Here is a matrix to help define these options.
Friday, August 14, 2015
Delivering products and services to members involves choices. How much of your budget, staff time, and promotional efforts should go into any given product or service? What products and services attract new members and help to keep them? Understanding this defines value.
One method to help make these decisions is to ask members and staff to rate offerings through two questions. How important is a given product or service? And how well does the organization deliver these offerings?
Benefits that are important and well delivered need to be promoted. Benefits that are important to members, but are not well delivered, for any number of reasons, require investment to improve them. And benefits that are of little value can be set aside or eliminated.
Here is a matrix to help define these options.
Here is a matrix to help define these options.
Wednesday, July 29, 2015
Once again, I am pleased to share the just released 2015 Membership Marketing Benchmarking Report with you.
This is the seventh consecutive year that Marketing General Incorporated (MGI) has produced this research which explores the membership marketing initiatives and outcomes of 914 participating associations. The purpose of this study continues to be the development of meaningful benchmarks by which the leadership of associations can evaluate their own membership marketing strategies and tactics.
This year’s membership outcomes can best be described as “moderate” as opposed to the previous year’s stronger membership growth results. Of the participating associations this year, 46% reported membership growth, representing a decrease from the 53% who reported growth in 2014. Of associations that increased their membership, 72% saw increases in new members and 37% saw increases in renewal rates.
Important topics covered in this edition of the report include:
· The five year association membership growth trends.
· The biggest challenges reported in growing membership.
· The average and median renewal rates for associations.
· The top reasons for members joining.
· The top reasons for members not renewing.
· The communication methods used to engage new members.
· The most popular social media used by associations.
· The average number of member email contacts per week and the average open rates.
· The frequency and amount of dues increases.The 2015 Membership Marketing Benchmarking Report also includes comments from participants on their successes and challenges in membership marketing. And to provide more specificity, this year’s report segments association responses by the type of association – Individual, Trade, or Combination.
To download a copy, please use this link. I hope that you find it a helpful tool as you manage and grow your organization’s membership.
Tuesday, May 19, 2015
Perhaps one of the most talked about topics in membership marketing today is data. Topics range from cleaning data to appending third party information to member and customers records. The reason for this increased focus is that good data empowers more efficient marketing and leads to better targeting and results.
Poor data is a major problem. The USPS estimates that “almost 25% of all mail pieces have something wrong with the address -- for instance, a missing apartment number or a wrong ZIP Code.” And 17 percent of Americans change their address annually.
But there are tools available to improve data hygiene and scrub your current and former membership data. You can contract for them through a full service agency or mail house or lease these tools as part of your CRM software. These tools include:
1. Coding Accuracy Support System (CASS) – CASS software will standardize mailing addresses to the USPS’s preferred presentation of the address. It can also add missing information like an incorrect ZIP code.
2. National Change of Address (NCOA) – NCOA includes over 160 million address changes from individuals, families, and business that have been provide to the USPS going back as far as 48 months.
3. Direct Marketing Association’s (DMA) Mail Preference Service -- The DMA allows people to opt-out of receiving direct mail solicitations. This file is available to identify those in your database who do not wish to receive mailings.
4. Social Security Administration (SSA) Deceased File – This database contains 86 million deceased records to help remove these people from your database. In a recent running of this file, we matched .4% of the current and former members of one organization matched the SSA database.
5. Merge, Purge, and De-Duplication – Invariably duplicate records will find their way into anyone’s database. The merge-purge process identifies matching records based on an algorithm and highlights duplicate contacts even when they are not an exact match (different spellings of names or work versus home addresses).Keep in mind that these data hygiene tools are not a onetime fix, but a regular practice that needs to be done to maintain accurate records. And once you have gone through the cleaning process, be sure to establish and maintain standards so new data is checked as it goes into the system.
Once data is cleaned and standardized, appending additional information to the record can provide an opportunity for much better targeting efforts and sending the appropriated messages. However, you should avoid any appends that your members would view as a violation of their personal or company privacy. The two primary sources of information are consumer and firm based data appends.
