New Member Discounts and Incentives

I often hear people say that a dues discount cheapens membership and attracts members who the association really does not want. I appreciate their good motives of wanting to attract true believers to the association, but based on real life marketing experience, I disagree.

That’s why I enjoyed reading Maddie Grant’s post on her blog, Diary of a Reluctant Blogger, picking up on an ASAE marketing listserv discussion related to new members dues discounts.

Maddie and I both came to the same conclusion that discounts are okay. In fact, she reports her association gives new members a $500 first year dues discount.

I won’t repeat the quantitative test results that I used to support trying a new member dues discount, except to say that with in one long-term test, we found that an initial dues discount helped one association end up with many more members and much more dues revenue after a full three years of tracking. You can read the details in a past post that I did on the Membership Marketing Blog on the topic of Gathering Data through Market Testing.

But I would like to comment on why I think a discount or any appropriate incentive can be effective.

Through running membership programs for over 20 years, I have come to the conclusion that membership is what marketers call a “push” product. Prospective members may wake up in the morning and say, “I’ve got to find a Starbucks”. But they do not wake up saying, “Gee, I have to find an association to join today.”

In fact, only a small number of members will “find” an association on their own. We learned from The Decision to Join (DTJ page 83) that a mere 2.6% of the survey respondents found out about the association from “browsing the Internet”. Most were introduced to the association by colleagues, conferences, ads, or some type of marketing.

In other words, membership is sold not bought.

This is no different from sharing samples as you stroll through the aisles of Costco or offering trial subscriptions to magazines. It is said of churches that new members often belong before they believe.

Because membership is a push product, growing associations are typically those that have aggressive programs to ask people to become members and incentive them to give the association a try. They say to prospects, “Try it, you’ll like it.”

Sure some members will try the association and not renew. DTJ reports that the number one reason members leave an association is that they, “Did not receive the expected value to justify the cost of dues” (page 81). But because many associations offer a sold product that can truly help a member; the goal needs to be getting that prospect into the fold so that they can become the true believer that we all desire for our association.


Lindy Dreyer said...

Coming in late to this discussion. I have mixed feelings, having seen incentives go haywire. But in a healthy association, with good benefits and member value, I know you're right-on.

Fishing is no fun if you don't use bait.

Matt Baehr said...

My question is, is it better to discount and give the same things, or charge full price but give them something extra?

I.E. 10% off dues vs. free education seminar

Maddie Grant said...

Thanks for the mention! I personally believe it's all to do with psychology - there's a very important feelgood factor involved with receiving a discount (or a freebie, for that matter)! Those "happiness" factors provided by an association, taken as a whole package, are what result in engaged (and then evangelist) members.