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?

14 comments:

Lindy Dreyer said...

Here's a kind of obscure one...orchestra membership. One of the orchestras I play for asks the musicians to "become members" for a nominal fee that supports the orchestra. It's not mandatory, but it includes comp concert tickets. That's on top of the audience, donor and grant support the orchestra receives. (They need every penny.) I bring it up because here's a case where "content providers" or an "inner circle" has their own special membership.

Scott Oser said...

Although many of these are viable models for membership I do not believe that many of them are truly appropriate for individual membership associations. Many of these models may result in a membership turning into something that it never should be--a commodity that is purely transactional. As everyone in membership knows, or should know, membership is not just all about having the best services at the best price. Although having the best services at the best price is definitely never a detractor I believe that the majority of your long-term members join for something more. They join for a connection with like minded people that they cannot get anywhere else. Many of the models you list do not offer the opportunity for that connection. Do you join National Geographic to meet people like you? No, you join to get the magazine. Do you join Costco to meet other people who like to buy 100 red peppers at a time or a bucket of mayo? No, you join for discounts (and of course for the free samples and cheap pizza). Do you give money to a charity to become a member? No, you do it to support the cause (or because you feel guilty because they sent you a ton of little stickers). Discounts, relevancy of magazines and favorite charities come and go but the personal connection that an association brings to the table will never go out of style. Therefore I would never recommend that any individual organization go to purely a commodity based model that does not allow for the connection that many members are looking for.

Kevin said...

Scott raises an interesting point, but there are some important memberships that Tony overlooked such as social media membership. You become a member of MySpace/Facebook specifically to connect with people. You become a member of YouTube or Flickr to host videos or pictures but also connections are made between people who find each other/comment each other. You become a member of AllRecipes to find and share recipes with other people. You become a member of any number of other community sites to connect with like-minded people (and that ain't Web 2.0, it's as old as the web itself).

There are also financial models for this. Many industries have niche web-only players who charge fees like $50 or $100 a month or a few hundred dollars a year (or for really specialized info, thousands of dollars a year) for access to both expert content and community such as listserves or forums.

My point is that Scott is correct, "connection" has always been an important role for associations, but I hope we don't still harbor the notion that we have a monopoly on it.

Tony Rossell said...

Lindy -- What instrument do you play? By the way, I posted a joke on your blog on your name post. Tony

Tony Rossell said...

Kevin -- Membership in the social media area is an excellent addition to the list. I am on Facebook, Linkedin, etc., but I did not think of it in terms of a membership. Tony

Tony Rossell said...

Scott -- I am not sure that I totally agree with you. Didn't you have people join AAAS just to get Science magazine? Also, I am pretty sure that National Geographic is a 501c3, so they are a real association already. And even with USAA, many of the members do feel that they are part of the USAA community. I am curious what do you think about each of these situations? Tony

KareAnderson said...

Great post! As well there's the membership models that mix social media services - some free and some available with membership.. thus warming up prospective members until some realize they want more and will become paying members.

One interesting example that's using more and more social media to pull in members - and people to start new chapters is (DWC)DowntownWomensClub.com. I interviewed founer Diane Danielson and was fascinated by the way she (and her team)are staying on the cutting edge of in-person and online services

- Kare

Tony Rossell said...

Kare -- Thanks for your feedback. By the way, I visited your blog. I look forward to spending some more time on it, but I am impressed with the frequency of your posts and how practical your advse is. Thanks for visiting. Tony

Anonymous said...

Great comments from everyone. As I looked through the list, I looked at some of the lessons that can be learned by such a list and it occurred to me that AmEx is a wonderful example in a lot of different ways. While AmEx is not accepted by as many merchants as VISA/MASTERCARD, it still has that "aura" or brand. I remember my first Gold Card and the look on the face of my date (yes, this was the early '80s) when I used that to pay for dinner. The cache was great. They then expanded their membership levels - Green vs Gold vs Blue vs Black vs etc. - by actively looking at the needs of their membership via interviews and monitoring purchase behavior, and developing sensible solutions (yep, at a price). All the while maintaining their brand.
Many associations would do well to think in these terms.

Tony Rossell said...

Dear Anonymous – Thanks for the post. Actually associations are following the same product line extension strategy that was used by American Express. Take a look at a post I did on tiered membership, Wednesday, September 5, 2007. It was titled: "Growing Revenue through Membership Packaging". Tony


Tony

Dean West, President, Association Laboratory Inc. said...

This has been an interesting discussion.

An important concept is how we define membership. Based on our research, we've categorized association marketing strategies into three types.

Membership strategies are based on the concept of affiliation between peers. These could be based on shared experience (medical associations) shared values (religious organizations) or shared interests (trade groups) but all revolve around affiliation.

A second strategy are product or non-dues based strategies. These are the familiar features - benefits solutions to a distinct need. You and others who purchase a product might be similar but it is not a requirement.

The third strategy we've called a bundled product strategy and this is frequently called a membership strategy. If people join an organization to receive a portfolio of products at a cheaper price than if they purchased them individually they are not "members" even though that may be the promotional message. They are "joining" to get stuff not to affiliate with peers. This would describe American Express, where membership is a promotional strategy designed to provide a bundled series of products and services.

Bundling strategies promoted as membership strategies can be very successful but it is dangerous to assume that people "join" your association as a member when in fact they are simply following the least path of resistance to purchasing products.

Tony Rossell said...

Dean -- Thanks for your insightful comments. I guess consultants categorize findings in threes. I just posted my three items related to membership interdependence. They allign with what you shared. Thy are, common vision (i.e. religious), reward, and recognition. I appreciate you sharing your insights. Tony

Mujtaba Mahmood - gtc.travel said...

One might think travel memberships are always kind of a vacation club or time share scam. Well, with a properly designed travel and tourism membership club it can save the traveler lots of cash and secures his/her travel by an annual family insurance, less expenditure on telecoms while traveling, discounts on hotels, cruise and others, plus of course lots of value in the customer service and online solutions.
Corporates need to think twice of the value they add to their clients to keep them their customers for a long period. Keeping intouch with them and tracking and reporting their spending might be a good strategy to retain those spenders and attract new ones by word of mouth marketing.
The effective membership program must have attractive values that one might think to buy to use.

Peggy Hoffman said...

Membership is the eye of the beholder. That's the take-away I get from this good conversation. I am a member of a dance group that pays no dues other than our volunteering - essentially to be a member means you help with the running the group. Is it a membership? Yes to me. Why, well I'm actively engaged in a group from which I get learning, collegiality, and fun.

I equally consider my WAMU membership a membership. In this case I give a donation, get a few premiums but most importantly feel like I'm in a group that is collectively creating a better media source.

I am also a checkbook member in two professional groups - and I'm happy (at least right now) that I can pay a fee and get a free free access items and discounts. So the commodity-based model works just fine there.

What sells is what the buyer wants.