1. Consumer Data Appending – This service can provide demographic, psychographic, and lifestyle appends based on individuals or households. Some of these include: date of birth, income, vehicles, mortgage, marital status, educator, licensure, mail order purchases, phone number, and party affiliation.
2. Business and Firm Appending -- This service can provide NAIC codes, number of employees, sales volume, phone numbers, years in business, parent and branch identification, key staff, and legal status.The decision on what data to append should be driven by your plan on how you will use it. What do you need to know to be more targeted, relevant, and accurate? One organization, for example, in order to enhance their insurance marketing efforts was able to add date of birth to 40 percent of their member records. Another group was able to reach new to the profession individuals using the dates of newly earned professional licenses.
The information in your database is fluid. The real data changes every day, so there is no perfect database. However, the practice of regularly cleaning your data and appending important information can drive success for an organization.
Wednesday, April 15, 2015
In most cases, all of your marketing efforts drive members and customers to your website to join, register, or purchase an item. But the reality is that once a prospect comes to your website many do not complete their transaction on the first visit.
For example, very often potential attendees visit an association’s website to find out the date, location, or cost for a conference. However, these prospects rarely register right away. They may need to check their calendar, the cost of flights, or get budget approval to attend.
Similarly, one organization that we serve has a fairly high dues rate that is paid out-of-pocket by the member. Because they may need to “think it over” before joining, they have nearly 10,000 shopping cart abandons of their membership application each year.
Because an organization’s website is core to the purchasing process and because many prospective members do not buy on their first visit, adding Online Remarking advertising to website is a necessity today for organizations.
A remarketing program involves adding code to specific pages of your website that “cookies” your site’s visitors and then shows them relevant ads on a wide variety of third party sites as they travel across the Internet and reminds them to return. The two main providers of remarketing advertising are Google and Facebook. Google remarketing ads run on a wide range of sites that accept ads. Facebook remarketing ads appear within Facebook application.
You can place the remarketing code on your entire website or on pages specifically related to certain products or programs that you want to promote. And by placing a conversion code on your thank you page where a transaction is ultimately completed, you are able to monitor that the sale was driven to your site from a click on a specific remarketing ad.
Perhaps most appealing, remarketing programs are generally very economical additions to your marketing mix because your costs are driven not by impressions of ads, but by the actual clicks on the ad driving someone with a proven interest in your organization back to your page.
Marketers spend a lot of money along with time and effort to drive potential members and customers to a website and make a purchase. Online remarketing advertising offers an effective and economical channel to increase the stickiness of these promotions and remind prospects to complete the purchase that initially sparked their interest. If you are not now using online remarketing ads, give it a try.
Wednesday, March 4, 2015
Recently, I had the opportunity to present a session for ASAE on membership marketing. I shared the following three steps to building a strong and sustainable on target membership program.
1. Get Ready – Establish a knowledge foundation by tracking your organization’s key membership statistics and looking at industry benchmarks.
2. Take Aim – Build an economic model for membership that is based on sound principles and helps you set realistic and achievable goals.
1. Get Ready – Establish a knowledge foundation by tracking your organization’s key membership statistics and looking at industry benchmarks.
2. Take Aim – Build an economic model for membership that is based on sound principles and helps you set realistic and achievable goals.
3. And Fire – Develop and implement a segmented, high frequency, multi-channel, track-able, and test driven recruitment and retention program.
Here are the slides from that presentation.
Tuesday, March 3, 2015
It is great to find a new book that has been waiting to be written for a long time. The Membership Economy: Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue is that book. It makes the case for the membership relationship across almost all organizational platforms.
The author, Robbie Kellman Baxter, maintains that membership is the lever for success for organizations from online businesses like Pandora, to communities like LinkedIn; to loyalty programs like airline frequent flyer programs, to traditional programs like Weight Watchers; and yes, even for non-profits and associations. To support this, she offers lessons learned in numerous case studies on how organizations have successfully employed the membership concept.
