The Pathway to being a Remarkable Association

Next week, I have the opportunity to do a presentation taking a look at the future of associations. I will start the talk by reviewing the past. Specifically, I am going over the findings of ASAE and The Center in 7 Measures of Success: What Remarkable Associations Do that Other Don’t.

As you may recall, this book resulted from a thorough study under the guidance of Jim Collins (Good to Great) comparing 18 matched associations. “The project’s value lies in discerning the often subtle differences between two well-matched organizations – what one association did or didn’t do to give it a performance or financial edge on its counterpart” (page 8).

I think the findings of this study are as valid today as they were in 2006 when the book was published. Here is a short review of the Measures of Success.

1. A Customer Service Culture -- “Remarkable associations build their structures, processes, and interactions – their entire culture – around assessing and fulfilling members’ needs and expectations” (page 24).

Customer service goes beyond customer satisfaction. In fact, we do not even ask customer satisfaction questions on surveys because we find that lapsed member report virtually the same level of satisfaction as current members.

2. Alignment of Products and Services with Mission -- “Remarkable associations speak passionately about fulfilling their mission and constantly test their ideas for products against that mission, using it as a touchstone for everything they do. . . To find the right mix of products . . . remarkable associations engage in experimentation” (page 28).

The goal for an association is to become an indispensible resource for a member. I think this comes from focusing on the three drivers of engagement, vision, reward, and relationship.

3. Data-Driven Strategies -- “If there is one phrase that sets remarkable associations apart from their counterparts, it’s ‘data, data, data.’ They gather information, analyze it, and then use it to become even better” (page 38).

As an example, just in the area of membership recruitment, testing and then analyzing data can commonly improve performance as follows:

• List tests – Can impact response by 500 percent.
• Offer tests – Can impact response by 200 percent.
• Creative tests – Can impact response by 100 percent.

4. Dialogue and Engagement -- “Many with the study group would no doubt echo the employee at the Society for Human Resource Management (SHRM) who said, ‘We all discuss decisions openly with each other. We have a desire to collaborate with each other, and we do it in mission-driven ways” (page 44).

SHRM membership is reported to have grown by from 36,000 in 1992 to over 250,000 today. Need I say more?

5. CEO as a Broker of Ideas -- “While CEOs may be visionary leaders, what’s more important is their ability to facilitate visionary thinking throughout the organization” (page 49).

We are in a knowledge economy. The organizations and clients that I have seen thrive have a culture of ideas. Ideas are the currency in the organization.

6. Organizational Adaptability -- “Our data confirmed that no organization – regardless of how remarkable it is – can predict change with full accuracy and therefore be on target with its response . . . Our data indicate that remarkable organizations do not panic . . . They maintain a clear understanding of their core purpose” (page 58-59).

Remarkably through this recession, we have seen a consistent trend that organizations that stayed in the market and continued to reach out to prospective members came through the past year in good shape.

7. Alliance Building -- “[Remarkable associations are] secure in who they are and what they bring to the table, these associations communicate clear expectations for each specific partnership and do not hesitate to walk away if a win-win situation does not materialize. But they’re also willing to admit what they can’t do on their own.”

Everyone wants to partner with successful organizations. Be sure to look in the mirror before you propose an alliance.

Unleash the Power of Market Testing in Your Membership Recruitment

Claude C. Hopkins is acknowledged as the great grandfather of direct marketing. In 1923, Hopkins wrote Scientific Advertising in which he declared that: “The time has come when advertising has in some hands reached the status of a science.” 1

His fundamental marketing thesis was: “We learn the principles and prove them by repeated tests. This is done through keyed advertising by traced returns . . . We compare one way with many others, backward and forward, and record the results. When one method invariably proves best, that method becomes a fixed principle.” 2

Today, his premise of testing is as true as ever. In fact, testing may even be more important now because the vast array of options available to marketers. A test can mean the difference between a stunning success for a product or an abject failure.

And because of the larger quantities and costs involved, testing is a particular necessity and an ideal opportunity when it comes to membership recruitment.

It is not uncommon to see a successful test change recruitment response rates by the following percentages:

• List tests – Can impact response by 500 percent.
• Offer tests – Can impact response by 200 percent.
• Creative tests – Can impact response by 100 percent.

These test outcomes highlight that by doing the same old thing over and over again, there is likelihood that a marketing program is substantially sub-optimizing the potential returns that could be achieved.

If testing is so important, then how should it be done?

There are two aspects of testing. Let’s call them the “art” and the “science” of testing.

