Life Cycle IV -- Interdependence

In previous Life Cycle posts, we talked about the membership relationship beginning with awareness. I went on to discuss the importance of pro-active recruitment because of the “push product” nature of membership and the powerful contribution of engaging a new member to move them through their conversion year of membership.

The next season of the membership life cycle is interdependence. This level is the step above a simple transactional relationship. It is helping a member move to the point where his or her identity, livelihood, or safety is tied to your organization.

For a moment think of the association, charitable group, or faith organization with which you feel the most closely aligned. Why do you feel that alignment? Chances are because you are held by one of three 'glues' of interdependence.

I believe that these three elements or glues that build interdependence can be defined as: 1.) Common Vision, 2.) Reward, and 3.) Recognition. I have come to a better understanding of these over the past year through conversations with my colleague and friend Bill Jerome.

Common vision is a very powerful force that ties many of us to an organization. Many charitable groups are fully supported by selling their vision. Because we believe in the cause so much, we are happy to donate money with no expectation of reward or recognition.Have you established a common vision that you and your members are striving to accomplish together and that they can believe in and help you achieve? Members who are sold on the vision are interdependent with your association.

One of my colleagues at the United States Naval Institute once said to me: 'We don’t want someone to pay $39 to our organization solely to get a magazine, but to pay $39 because they also believe that through their membership, USNI is contributing to a better national defense for the United States of America.”

Reward is something that we all want. It is getting something back for our dollar.

The reward of membership in AAA that keeps renewal rates high is that if my car breaks down on a rainy night, someone will come and give me a tow or a jump. The 'towing' benefit is something that we would all like to have for our association.

Other organizations have succeeded in establishing interdependence through a very economically based reward system. One group accomplishes this deeper dependence through certification. Certification is required to practice in their field, and membership is required for certification. Clearly, interdependence exists here that has resulted in very high retention of members.

The most common reward that members look for from their professional association – according to Decision to Join -- is valuable training and information resources. Be sure to measure how your members think you are doing in these areas in order to establish their interdependence with you.

Recognition means that you know me, and I want to be known as one of you.It can be as personal as the great feeling of getting together with old friends at the annual convention or as technological as Amazon telling you what additional books you may want to purchase based on your previous selections. But the fact is that you are known, and this deepens your commitment and interdependence to the association.

Social media and Web 2.0 are perhaps the tools that will best help members connect with their association and build recognition going forward. Sara Costello, Manager, Global Strategy and Programs with the Society for Human Resource Management recently shared a great example of this on the ASAE International Listserv. She highlighted the just completed World Economic Forum in Davos, Switzerland which used blogs, flickr, You Tube, Podcasts, and Webcasts to build participation and recognition into the meeting.

Associations that have effectively applied all three of these glues of interdependence to their membership model have thrived.

How have you seen associations move from essentially a mailbox relationship to one of interdependence? Feel free to share your examples.

Comparing Wireless Phone Customer Churn to Association Membership Retention

Quick Quiz: Who has better retention rates, associations or wireless phone companies?

I got thinking about this the other day when I read a piece in the Washington Post on AT&T. They were highlighting that wireless “customer turnover narrowed to 1.7 percent to from 1.8 percent a year ago.” Sounds pretty good, except that they report turnover for each month. So that 1.7% monthly churn rate turns into an annual loss of 20.4% or a 79.6 percent retention rate. From my limited searching around, these rates are close to other wireless providers.

On the association side, ASAE and the Center report that the median renewal rate for individual membership associations is 87% and 94% for trade associations. [1] So associations win the churn battle. Good job!

What did you guess? What went into your thinking?

Having associations come out on top was a pleasant surprise for me. You would think that AT&T has some clear advantages to associations that might help them retain customers at a better rate. They have long term contracts with big cancellation fees, a monthly billing routine, and an opt-out instead an opt-in renewal system. Plus, they have the hot new iPhone.

If you are interested in looking at this comparison more deeply, take a look at the MSN article on a Virginia wireless company, NTELOS. At the end of the article it shows their SEC 10-K report on their wireless subscriber acquisition and renewal. It is remarkably similar to the dashboard report that I recommend to associations to keep track of membership growth and renewals. You can see the post for this on this July 9th.

[1] 2006 American Society of Association Executives (ASAE, Policies and Procedures in Association Management: A Benchmarking Guide, vol. 1 Membership P. 36.

Why get help for Membership Acquisition?

Many organizations seek outside help from advertising agencies and marketing firms when they are looking to acquire new customer or members. Why is that?