Baxter argues that “Virtually any organization can become part of the Membership Economy. Membership strengthens loyalty. Membership strengthens participation. Membership strengthens referrals. And organizations that think about membership tend to focus more on providing long-term value, which ultimately leads to better customer lifetime value. Any CEO who is not thinking about membership is missing a huge opportunity to point his or her organization toward long-term sustainable profitability” (page 22).
In addition to making the case for membership and providing successful case studies, the book shares strategies and tactics, many of which you will see endorsed here on the Membership Marketing Blog, on how to effectively implement and optimize a membership program. Baxter emphasizes that for effective membership marketing you need to build an acquisition funnel, onboard new members, establish a pricing model, consider a freemium option, track the right data, and retain members.
Some today make the case that membership is obsolete or no longer relevant. Baxter strongly makes the opposite case. She says, “A certain type of organization is winning the hearts and voices of their customers, and building the kind of loyalty that traditionally was reserved for family, community, and church. The secret that these organizations know is that people are craving membership. Organizations that build their businesses around people’s needs to belong, to be connected, and to be admired, that are focused on relationship over products are winning in today’s economy” (page 9).
The Membership Economy will be published this month and is a great read for anyone considering developing or currently managing a membership program.
Thursday, February 12, 2015
We will be closing the questionnaire for the 2015 Membership Marketing Benchmarking Report on February 15th and I want to give you this last opportunity to participate.
The annual Benchmarking Report is the association industry’s most comprehensive study on membership marketing and gives you the opportunity compare your organization against almost 1,000 other associations.
If you are a previous participant, please use the personalized link that you received in our email directed to you. If you have not received an email invitation to participate, you may use this link.
The survey should take less than 20 minutes to complete.
This annual study has provided critical comparative data on how individual, trade, and hybrid membership organizations promote awareness, target and recruit new members, and engage and renew their current members.
To thank you for your participation in this best practices research project, MGI will send you a printed copy of the full 2015 Membership Marketing Benchmarking Report.
Your participation is much appreciated. No specific responses will be reported from any individual or association without their written consent.
Please take some time now to participate in the 2015 Membership Marketing Benchmarking research by using this link.
Monday, January 26, 2015
In simple terms, a prospective member goes through a four step buying process and ideally each step of the join process is anticipated and supported by the destination association.
The prospective member join process begins when a prospect says, “I have a problem.” The prospect may need some piece of information or some specific training to learn a new skill or maintain a license. Or the prospective member may need to tap into a network for career or businesses advancement.
The next step for the prospect is to search for a solution. This most likely will be done online. But he may also ask for a recommendation from a friend or colleague. Options that they may never have been aware of before come into focus.
Once options are identified, the prospective member will evaluate the choices. Should the prospect just use Google since there is no direct cost for this information? How about an industry publication? Or would a full service provider like an association with information, training, and networking be the best solution?
Finally, the value offered by each provider is weighed and the transaction is completed.
At the same time, an association has its part to play in this buying process.
First the association needs to anticipate the needs of prospective members. What does research show are the challenges faced by people in the industry or field? Do potential members like to meet those needs through meetings, publications, social networks, or a website? How much can they afford to spend for a solution?
Secondly, the association needs to be sure that it is easily findable and offers an initial opt-in opportunity for the prospect. Will web searches bring the association’s solutions to the top of search engines? Can search engine marketing, online content marketing, and website remarketing ensure that the association regularly pops up as a prime solutions provider? Is a prospective member’s contact information collected for additional follow-up after an initial inquiry? Are members ready to recommend the association to those who are searching? Maintaining a presence allows the association to be a part of the prospect’s evaluation process.
Next, the association needs to understand and present a very clear and compelling value proposition to the prospective member. Why is joining the best value for the money compared to the other options that are under consideration? What are the immediate and longer term benefits of membership? What is the key promise that the association can deliver that no one else can match?
Finally, the association must make the actually joining transaction simple and easy. With website joins, it is amazing how many prospective members abandon the online shopping cart of some associations because too much information is requested, the sign up process is too complex, or there are unclear instructions. The lower the commitment of time, money, and information required to join the less of an impediment the transaction process will be to completing the join process.