The art of testing involves thinking outside the box and creating a new way to do things. In a market driven organization, each project should start up with a brainstorming session that asks: “What if?” or “How about?”

Bob Stone, in his landmark book, Successful Direct Marketing Methods, suggests creative helps like the following questions to get the thought process going. He recommends asking:

• Can we combine?
• Can we add?
• Can we eliminate?
• Can we make an association?
• Can we simplify?
• Can we substitute?
• Can we reverse? 3

Once a good set of test options has been developed, it is time to prioritize them. The key here is to test big things. Look for a breakthrough in testing. Too many testing dollars are spent on inconsequential testing – like who signs the letter. The fact is that testing small things will have such a small impact on the results that chances are good it will not have statistical validity.

In addition to brainstorming, there are some specific high leverage areas to consider testing. These high opportunity areas include the following:

Lists – One of the easiest and most productive tests is trying new lists. For a full discussion on testing lists, take a look at my post, Five Strategies for Picking the Best Marketing Lists.
FrequencyTry marketing more frequently to top prospects and customers.
Pricing and offer – Psychological price points are for real. As a rule of thumb, a price ending in a “7” or “9” will generate more orders and dollars. You can test price points by offering a special acquisition dues discount to new members.
Packaging – Test a bundled membership product instead of selling a one size fits all membership product.
Media – Many media are available today and need to be tested. Try direct mail followed by an email linked to a microsite compared to a stand alone email or mailing.
Messaging – Try new messages that emphasize a different value of membership. An easy and fast test of messages can be done with email subject lines. Send out a small portion of the list with a variety of subject lines. The group with the highest open rate wins and that subject line is used for the remainder of the list.

Equally important to the “art’ of testing is the “science” of testing. The science of testing starts with creating proper test structures. The key here is establishing a control package and testing against it. This is done by drawing a portion of names out of the control group of the marketing effort and using them for the test. Then structure the test by holding everything else constant except the variable that is to be tested. For example, if the test is for a special discount offer, then on the test segment use the same format as the control package and mail the test promotion to an equal ratio of the control lists in the mailing.

A test obviously does not always produce better returns than the existing control – that’s why to lower risks tests only go to small segments of a larger promotion. However, statisticians tell us that in each test cell we need a minimum of 40 paid responses to give us a statistically valid test. Therefore the number of anticipated responses will dictate the size of each test segment. If a 0.50 percent response rate is expected then the test cell should include a minimum of 8,000 names (40 / 0.005 = 8,000).

The other challenging yet critical component of the science of testing is tracking. Despite the difficulty in tracking, the bottom line is that the potential returns of testing are so great that one way or another an organization needs to build some kind of mechanism to track returns. Each organization will have to work with its computer staff and order processing staff to find the best way to track returns from a test. However, there are some methods of tracking used by other organizations that have performed well. These include:

• Laser Personalizing, ink jetting, or labeling the reply form with a keycode and requiring the form to be returned to receive a special offer.
• Performing a computer match between the returns from a given period of time and the keycoded mailing lists that were used in a mailing.
• Programming in a “special order code” in order forms on web sites that are required for special pricing or offers.

Once returns come back in, compare the responses in the control group against the test cell. Look to see which cell generated a higher return on investment and make the best performing test your new control.

Testing is an ongoing process. Over time, it becomes part of the culture of an organization. A focus on testing ensures the flow of new ideas and new members that an organization needs to keep growing. And it also provides a methodology for validating each of these new ideas.

To quote Claude Hopkins again, in the past: “Advertising was then a gamble – a speculation of the rashest sort. One man’s guess on the proper course was as likely to be as good as another’s . . . That condition has been corrected . . . Advertising has flourished under these new conditions. The results have increased many fold just because the gamble has become a science.” 4

Testing in membership recruitment allows your organization to market more efficiently. And if Claude Hopkins could do tests back in 1923, I am sure that there is a way to build testing into your membership marketing efforts.

1 Claude C. Hopkins, Scientific Advertising, NTC Business Books, 1991, page 213
2 Ibid, page 215.
3 Bob Stone's landmark book, Successful Direct Marketing Methods, 1997, NTC Business Books

4 Claude C. Hopkins, Scientific Advertising, NTC Business Books, 1991, page 217-218

Membership Marketing: The Best Opportunity for Associations to Thrive and Succeed

Last year, I wrote an article for the Avectra Academy newsletter. Just now, in response to some social media dialogue comparing associations to the plight on today’s newspapers, I shared the link with my perspective.

Take a look and feel free to post your thoughts here. Is traditional association membership on a death march or is it the best opportunity for associations to grow and thrive in the future?