Membership is a "push" product. This means that prospects need to be pushed or encouraged to join. That is why direct response media like direct mail and email are the channels of choice to acquire new members.
But just like any tool, these channels can be used poorly or effectively. I have distilled some of the experiences that I have found in direct response membership marketing down into eight tips. I hope you find them helpful.
1. Begin each and every campaign by thinking creatively and asking “WHO MIGHT BE INTERESTED IN JOINING?” Then search out lists that contain these potential members. Not taking the time to research and test mail and email lists is the single biggest mistake in membership recruitment. In any given outreach, the results from one list to the next can vary by 1,000%. Even if you primarily promote to an in-house prospect list, try some direct response rental lists and compare results. You may be very surprised at the results from tapping into a new file of prospective members. Some of the best outside lists to test are members of similar associations, subscribers to industry magazines, and buyers of books related to your association. Tip: Ask current members what other professional literature that they read and test these lists first.
2. Once you have found the best lists, carefully develop a strong Unique Selling Proposition (USP) to drive the positioning and copy of your promotion. The USP answers the prospect’s question of “WHY THIS ASSOCIATION?” The USP is the big benefit that your association can deliver compared to any other group. Tip: Ask someone who is not familiar with your organization to read your copy and define the USP in one sentence. If they can't, go back to the drawing board.
3. Develop a special offer to answer your prospect’s question: “WHY JOIN NOW?” After many tests, one of the best offers continues to be a limited-time, introductory dues discount. Ideally, this discount will bring the dues down to a psychological price point – a dues amount that ends with a dollar amount of a “7” or “9”. For example, an acquisition price of $139 will typically generate more revenue and members than a price of $150. But be sure to offer something. Direct response marketing is offer driven.
4. Build your promotion around a metaphor -- something a prospect will recognize and know what to do with. Try using an invitation, survey, certificate, or temporary membership card format. People process information by putting it into mental boxes. They make a split second decision on whether a promotion is important or not, so you need to get their attention. An invitation, for example, typically requests a response and goes in the mental box that says: “I NEED TO RSVP”.
5. After you have found your lists and selected a format, the time has finally come to write. As you write your promotion think of a conversation between a salesperson and a prospective member. (Tip: Sometimes it is helpful to dictate or "talk through" the first rough draft of the letter on a tape recorder.) Ask and answer the questions any prospective member would ask. And be sure to deal directly with typical sales objections (e.g., “IT SEEMS TOO EXPENSIVE”, or "I’M NOT SURE IT WILL BE USEFUL TO ME.") As you write, also be sure to include specific proof. Support your USP by answering the prospect’s question, “HOW DO I KNOW I CAN BELIEVE YOU?” with real examples, numbers, product data, and testimonials.
6. Now it is time to design the promotion. If you are using direct mail, make the investment in a computer-personalized format (i.e., lasering the name and address on the letter and reply). In membership recruitment, personalization will out pull a “Dear Colleague” letter by as much as 30% while the cost of producing the package will typically increase less than 10%. If you are using email, create a personalized landing page that highlights the prospects particular interests and the special offer that the email features. Maintain the tone, look, and message of the email on your landing page.
7. As you near completion of your promotion, don’t give into the desire to put a “cute” phrase or “teaser” on the envelope or in the email subject line. Pre-test the subject line on a few hundred emails and measure the open rates. Based on this roll out the top performing line. With mail, a teaser will generally not increase response for a membership recruitment piece. Instead, maintain the personal business correspondence look of the mailing.
8. Finally, before you send out your promotion, be sure to set up a system to accurately track responses. Accurate tracking and analysis remains one of the most underdeveloped areas in association marketing. Yet, it is the key to validating all of the work that has gone into creating a promotion. If computer personalization is used for a mailing, then assigning a specific key code to be added to each reply form is simple. A separate code needs to be used for each list and for each test segment (i.e. copy test, offer test). Then as response comes back, the codes need to be recorded. Email responses can be tracked by adding a cookie to the email that populates the code field in your application or by setting up unique URL’s for each test segment. The ultimate goal of tracking and analysis is to determine what lists, copy, packages and offers produce the best return on investment for each marketing dollar spent.