Monday, January 5, 2015
We all want to increase membership retention. Here are some tips that you can implement this year to help make your membership stickier and encourage members’ to stay with your organization.
1. Increase the number of contacts and relationships you have within a member’s organization. This is particularly applicable for trade group memberships where it is important to identify the membership champion, decider, approver, and user.
2. Reward continuous membership tenure with loyalty points or recognition with a “member since” award.
3. Limit access to members for important, critical, or timely content and communicate these limitations to members. Members only content might include alerts, salary and industry surveys, standards, and notifications on regulations.
4. Provide member financial incentives beyond member discounts like members only product sales, group purchasing, and free shipping.
5. Exclude non-members from the benefits of full access to your organization’s social media networks.
6. Require continuous membership for participation in hard to find industry specific services like professional liability or workers compensation insurance.
7. Gain members approval for auto credit card or EFT renewals or installment billing to turn membership renewals from opt-in to opt-out.
8. Maintain important data for members for third party validation of certification, continuing education, graduation, and awards.
9. Enhance member visibility with directory listings, vanity email addresses, referral links from your organizations website, certificates for display, window clings, and member usage of your organization’s logo -- all limited to continued membership.
10. Monitor members interactions with the organization through email opens, purchases, and participation in social media and develop and intervention plan to reach out to those who are not engaged.
This list is only a start. Feel free to add your own ideas in the comments section here.
Tuesday, December 2, 2014
The other day, I received a membership recruitment mailing offering an end of the year 50% off first year dues discount from a respected professional association.
As a reader of this blog, you may know that I believe in making special offers available to recruit prospective members. And done wisely, a special offer will produce more than enough new members to pay for the discount or premium and future renewal rates will only be marginally affected.
However, there is a difference between a well-planned, tested, and strategic use of a special offer and -- to use a football term -- an end of the year “Hail Mary Pass” that is designed to prop up final membership numbers.
With a steep 50% off discount, it is unlikely that the additional response will make up for the lower price. And even if it does, the members that are obtained will likely continue at a much lower rate when the full price is requested at the time of renewal.
The best approach to membership recruitment continues to be a regular stream of value laden communications that include an incentive to act within a given timeframe. This approach allows for testing and optimization of the program over the course of the year.
As football seasons draw to a close, we may see some amazing come from behind victories in the last seconds of a game. But I would rather have the outcome of the game clear in the third quarter because my team executed and effective game plan from the start. As we go into the next year, be sure organization has a well thought out membership recruitment strategy and schedule in place.
Wednesday, October 15, 2014
At this time of year, many of my clients are working on their 2015 membership marketing plans. If that is the case for you, be sure to step back as you plan and keep in mind the big picture. Membership is all about relationship. There is a marketing lifecycle that you need to keep in mind. In membership, the marketing lifecycle segments the membership experience into five consecutive steps:
1. Awareness is when prospects first discover you.Awareness is typically developed through a proactive online presence using the multiple opportunities that are now available to marketers ranging from SEO, to social media, to lead generation, to SEM. Offering free content and to capture an opt-in and contact information from a prospective member is particularly powerful way to initiate a relationship with a prospective member.
2. Recruitment is when prospects choose to try you.
Recruitment capitalizes on the awareness that has been established and invites the prospect to become a member by presenting outstanding value and a special offer to act now. Membership is what marketing call a “push” product and needs to be sold. If you build it they typically will not come unless asked.
3. Engagement is when new members feel they belong with you.Engagement is the key to high retention rates and sustained membership growth. Membership engagement is built through encouraging usage of the products and services made available by an organization and by understanding and presenting relevant and targeted information back to the member that fortifies the value of membership.
4. Renewal is when lapsing members decide whether to keep you.
Renewal is a confirmation of the value members feel they have received from the organization. It is a vote of confidence or no confidence. Renewals are a campaign not an event and require frequency and multiple channels to break through the clutter of competing demands on members’ time and resources.5. Reinstatement is when former members agree to return to you.
