The AARP Growth Strategy

Yesterday’s post, My Favorite Growth Strategy – Market Expansion, outlined the theory of growing membership through market expansion. I thought that it might be interesting to take a look at the classic example of using this strategy today – AARP

In 1947, Dr. Ethel Percy Andrus, a retired high school principal, founded the National Retired Teachers Association (NRTA). But after ten years of operation, in 1958, NRTA evolved into AARP when Andrus opened the organization to all senior Americans.

“Apart from a bumpy period in the late '70s, AARP's rolls have risen rapidly each year since its founding in 1958: 1958 50,000 1968 1.6 million 1978 11.8 million 1988 30 million“(Money Magazine).

Membership was boosted in 1984 when AARP further expanded its markets by lowering the age of membership eligibility from 55 to 50.

Today AARP reports 38 million members.

Clearly, the AARP growth included favorable demographics, market need for insurance and other products, and a good membership value proposition. However, if AARP did not look beyond its original narrow teacher market, some other organization would be serving seniors today instead.

That’s why market expansion is so important.

Thinking broadly about who might benefit from the products and services provided by an association can lead to substantial growth.

2 comments:

Maddie Grant said...

That is true, but sometimes an association may, on the contrary, want to appeal to a niche audience. There's often a philosophical conflict between wanting to grow membership in order to sustain more activities or services, and NOT wanting to dilute the core purpose of the association.

Tony Rossell said...

Maddie -- Thanks for your comment. I agree with you. Market expansion is not always the right growth strategy for every group. Product expansion (giving more value to your current market) may be better for some groups. However, as Peter Drucker said, “One strategy is practically infallible: Refocus and change the organization when you are successful. . . If you don’t improve it, you go downhill pretty fast.” In other words, you can pick your growth strategy, but you better be moving forward with some plan. My next post will look at growing through retaining members. Tony