So as part of our Membership Marketing Benchmarking Research, we asked what recruitment offer was most effective in getting the most new members. We also cross tabulated their answers with renewal rates.
Respondents reported that the best recruitment offer was a “discount on first year dues”. This did not come as a surprise to me, because I have tested a discount many times and with a variety of organizations. It has consistently tested well.
But here is a BIG SURPRISE. Some marketers claim they do not use a discount because it will hurt renewal rates. However, the research shows that of those who offered a new member dues discount 75% had renewal rates of over 80% and 25% under 80%. This outperforms the overall respondent base with 68% having renewal rates over 80%. In other words, new member discounts actually correlate with higher membership renewals.
Here is how respondents report the “most effective offer in getting more new members”.
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4 comments:
I just discovered your Blog yesterday. By far one of the best I have seen so far---not just full of trending info but great stats to back it up. And it's all about the numbers at the end of the day. I hope you don't mind if I tweet this out.
Tony,
I think your theory that new member discounts correlate with higher renewals requires a huge leap of faith. Lots of variables impact whether one will renew their membership or not and I do not think your research gives you the information you need to make a bold statement as you have.
Did you ask organizations that offered discounts to new members at what price they asked those members to renew for year 2? Was it full price? A step-up price but still not full price? At the same introductory price they originally joined? First time renewal pricing can have a huge impact on a members decision to retain their membership.
Did you ask organizations that offered a discount to new members if they had a special communications process where they spoke to new members who joined at discounted prices more regularly, or more one to one, or anything else special think might have made them more likely to renew in year 2?
Did you ask organizations who offered other incentives like 15 months for the price of 12 or an editorial premium or something else that would new members more exposure to the type of benefits they would receive as a member what their first year renewal rate was and compare that to first year renewal rates for organizations offering discounts to new members and see how they differed?
I am not trying to say your research is faulty as I think it provides some great information. I just think that when we are looking at something as complex as membership marketing we need to be careful not to draw conclusions too hastily and without as much data as possible.
Scott
Hi Terry -- Thanks so much for your encouragement. I get a kick out of writing the blog and I am glad that you find it of use. Please feel free to actively participate in the conversations we have here. Your perspectives would be valued. Tony
Hi Scott – Thanks for reading and commenting on the blog. You ask good questions.
I actually was very careful in my choice of words related to my post on discounts and renewals. I used the word “correlates” instead of using a word like causes or predicts.
Here are the facts. What the survey found was that respondents reported dues discounts as the most effective membership recruitment offer. When I cross tabulated this with groups that had a renewal rate of 80% or better, I found that on average those who said that recruitment discounts were most effective also reported higher renewal rates than the norm. I am not saying that discounts cause higher renewals or renewals cause discounts.
As you may know, the common wisdom that I have often heard from marketers is that discounts cause lower renewal rates. The purpose of highlighting what the research showed was to at least help marketers to take a second look at that premise and test into it in their own association.
Does that explanation help? Thanks for your thoughts. Tony
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