Reinstatement programs offer opportunities for lapsed members to reconsider the decision to join when presented with fresh messaging and perhaps new benefits. It is always easier and more cost effective to try and restore the relationship with former members than to recruit a brand new member.By keeping the framework of the relational lifecycle in mind, you will be sure to cover the important elements of building a strong membership marketing program for the upcoming year.
Tuesday, September 9, 2014
Often I hear that readers of this blog use statistics from the Benchmarking Report for board and volunteer presentations. To make presenting this information easier, I have uploaded a presentation ready copy of the report. Feel free to use it. My only request is that you provide attribution with any data from the report that you present.
Tuesday, August 19, 2014
Last week I had the opportunity to present at the ASAE Annual Meeting with Greg Melia and Krista Barnes on the opportunities and challenges associations are seeing with hybrid membership models.
I also wanted to share the information and slides here.
Hybrid membership models take a long term marketing concept called product line extension and apply it to an association’s membership product. Many associations are moving away from a traditional “one size fits all” membership and instead offering a portfolio of membership options that allow a prospect to select a package that best meets their content needs and budget. Hybrid membership models range from a tiered membership structure, to group membership, to an option for selecting either individual or organizationally based membership package. Properly deployed, these new models can help an association increase member engagement, numbers, and revenue.
Here are the slides and notes from the ASAE Annual Meeting session.
Thursday, July 31, 2014
At some point you reach the limit of how often and how many direct marketing efforts that you can send out to your established lists of membership prospects. But your leadership may still say, “I want more members!”
This is when inbound membership marketing can become an important new contributor to your media mix.
Inbound membership marketing helps you reach new prospects that you may not have interacted with before and allows them to raise their hand and come to you in search of the very information and products that you produce.
Here are four proven sources to feed you inbound marketing efforts.
1. Google and Facebook Remarketing – After all of your efforts to drive a prospective member to your website, you may be shocked at how many abandon your join shopping cart before completing the transaction. One of my clients has over 10,000 shopping cart abandons from their join page each year. Remarketing efforts – following your visitors around the internet and Facebook with ads – encourages those visitors to return to your site to gain more information and perhaps complete their transaction.
2. Paid Search Engine Marketing (SEM) – Search Ads appear when a prospective member enters a word or phrase into a search engine that matches one of your keywords. They are effective because you are responding with your information directly to a seeker who wants some piece of information that your organization possesses.
3. Content Ads – Whereas search ads are driven by keywords, content ads are shown on other websites offering information that relates to your products and services. When the prospective member’s reading interests are a match to what you have to offer, your ad is displayed.
4. Social Media Advertising – Many social media sites offer millions of more impressions than one will ever achieve with traditional direct marketing efforts. LinkedIn allows you to target ads to very specific job classifications, titles, and associations. And Facebook allows you to match your current members to potential prospects who are on the site and display ads to these look-a-like audiences.
All of these inbound online marketing sources come with these additional benefits:
· Awareness – Many more prospects will see your ads than will click on them, but you typically pay just for clicks.
· Coverage – Online advertising gives you access to every corner of the world where there is an internet connection.
· Flexibility – With these online efforts, you can adjust and allocate funds on a daily basis to maximize response.
· Speed – You can literally have a digital advertising program up and running and producing response in a day.
· Measurement -- You can know impressions, clicks, and with good tracking the number of members joining.The most important aspect of optimizing each of these inbound sources is thinking through the tactics on how to gain an opt-in for follow-up with anyone who does come to your landing page or website from one of these sources. Lead capture and relationship building is where the pay-out comes from these efforts.
Developing an inbound membership marketing program is not at all meant to eliminate traditional tools like direct mail, email, and telemarketing. If these tools are productive by all means continue to use them. But at some point even these established methods will see diminishing returns. You need to find new, untapped audiences for the information and services that you offer and inbound membership marketing has proven to be an excellent tool to assist with reaching new prospects.
