Ten Top Membership Acquisition Offers

Many of us are enjoying watching the Olympics with the “thrill of victory and the agony of defeat”. But at least one marketer is frustrated with the amount spent on the TV ads without ROI.

Denny Hatch writes in Target Marketing, “Nothing—nothing!—bugs me more than advertising writers who call TV ads “winners” because they’re the “best-remembered” and/or “most-liked.”Did the ad sell anything? What was the ROI? . . . If you want a response from a prospect, it’s imperative that you make an offer. No offer, no response.”[1]

Hatch makes a good point. It is easy to get lost in creating memorable and entertaining marketing communications without being sure to focus on effectiveness. Just like the Olympic competition, your marketing can be set up to measure performance and show a clear winner and loser.

That’s why good membership marketing promotions include a compelling offer and ask for a response.

Here are 10 of the top membership marketing offers that have worked for my clients.

1. A discount almost always is the top offer in membership marketing. The amount of the discount must be appropriate to the product/situation. Generally a discount should be 15%-35% and move the rate below a price point. In membership acquisition, a properly developed discount will produce both more new members and more total revenue.

2. A "no-risk" or “no-obligation” offer will almost always out pull a "hard" (pay now) offer. It usually works best with organizations that have a lot of "mail box" benefits and higher priced dues. Accepting the no-risk offer includes the right for an invoice to be sent out and either paid or cancelled by the responder.

3. A product voucher offering new members $75 to $100 in savings on any purchase from the association can make a lot of sense. It has a high perceived value and helps the new members engage the organization with a second purchase right after joining. Typically, these vouchers will see a 20% redemption rate. So in theory the voucher can be 5 times higher than a discount.

4. Sweepstakes increase front-end response by 35% or more, but may decrease total paid response. Sweepstakes work best for impulse items, e.g., magazine based membership, contribution to a charity.

5. Premiums (free gifts) rarely beat discounts, but off-the-shelf items can be used at such little added expense that they make economic sense. The best premiums appeal to the self-interest of the reader (e.g., special reports or a salary surveys).

6. Offering more of the product can increase response (e.g., 15 months of membership for the price of 12). But generally this works best in markets where the product is already well known to the reader (e.g., qualified prospects, and former members).

7. A free trial offer will usually out pull a hard offer by at least 3 to 1 on the front end and 1.5 to 1 on the back end. But the key to making it work is developing a back-end conversion series to move the trial members to paid members.

8. A shorter term offer (e.g., 6 months membership) will pull up gross response, but beware; it may not increase response enough to cover the added costs of the extra renewal and loss of some buyers after the initial term sale.

9. Guarantees (i.e., money back if not satisfied) has become a basic “have to have” offer that is added to increase the confidence of the buyer. There is usually very little redemption on a money-back guarantee. If members do not like the product, they simply do not renew.

10. Installment billing with EFT or automatic credit card charges. This option turns a $239 membership into an easy monthly payment of $19.91. You do not pay for your cell phone or electricity up front, why should you have to pay your dues in one lump sum?

Okay, here is a bonus item.

11. Every offer should include an "upgrade option." An appropriate upgrade can attract 10% to 30% of the respondents to it. Offer a member an additional newsletter or an association book club option. We discussed some options in Growing Revenue through Membership Packaging.

Any special offer takes some time to make sure that back end operations support what is being offered up front.

Would you add any additional special offers here? What has worked best for you?

[1] Denny Hatch, “The Madness of Advertising on TV Blowing $750,000 in 30 seconds”, Target Marketing, August 19, 2008: Vol. 4, Issue No. 46


Kevin Whorton said...

Great, comprehensive post, Tony!

The discount and guarantee are such common tools of direct marketing and yet one always hears membership directors trying to 'protect' the value of membership. Not making membership free is smart; using offer techniques to drop the list price below the reserveration price of prospects who don't know the organization well enough to feel confident to step forward at full price is simply smart marketing to attract the less-familar and less-trustful prospect. Often it seems, seeing is believing and until (or unless) one's in the position of testing offers head-to-head it seems people have a hard time understanding just how well these techniques perform compared to the alternatives.

Tony Rossell said...

Thanks Kevin. I always appreciate your thoughtful insights. I agree, it is amazing how an offer test can really pop results up especially if you are going back to the same basic audience time afetr time. Tony