The Cost of the Wrong Membershp Marketing Strategy

In my two previous posts, I tried to outline the profound long term opportunities of choosing the best membership marketing strategy for an association. Picking the one that looked good to some of you would have resulted in a long term membership nearly 60 percent lower than the full membership potential in our case study.

That’s why it is so important for every association – however well intentioned it may be -- to conduct this type of analysis before launching a membership marketing strategy.

Now let’s take a look of the financial opportunities of selecting the proper membership marketing strategy. Selecting the best strategy also has profound implications for the financial future of the association.

In the case outlined above, assuming an average dues rate of $95 and average member product purchases each year of $80, the financial outcomes of choosing the correct strategy are significant.

  • Option one – focusing on membership acquisition -- generates an annual dues and member product sales revenue stream of $5,600,000.
  • Option two – focusing on membership renewals -- generates an annual dues and member product sales revenue stream of $2,332,275.
  • Option three – focusing on a balanced strategy of acquisition and renewals -- generates an annual dues and member product sales revenue stream of $4,375,000.

Choosing the membership acquisition strategy #1 over strategy #2 more than doubled the association’s potential annual revenue.

Potential Analysis is a shorthand methodology to focus the membership development direction of an association. The key to its success is using realistic estimates of how many members could be added to the association and what the renewal rate could be. Therefore, market research and benchmarking with other organizations can be used to hone these estimates and generate a more accurate future picture. But without doing this analysis of where an association is and where it can be, many groups significantly sub-optimize their potential.

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