I think that the main reason is that we are very comfortable with using our “inside” marketing media channels. But we may need help when we try to employ less familiar “outside” marketing media.

As the following chart highlights, the process of making prospective members aware of an organization and recruiting them is highly dependent on the use of marketing media that does not reside within the organization. Outside media can come into play once again when a member defects from an organization.

Exploring Alternative Membership Models

A few weeks ago, I received an RFP from an association asking for consulting to help them explore new membership models. They currently offer traditional individual membership that includes a magazine and a discount on the annual meeting for dues of around $100. Not too different from many associations with whom I consult.

I thought that it was a very intelligent strategic marketing question for the association to ask. Probably every couple of years all associations should explore new membership models. And getting help from a consultant was also a wise move for this type of a study.

Anyway, the RFP got me thinking about the variety of membership models that now exist. Here is a list, off the top of my head, of my top 10. This is a brain dump, not the result of historical research. I did not include classic individual professional or trade association memberships in my list.

  1. Religious Membership – Maybe the oldest, still active form of membership is membership of a religious group. As one ancient text says, “And let us consider how to stir up one another to love and good works, not neglecting to meet together.” Faith based membership is to help change the heart, but donations are welcome.

  2. Credit Card MembershipAmerican Express was one of the earlier for-profit companies to coop the concept of membership. They used the famous tagline, “Membership Has Its Privileges” and charged an annual fee for the card, but made their profits on the use of the credit card. The new tagline is “Membership Begins with the Right Card”, and they have generally dropped the annual fee, but not the interest payments.

  3. Retail MembershipCostco was a revolutionary concept in retailing that started in the mid-1970s. “Membership was initially limited to small business owners, whose fees would also offset overhead costs.” Membership fees still apply. Costco offers three levels of membership, Executive, Business, and Gold Star memberships.

  4. Magazine Membership -- National Geographic started in 1888 and “[Alexander Graham] Bell and his son-in-law, [Gilbert Hovey] Grosvenor, devised the successful marketing notion of Society membership and the first major use of photographs to tell stories in magazines.” When you go to the National Geographic web site now, the focus seems to be much more about becoming a subscriber than a member.

  5. Insurance MembershipUSAA is a membership based around providing insurance and financial services to those in the military and their families. “In 1922, when 25 Army officers met in San Antonio and decided to insure each other's vehicles, they could not have imagined that their tiny organization would one day serve 6 million members and become the only fully integrated financial services company in America.”

  6. Alumnae Association Membership – As a member of the Dickinson College Alumnae Association, I get a magazine, online alumnae directory, my own web email account, an annual networking day, and the chance to participate in local Dickinson clubs. There’s no membership fee, except $43,000 annually for tuition, room and board, but donations are welcome.

  7. Electronic Membership – The Association for Supervision and Curriculum Development (ASCD) offers an innovative electronic only membership for $29 a year. It is truly a paperless membership including no mailed renewal notices and full access to magazines and newsletters.

  8. Avocational Membership – The Aircraft Owners and Pilots Association (AOPA) offers membership to those who are joined together by a common hobby or interest. Dues are fairly low at $39, but AOPA generates operating revenue from additional products and services ranging from aircraft insurance, to newsletters, to personal loans made available to members.

  9. Fund Raising Membership – Many donation driven, non-profits offer memberships including WETA the local Washington DC, PBS TV and radio station. As a member, you get a one-year subscription to WETA magazine, WETA member decal, volunteer opportunities, and television and radio station tours. Your motivation to write the check to support the cause.

  10. Frequent Flyer or Hotel Membership – “The first frequent flyer program was created in California by Western Airlines in June 1980,” according to Wikipedia. Soon after the airlines, hotels also launched programs like the Marriott Rewards membership.

What surprised me when I completed this list were just how many organizations of which I am a member. I am or have been a member of my church, American Express, Costco, Dickinson College Alumnae, USAA, ASCD, AOPA, WETA, and Marriott.

Each operates with a different financial model. Numbers of them let you in for free, but make money on secondary purchases.

Can you add any others to my list? Which model -- if any – would you recommend for your organization to explore?

Does Wal-Mart Announce a Price Increase?

We have all seen the Wal-Mart commercial announcing that prices are falling. But it occurred to me that I never see Wal-Mart or almost anyone else in the consumer world announce that prices are rising.

So last week while I was working on an article about pricing for the March issue of FORUM magazine of the Association Forum of Chicagoland, I dove back into the data from our Dues Increase Survey. I compared associations that said they announced and justified a dues increase to members to those who did not announce it or attempt to justify it.

