In Defense of Marketing!

There have been some posts in the association blogosphere the past week that have my attention. Here is an example. Scott Briscoe posted on September 18 on Acronym the following.

“I'm not such a big believer in associations and traditional marketing. I've often wondered what would happen if the 50-gazillion dollar flashy 500-page annual meeting brochure were replaced with three reminder postcards? Could you take the money saved and plow it into other efforts, efforts that would build WOM marketing?”

I value the Acronym blog and the dialog there. But I have some concerns with his comments. I think that it is incorrect to blame marketing for a “flashy 500 page brochure”. Traditional marketing is the professional discipline of understanding and communicating the best message, to the best market segments, with the best marketing channels and techniques,

In fact, good marketing probably would not have sent out a 500 page brochure. At the very least, good marketing would have designed a test of the big brochure against some other vehicle to determine what statistically generates the best return for the association.

Here is what some other authors that I respect say about marketing.

Philip Kotler,
Kotler on Marketing: How to Create, Win, and Dominate Markets “Successful companies are learning companies. They collect feedback from the marketplace, audit and evaluate results, and take corrections designed to improve their performance. Good marketing works by constantly monitoring its position in relation to its destination.”

Michael Treacy, in his book,
Double-Digit Growth, says, “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.”

Don Peppers and Martha Rogers, Ph.D. in their book,
Return on Customer: Creating Maximum Value from your Scarcest Resource, say “to remain competitive, you must figure out how to keep your customers longer, grow them into bigger customers, make them more profitable, and serve them more effectively. And you want more of them.”

These authors are all talking about traditional marketing. Good marketing, however, does not mean that an association can offer poor products or service to members. My recent posts on
Meaning, Mission, or Money and Tangible Benefits Matter, support the importance of mission and solid membership benefits in an association.

Here is a final thought. I am concerned when association people look down on traditional marketing. Having worked with associations for nearly 25 years, one consistent fault that I have seen in many is the tendency to operate with the Field of Dreams philosophy that says “if you build it they will come.” This has limited so many great associations and products from reaching their potential audience and having the impact that they deserve.

So don’t judge marketing by the 500 page flashy brochure. Remember, anyone can find examples of bad doctors, lawyers, bloggers, etc. That does not mean that the profession itself is bad.

Do you have comments or thoughts?

A Comparison of Association Membership in Fifteen Countries

I am putting together data for an article in Global Link newsletter for the ASAE International Section Council. I came across a great paper that reported on comparative association membership in 15 industrialized nations. Unfortunately, the paper was presented in 1992 and drew data from the World Values Survey completed in 1983. Since then at least four additional World Values surveys have been done.

The 2005 World Values Survey included the question:

“Now I am going to read off a list of voluntary organizations. For each one, could you tell me whether you are an active member, an inactive member or not a member of that type of organization?”

It listed among nine types of memberships, “professional associations”. However, I have not seen anyone take these survey responses and do the association analysis again. Have any of you seen it?

So the 1992 study will have to serve as a benchmark for now.

The study showed that US membership in associations was substantially ahead of any of the other 14 nations.

At the highest levels, these nations broke out as follows:

US -- 72.7%
Sweden -- 68.1%
Northern Ireland -- 67.4%
Netherlands -- 62.8%

At the low end, memberships broke out as follows:

Spain --30.8%
France – 27.2%
Italy – 25.9%

However, the study noted, that much of the membership levels for the US came from participation in religious based memberships.

“Our data indicate that 55 percent of Americans have church or religious memberships. Except for Northern Ireland at 52 percent, every other nation is at least 20 percentage points below the American figure and in six of the countries (Belgium, France, Italy, Japan, Norway, and Sweden) less than 10 percent of respondents report membership in a church or religious organization.”

With both religious and union affiliation removed from the membership numbers, the US falls to second place with 41.2 % of those surveyed holding membership in an association. The Netherlands were first with 43.6% participation.

After reviewing the raw data, the study then controlled for social background factors and ran the data again. Based on this view,

“When both church and union memberships are excluded, there is no longer a statistically significant difference between the United States on the one hand and Canada, Great Britain, or Northern Ireland on the other hand. In addition, membership levels for Australia and the Netherlands are now significantly higher than the U.S. level, whereas without controls these two nations were not significantly different from the United States. Both the Netherlands and Australia have expected ratios of members to nonmembers that are approximately 1.5 times larger than the U.S. ratio.”

Let me know if you have any more recent data on membership participation levels by nation.

Voluntary Association Membership in Fifteen Countries: A Comparative Analysis
James E. Curtis; Edward G. Grabb; Douglas E. Baer
American Sociological Review, Vol. 57, No. 2. (Apr.,1992), pp. 139-152.

Meaning, Mission, or Money

I find it very interesting how for profits and non-profits seem to adopting each others best practices.

On my post on August 20, for example, I wrote about how corporations are creating membership programs to build customer loyalty. The post was titled:
Corporations Coop Membership Marketing.

On the other hand, many associations that I interact with seem to be increasingly concerned with the bottom line. They want to justify programs with ROI.

The post from a friend of mine on his blog provided another example of this merging of world views. My friend’s blog,
Every Square Inch, is focused on integrating faith and business.