Let me know what you think of these points and feel free to share any additional tips that you might have here.
Encouragement to Innovate and Strengthen Membership
As you may have gathered by reading this blog, I am an optimist. So amidst all of the negative data that we see circulating, I thought I would point out a couple of positive perspectives.
Let me start with an interesting factoid that I came across the other day. What decade in the 20th century do you think had the fastest productivity growth? Most people pick the 90’s with the development of the internet. It actually was the 1930”s.
[“Recession] is often a stimulus for the adoption of new technologies. The decade of highest productivity growth in the 20th century was the 1930s. In the 1930s a lot of technologies developed in the 1920s were put into use because people were looking for any angle to improve their productivity. The personal computer revolution took off in the early 1980s when we had a really lousy recession.” [1]
I see our current time as a period where we can choose to hide and retrench or be challenged to innovate. I see many groups taking the innovation challenge.
The second piece of encouraging news comes from the data from Kevin Whorton’s Survey Report: Economy's Effect on Association Membership Programs that was released and shared at the Alexandria Brown Bag lunch last week. Scott Oser and Erik Schonher also presented at the session with Erik sharing his Whitepaper on marketing in a recession.
The research shows that associations are seeing shortfalls in revenue in a number of areas. But as I have reported, it also looks like membership acquisition is performing better than other areas for many associations. Kevin’s numbers encouraged me in this belief.
The survey reported that 23 percent of individual membership associations (IMO’s) are seeing a decrease in the number of “new membership inquiries” over the past six months. That means that 77 percent are seeing the same number or an increase.
Based on working with associations for over 20, it is pretty normal to have 23 percent in a membership decline.
I am also encouraged by the response to innovate and do more that many associations reported in the survey. Despite the current conditions, 66 percent of the IMO’s are “increasing” their membership touches in order to strengthen their membership during this time. And only 14 percent of IMO’s are eliminating campaigns.
What are your takes on this research and the opportunities to innovate? Please feel free to share.
[1] Awar Bhide, Facetime, BusinessWeek, January 7, 2009.
Let me start with an interesting factoid that I came across the other day. What decade in the 20th century do you think had the fastest productivity growth? Most people pick the 90’s with the development of the internet. It actually was the 1930”s.
[“Recession] is often a stimulus for the adoption of new technologies. The decade of highest productivity growth in the 20th century was the 1930s. In the 1930s a lot of technologies developed in the 1920s were put into use because people were looking for any angle to improve their productivity. The personal computer revolution took off in the early 1980s when we had a really lousy recession.” [1]
I see our current time as a period where we can choose to hide and retrench or be challenged to innovate. I see many groups taking the innovation challenge.
The second piece of encouraging news comes from the data from Kevin Whorton’s Survey Report: Economy's Effect on Association Membership Programs that was released and shared at the Alexandria Brown Bag lunch last week. Scott Oser and Erik Schonher also presented at the session with Erik sharing his Whitepaper on marketing in a recession.
The research shows that associations are seeing shortfalls in revenue in a number of areas. But as I have reported, it also looks like membership acquisition is performing better than other areas for many associations. Kevin’s numbers encouraged me in this belief.
The survey reported that 23 percent of individual membership associations (IMO’s) are seeing a decrease in the number of “new membership inquiries” over the past six months. That means that 77 percent are seeing the same number or an increase.
Based on working with associations for over 20, it is pretty normal to have 23 percent in a membership decline.
I am also encouraged by the response to innovate and do more that many associations reported in the survey. Despite the current conditions, 66 percent of the IMO’s are “increasing” their membership touches in order to strengthen their membership during this time. And only 14 percent of IMO’s are eliminating campaigns.
What are your takes on this research and the opportunities to innovate? Please feel free to share.
[1] Awar Bhide, Facetime, BusinessWeek, January 7, 2009.
Is Loyalty All that it is Cracked Up to Be?
With the job cutbacks that we see each day in person or in the press, I was intrigued with some comments from Jack and Suzy Welch in a recent column.