Wednesday, June 25, 2014
It is my pleasure to announce the release of the 2014 Membership Marketing Benchmarking Report. With site registration, a free download of the report is available using this link. Please download your copy of the report now and let me know what you think.
A final and full printed report has also just been mailed to all of those organizations who participated in this year’s research.
This marks the sixth year that Marketing General Incorporated (MGI) has surveyed associations to better understand what is going on in the membership market and what is working best to recruit members, engage new members, renew existing members, and reinstate former members. It also marks the highest level of association participation with 865 separate associations sharing their data.
The 2014 Report includes new questions related to social media usage, email frequency and open rates, and who pays membership dues (individuals or companies).
I think you will also find trend information from ongoing questions over the past six years very useful. This year results show that the majority of associations (53%) are seeing their membership counts continue to increase. However, average renewal rates for both individual and trade associations eroded this past year.
The most important aspect of this report is that it goes beyond cataloging the practices of responding associations; the Benchmarking Report also takes these practices and cross-tabulates them with the membership outcomes that associations are experiencing. The comparison of practices and better new member input, renewal rates and overall growth provides strong directional information to help you select the tactics and strategies that might fit into your marketing plans for the upcoming year.
I hope that you find the 2014 Report of help as you seek to maximize the membership results for your organization.
Wednesday, May 28, 2014
In the coming months, I am presenting two sessions on the transitions and opportunities that are taking place in the packaging of association memberships, otherwise known as membership models.
What an increasing number of organizations are doing is re-packaging their traditional membership offering to appeal to new market segments and to adjust to new business realities. They are encouraging the market to drive their membership product instead of their bylaws.
There is one change in particular to highlight. An increasing number of individually based associations appear to be offering both individual and institutional membership instead of the traditional clear delineation between an individual membership and company or institutionally based structure.
In fact, since starting our Membership Marketing Benchmarking research, the proportion of associations reporting that they offer a combination or “hybrid” membership has gone from 17% to 28%. And as the chart below shows, this has been accompanied by a drop in associations’ reporting that they only provide individual membership from 54% to 44%.
When one looks at the outcomes of adopting this hybrid membership model, one can also see the wisdom of considering of these changes. In my consulting experience, it is not unusual to see organizations that offer both individual and institutional membership options achieving five to ten points’ better renewal rates with their institutional membership offering compared to their individual membership. Additionally, our 2014 Membership Marketing Benchmarking Report highlights the mean renewal rate for individual membership associations is 76% and the mean for combination associations is 80%. Both, however, fall short of the mean renewal rate for trade or institutionally based associations of 85%.
Perhaps the reason for these better renewal rates is an institutional membership will typically be paid from a company budget, not out of an individual’s wallet. Also, an institutional membership obviously supplies benefits to multiple people adding to the potential endorsers of continuing the membership relationship.
Finally, offering a combination of membership may help with recruiting new members. Our research shows that combination associations were more likely than both trade and individual membership organizations to report an increase in new members over the past year.
One of the 4 P's of marketing is "product", so adjusting the membership product to meet the changing market conditions is an important strategy for associations. One of these adjustments to the membership model that seems to have been beneficial, in particular for individually based associations, is offering the option for the members’ companies or institutions to join and hold the membership as an organization.
Tuesday, May 20, 2014
The famous quote from John F. Kennedy, “a rising tide lifts all boats,” certainly applies to membership.
In our soon to be released Membership Marketing Benchmarking Report, we cross-tabulated organizations that reported an increase in membership numbers to the outcomes that they were experiencing in other areas of the association.
When we compare associations who saw a decrease or no change in membership over the past year to associations reporting growth in membership, we see associations with increasing membership reporting better performance in many categories.
Here are the associations reporting increases in a category -- like meeting attendance or volunteerism -- broken out by the percentage who had memberships that Increased/Unchanged/ Decreased).
