statistics and looking at industry benchmarks.
Aim – Build an economic model for membership that makes sense and helps you set realistic and achievable goals.
Fire – Develop and implement a plan based on the data and economic foundation that you have established and implement a high frequency, multi-channel, trackable and test driven program.
Similarly, a recent survey by ASI reports that 21% of associations do not know their membership retention rate.
There is an old African proverb that says, “Do not look where you fell but where you slipped.”
You need to track your membership numbers to identify and diagnose problems and be ready to effectively do membership marketing. Getting ready to do membership marketing requires an understanding of where you are and where you have been.
The challenge that many groups face is that they do not collect this information. In fact, the MGI 2014 Benchmarking Report shows that 29% of associations measure almost nothing.
So what membership statistics should an association track? And how can it be done?
Here is a recommended membership dashboard that includes the key categories that will provide the essential membership data for an association.
Key leverage points of information to track are:
Total Membership
New Member Input
First Year Membership Conversion
Overall Renewal Rates
Segment or Category Renewal Rates
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.
So where else can you 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.
So now that you have a good dashboard and understand where your association stands, what do you do with the information? You use the numbers to take aim at budgeting for membership and setting goals.
Besides not understanding the foundational membership statistics, the second biggest challenge for associations in the membership area tends to be underfunding this important area.
Membership is a unique relationship:
Membership provides a renewable and projectable income stream to an association
Members are paying the association to become customers of additional products and services
Members volunteer and work for free to help produce content, standards, and visibility for the association.
It is no wonder that the corporate world is running to embrace and use the membership concept.
So often I hear associations’ set membership goals that lack a realistic foundation like, “20,000 members by 2020!”
These goals may be set without consideration of a SIMPLE calculation that can help an association project what would be required to hit a goal. It is called a steady state analysis. Using this calculation and association can determine what its equilibrium membership will be given current conditions and what changes would be need in new member input or retention in order to achieve a different outcome.
Here is how it works.
I am sometimes surprised that organizations do not have a recruitment plan – or it is so complicated they never executive it. Here is a template 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.
1.Enhance the Value of Membership -- Finding a need and meeting it is the foundation of marketing. If you can provide an indispensible new product or service as part of your membership offering, you will increase the response to your current promotions.
2.Increase Volume of Recruitment Efforts – Many membership organizations under budget and do not reach deep enough into their markets for potential members. If you have strong returns from your recruitment efforts, you probably are not reaching your full market potential.
3.Add New Marketing Channels – Many organizations get locked into one or two marketing channels like email or sales calls and forget about other options like direct mail, telemarketing, and online. When integrated a combination of channels can be particularly effective.
4.Test New Lists, Offers, and Creative – Without regular testing of new lists, special offers, and new messages and graphics, a membership recruitment program is sub-optimized.
a.List tests – Can impact response by 500 percent.
b.Offer tests – Can impact response by 200 percent.
c.Creative tests – Can impact response by 100 percent.
6.Increase the Frequency of Touches to Top Prospects – For almost every organization, there is a core of prospective members who respond at a very high rate. Aggressive membership marketers reach out to these prospects much more frequently over the course of a year and see strong returns.
Increased Member Usage – In many cases, when there was an increase reported in the attendance or purchasing of an association’s products and services there was also an increase in renewal rates over the baseline of 30%. For example, 41% of the associations that reported an increase in attendance at professional development meetings saw an increase in renewal rates. Similarly, 43% who reported an increase in book and directory purchases saw and increase in renewals and 37% who reported an increase in annual conference attendance saw an increase in renewals.
Identify “At Risk” Members – The “finger prints” of your members’ behavior is captured in the form of data throughout your organization. Properly analyzed this data can tell you who is likely to renewal and who is at risk. For almost any group, usage of the website, opening emails, and product and service purchases are a positive predictor of renewal. None usage by a member may require an intervention even before the renewal program begins to help communicate the value of membership.
Increase the Frequency of Contact -- Research shows that associations with better-than-average renewal rates have between seven and 15 renewal contacts in their system. However, you can measure the impact of increased touches on your own. Simply add one additional mailed notice to your current program and divide the cost of this additional step by the number of renewing members. It will almost certainly be less expensive renewing that last members than acquiring a brand new member.
Increase Renewal Contact Channels – Ideally you contact members for renewals with multiple marketing channels. For example, 69% of associations that include phone contacts as part of their renewal efforts have renewal rates over 80% compared to 44% of associations who do not use phone efforts. And 66% of associations that use direct mail as part of their renewal efforts have renewal rates over 80% compared to 45% of associations who do not use direct mail.
Offer Members Payment Options – If your members pay their dues out of their own pocket, making automatic credit card renewal plans and installment options available can dramatically improve renewal rates. One association reports increasing on-time renewal rates using an installment option from 55% renewal for non-participants to 82% for participants.