The survey supports that silence may indeed be golden. It turns out that associations who raised dues but gave members no justification (i.e. to pay for new programs or advocacy) for the dues increase and those that did not make an announcement about the increase where more likely to subsequently see membership grow compared to any other option.

For example, groups that gave no justification were 33% more likely to see membership grow than those who justified the increase to support additional advocacy. And groups who made no announcement of a dues increase were 84% more likely to see membership grow compared to those who announced the increase at their annual convention.

For those of you who never want to hear about the dues increase research again, I promise to move on to other topics. For those who want a copy of the research, send me an email and I will provide it to you.

Membership Life Cycle Part III -- Membership Engagement

In earlier posts, I comment on the first two stages of the membership life cycle: Awareness and Membership Recruitment.
Now I want to focus on how we keep these new members from flying away from your association.

Once a member joins, he or she becomes the most likely member not to renew. Almost every association that I have worked with has its lowest renewal rate among new members. That’s why we call the first year of membership the conversion year.

Over the years, there have been many attempts at increasing renewals for these first year members. Some associations resort to sending the member a BIG new member kit to make them aware of all the association has to offer.

But there is a better solution. It is called engagement – encouraging and initiating interaction between the member and the association.

In a recent post on Growth through Membership Retention, I outlined the results from data analytics project that we conduction that showed for one association the powerful impact on renewals from different types of member interactions ranging from a member purchase to getting the member to call the association.

The survey results from ASAE and the Center’s, Decision to Join highlights the same concept. There is very little statistical difference between non-engaged members as lapsed members. “Those who are not involved lie perilously close to former members in their overarching assessments of the value they derive from associations. If former members are thought of as being dead, the uninvolved are close to comatose” (page 4).

So then how do we engage new members?

Many associations are now moving a conversion program which is a multi-step, multi-channel communication. The program is NOT built around informing the member about the association, but it is dedicated to generating a second interaction with the member. Essentially, a new member conversion program continues to “ping” the member until a response is achieved.

The program might include: a letter from the members personal member service representative asking them to call
  • an email assisting the member with registering for the password protected membership web site
  • a mailing with a dollars-off voucher for a first purchase
  • an email survey verifying the use of member benefits
  • a courtesy call to answer member questions
How important is getting a second purchase or interaction? In consumer marketing, customer-retention expert Jim Novo says, “If a customer has not made a second purchase by 30 days after the first purchase, the customer . . . is telling you something is wrong.”
Have you had experience in engaging members? Please share your thoughts.

Tips for Brainstorming Membership Marketing

I heard from several of you that with the start of the year you are thinking through your membership marketing plan for 2008. So I wanted to pass along a creativity tip that you may find helpful.

I have heard it said that creativity is not inventing something wholly new, but looking at what exists from a different perspective. Remember how you use to open a soda can?

That’s why I have found the questions provided by the late Bob Stone, in his landmark book, Successful Direct Marketing Method [1], useful in getting the creative thought process going. Here they are:
  • Can we combine?

  • Can we add?

  • Can we eliminate?

  • Can we make an association?

  • Can we simplify?

  • Can we substitute?

  • Can we reverse?

Give these questions a try at the start of your next marketing project. You may come up with a terrific new idea.

[1] Stone, Bob. Successful Direct Marketing Methods. (McGraw-Hill; 7 edition (2001) p. 468.

Thank You Ben

For a second year, Ben Marin of the Certified Association Executive Blog handed out what I will call the “Bloggies” for the best association blogs for the year.

Ben was very kind to pick the Membership Marketing Blog as the “best new blog about associations”. He wrote, “Tony Rossell at Membership Marketing Blog is holding both bloggers and the industry accountable. This year he went toe-to-toe with the anti-marketing meme at Acronym and The Decision to Join. He cites MGI client statistics and both secondary and primary research in his posts. For these reasons, he takes home the top spot for best new blog about associations.”

The other well deserved awards include the following.
For the second consecutive year, the “best association blogger of 2007” award went to Jamie Notter, the author of

The “best blog about associations in 2007” was awarded to Acronym, ASAE & the Center's official blog.

The “best new association blogger” goes to Maddie Grant, blogger at Diary of a Reluctant Blogger.

I sent a note to thank Ben for his dedication to association blogs. Conversations with Ben were actually part of the inspiration behind launching the Membership Marketing Blog. Thanks Ben!