His post highlighted
Guy Kawasaki, Managing Director of Garage Technology Ventures, business author, and former Apple marketing whiz, who talks about how to successfully launch a start up in his book, The Art of the Start.

According to Kawasaki, the most important part of a start up business isn't your business plan; it's the desire to "make meaning"; or for those of us in the non-profit world it’s the desire to accomplish the MISSION.

Here's part of what Kawasaki says:

The core, the essence of entrepreneurship is to make meaning...

Many, many people start companies to make money. I have found the companies that are fundamentally make the world a better place, that make meaning...they are the companies that succeed.

If you make meaning, you'll probably make money but if you set out to make money, you won't make meaning and you probably won't make money either.

Kawasaki goes on to say that there are three ways to make meaning:
  1. Improve quality of life

  2. Right a wrong

  3. Prevent the end of something good

If you're interested, you check out the entire video clip. It's only a couple of minutes long.

What do you think of businesses focusing on meaning and mission and associations focusing on profits?

Tangible Benefits Matter

We just completed a survey evaluating the effectiveness of a recently launched printed, membership periodical. The good news is that the members very much like the new benefit.

But what was most impressive about the survey results was how the publication increased member loyalty. For those who received and read the new publication, we found that they were:
  • 33.9% more likely to say, “I would recommend this association to colleagues and friends.”

  • 15.4 % more likely to say,” I plan to continue my membership.”

Admittedly, we may have a bit of a chicken and egg situation here. More committed members may be more likely to read association publications.

But this data is corroborated by ASAE & The Center’s
Decision to Join survey returns.

When asked the question “How do you prefer to receive information about your profession or field?” the option of receiving “magazines and journals” was the choice surpassing conferences and meetings, E-newsletters, and an association web site.

The data from these two surveys serves as a reminder that part of member’s decision to join may be altruistic, but providing tangible product in return for dollars spent is still a key ingredient to getting and keeping members.

What do you think?

Unemployment and Membership

Do the unemployed tend to drop membership in associations or do they unemployed join or remain in associations in order to tap into a network to help in landing a job? I have wondered about this and recently came across some research that speaks to this issue.

According to a 2005 study done in Belgium, it appears that the unemployed are far less likely to be members of an association. The study concludes:

“The employment status appears to have an impact on the membership of an association. . . Again the unemployed are significantly less engaged in an association than the reference [employed] group, up to 50 years.”

By the way, the study finds that the unemployed under age 50 also have a lower satisfaction with life and report more mental health problems than the employed.

The statistics for those over age 50 generally show a lower level of membership, life satisfaction, and mental health for the unemployed, but not nearly as significant as those under age 50.

Sociability, Life Satisfaction, and Mental Health According to Age and (Un)Employment Status
N. Burnaya,T, P. Kissb, J. Malchairea\
International Congress Series 1280 (2005) 347– 352

Growing Revenue through Membership Packaging

Let’s look at an innovative and successful technique that associations can employ in order to generate more revenue from members. The technique is right out of the marketing 101 textbook; it is called product line extension.

Product line extension is defined by The Marketing Dictionary as "adding depth to an existing product line by introducing new products in the same product category; product line extensions give customers greater choice and help to protect the firm from a flanking attack by a competitor."

Associations are using this concept and delivering added value, growing revenue, and improving member retention by extending their membership product through a tiered membership structure.

The ideal tiered membership allows members to choose the value proposition that best satisfies their particular needs, professional designation, or budget. For example, an association might add a membership category that includes books as part of the membership. As soon as the association publishes a new book it is sent out to these higher dues paying “book members.”

When groups add this product to membership, they tend to find that the books supplied to members become the best selling books for the association because the member books have seeded the influencers in the field who recommend the book to others.

Another example of a bundled membership would be to automatically include optional items like periodicals, newsletters, or professional development into a premier membership category.

Tiered membership, however, is NOT a la carte membership. I believe that this is not a good direction for associations. A completely customized membership would increase servicing costs and perhaps lower overall product sales.

There are always members who want to buy the Cadillac of your association’s membership offerings. This approach of bundled membership packages that allow the member to select the membership tier that best satisfies his or her needs has been executed effectively by the Association for Supervision and Curriculum Development (ASCD). As presented on their web site, their membership structure offers:

  • 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

Another association that has looked at adopting this model is the Water Environment Federation (WEF). Jack Benson, Deputy Executive Director of WEF, says, “As I look at different ways of extending our membership product line, I am coming to the conclusion that in a changing and evolving marketplace, giving members a choice of what will best serve their needs makes sense. Providing members with a variety of options and packages for them to choose between allows our members to have a level of customization to meet their specific career and information needs.”

In addition to generating a higher level of revenue for an association, a tiered structure pays some additional dividends; tiered membership increases the perceived value of membership and typically improves member retention because members get the specific products that they desire.

And the costs of offering a tiered membership are often low. The benefits that make up the bundles can be drawn from existing programs and services, so the cost to service the higher tiers is limited to the incremental cost of shipping the items. Furthermore, the association saves marketing dollars because the products do not need to be separately sold to members.

Let me know your thoughts on this concept of tiered membership. Have you seen any working models using product line extension in membership?