· Attendance at annual conference/trade show (55% vs. 45% and 34% respectively)
· Attendance at professional development meetings (52% vs. 38% and 33%)
· Attendance of webinars (70% vs. 45% and 54%)
· Volunteerism (37% vs. 30% and 17%)
· Number of members who acquire or maintain certification (59% vs. 42% and 36%)
· Purchase of non-dues products (45% vs. 24% and 25%)
· Purchase of non-dues services (46% vs. 28% and 17%)
· Number of visits to members-only section of website (61% vs. 48% and 36%)
Fundamentally, for most associations, members are the driving force behind attendance, volunteerism, and purchases. Members pay the association to be customer. A growing and thriving member base contributes revenue and time to all areas of an association.
Wednesday, April 23, 2014
There are some excellent sessions on the schedule for the upcoming ASAE Marketing, Membership & Communications Conference on June 17 and 18 in Washington DC.
I will be a co-presenting one session that I think many membership professionals will find of help. It is titled, “Membership Model Makeover.” I will be presenting along with four other knowledgeable professionals:
- Bryan Kelly, Director, Marketing, Aptify
- Ford Bell, Executive Director, American Alliance of Museums
- Jeff De Cagna, Chief Strategist and Founder, Principled Innovation LLC
- Richard Grefé, Executive Director, AIGA
With all of the economic, social, and technological changes over the last number of years, associations have an opportunity to reinvent themselves for the 21st century. In our session, we will share examples from association executives and consultants who have been part drastic membership model changes. These makeovers examples demonstrate how organizations can change decades of tradition to make real differences in their membership.
If you are a reader of this blog and can attend the conference, please stop by and say hello.
Wednesday, April 16, 2014
For decades loyalty programs have been growing in the for profit world as a major component for engaging and retaining customers.
Those old of us to remember will recall collecting S and H Green Stamps which were one of the very first retail loyalty programs. Merchants gave out the stamps to customers as incentives to shop at their store. Once enough stamps were collected, they could be redeemed for desirable products from a catalog.
Today, a huge percentage of companies have incorporated loyalty programs as a core component in their marketing efforts including airlines offering free tickets, hotels offering free stays, and grocery stores offering discounted gasoline. Even my local sandwich shop and barber have loyalty programs.
The goal obviously of a loyalty program is to keep and reward your very best customers and members.
However, it is rare that I come across an association that has overlaid a loyalty program onto its membership. Many organizations do not recognize the diversity in their members and treat their best members in very much the same way as everyone else without regard to the value they bring to the organization. In a diverse membership, a loyalty program helps define who these most valuable members are and encourages behaviors that lead to greater value from those less engaged.
In order to build a Loyalty Program, here are five recommended steps to follow.
1. Determine what behaviors lead members to loyalty and retention by defining “Key Performance Indicators” (KPI). Basically to start a loyalty program, you first want to evaluate what behavioral variables correlate with (or are predictive of) longevity and purchases by a member (maximum ROI).
2. Select a method to calculate loyalty. Once the KPI’s that indicate loyalty are identified, a model can be built using an algorithm to calculate the mix of actions that an organization wants to reward and a POINT system devised to encourage the behavior leading to loyalty and retention.
3. Find the types of rewards that are motivational. Building the rewards for loyalty will also be important. Rewards could be in the form of one or more categories:
a. Member Recognition
b. Personal Benefits
c. Professional Benefits
4. Capturing and reporting on Reward Points. The behaviors that are to be rewarded need to be captured and translated into points. To encourage these activities, point values can be sent to members and available on a rewards website.
5. Building a communication strategy. An incentive for encouraging the behavior that an organization desires is only as good as the ability to make members aware of the program and communicate to them the benefits that they can receive. Once the system is built, consistent promotion of the loyalty program in membership and product marketing materials really helps to encourage participation.
We all know that there are very profitable members and members who contribute far less economically to an organization. A loyalty program helps incentivize the profitable members to do more and helps lift the less profitable members to higher levels of usage and engagement.
However, even if deploying a full loyalty program seems like too large of an endeavor, most organizations would benefit by implementing at least the first two steps outlined above. Defining what behaviors lead to your most profitable members can drive focus and efficiency in your organization.