They wrote, “These days, it’s far more common for managers to protect and reward employees who consistently deliver results. We’re not saying that loyal employees aren’t given any due. When the economy is strong, a record of loyalty can be enough to ‘give cover’ to an employee with a mediocre performance. But when the going gets tough and staff reductions become necessary, the vast majority of mangers act in the best interests of the company. Their top performers will stay, loyal or not. And the marginal employees – again loyal or not – will be asked to move on.” [1]
As I read this, I could not help but think about membership. Members may stay loyal in the good times, but when economically pressed, members may very well follow the same decision process. They will renew membership with the organization that delivers real value and helps their performance.
[1] Jack and Suzy Welch, The Loyalty Fallacy, Business Week, January 19, 2009.
They wrote, “These days, it’s far more common for managers to protect and reward employees who consistently deliver results. We’re not saying that loyal employees aren’t given any due. When the economy is strong, a record of loyalty can be enough to ‘give cover’ to an employee with a mediocre performance. But when the going gets tough and staff reductions become necessary, the vast majority of mangers act in the best interests of the company. Their top performers will stay, loyal or not. And the marginal employees – again loyal or not – will be asked to move on.” [1]
As I read this, I could not help but think about membership. Members may stay loyal in the good times, but when economically pressed, members may very well follow the same decision process. They will renew membership with the organization that delivers real value and helps their performance.
[1] Jack and Suzy Welch, The Loyalty Fallacy, Business Week, January 19, 2009.
Cut Budgets without Cutting Marketing
Many organizations are feeling the pressure to cut membership marketing budgets these days. I have argued on this blog with that mind set, but today I want to give a very practical tip on how to cut your budget and not cut any of your marketing activities.
Here is how.
When a member joins or renews with an organization, the cash payment is typically not realized at the time of payment. Instead, most organizations accrue the payment over the year the member will be served. So one twelfth of the dues are realized each month.
However, almost all non-profits that I know realize the marketing cost at the time the expense is incurred. The impact of this is if you spend $120,000 the last month of your fiscal year on a membership marketing campaign, all those costs are typically realized in that month even thought the resulting revenue is spread over 12 months.
So here is the opportunity to save money. There is a little know AICPA Accounting Standards, SOP 93-7, on Advertising Costs that allows for direct response advertising to be spread over the time of the delivery of the member benefits from a promotion.
The standard says, “The amounts of direct-response advertising reported as assets should be amortized over the estimated period of the benefits, based on the proportion of current period revenue from the advertisement to probable future revenue, subject to a net realizable value test.”
By the way, as a disclaimer, I am not an accountant. So please work with a financial professional on putting this practice into place.
So what are the implications of this standard?
Going back to our example, using this accounting practice, you would only have realized $10,000 of your marketing budget for your acquisition campaign instead of $120,000 effectively cutting your marketing budget without cutting the program. The remainder of the project costs would be spread over the next 11 months in your upcoming fiscal year.
In times when every penny counts, linking membership marketing costs to when membership dues revenue is realized is a smart way to stretch your budget.
Here is how.
When a member joins or renews with an organization, the cash payment is typically not realized at the time of payment. Instead, most organizations accrue the payment over the year the member will be served. So one twelfth of the dues are realized each month.
However, almost all non-profits that I know realize the marketing cost at the time the expense is incurred. The impact of this is if you spend $120,000 the last month of your fiscal year on a membership marketing campaign, all those costs are typically realized in that month even thought the resulting revenue is spread over 12 months.
So here is the opportunity to save money. There is a little know AICPA Accounting Standards, SOP 93-7, on Advertising Costs that allows for direct response advertising to be spread over the time of the delivery of the member benefits from a promotion.
The standard says, “The amounts of direct-response advertising reported as assets should be amortized over the estimated period of the benefits, based on the proportion of current period revenue from the advertisement to probable future revenue, subject to a net realizable value test.”
By the way, as a disclaimer, I am not an accountant. So please work with a financial professional on putting this practice into place.
So what are the implications of this standard?
Going back to our example, using this accounting practice, you would only have realized $10,000 of your marketing budget for your acquisition campaign instead of $120,000 effectively cutting your marketing budget without cutting the program. The remainder of the project costs would be spread over the next 11 months in your upcoming fiscal year.
In times when every penny counts, linking membership marketing costs to when membership dues revenue is realized is a smart way to stretch your budget.
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