Four Reasons Why Thriving Membership Organizations Stop Growing

This is by no means and exhaustive list, but I have come up with a list of what seem like the four major reasons why a healthy organization can come to a dead end in membership growth. Feel free to add your thoughts on additional reasons.

Here they are.

1. Market Saturation: There is no such thing as perpetual growth. At some point every organization will hit a point of getting all the prospects who want to join.

2. Disenchanted Members: Whether it is poor customer service, a lack of new compelling content, or a weak fulfillment operation, unhappy members can stop growth fast.

3. Competition: Millions of smart people are daily trying to come up with a better products and services. If someone else can give better information, faster service, and lower prices, then an organization can be outflanked.

4. Inadequate Marketing: You can have market potential, happy members, and the best product, but if you do not get the message to the right people, then growth will stop.

Interestingly, although each of these situations can halt growth, I think that there are potential solutions that can help an organization “jump the curve” and extend growth. The solution starts with acknowledging there is a problem and then focusing on the root causes not the symptoms presented by the problem. Perhaps we can look at some of these options in a future post.


Jeff Hurt said...

Great post Tony.

I'll add a fifth one: Trying to be all things to all members.

Jamie Notter talks about this in his recent post "Being Something To Everybody."

Often success of a thriving organization is the factor that hinders future success. The organization tries to offer too many different experiences to cater to niche groups or they become the "one-size-fits-all" large department store service company. They are offering something to everyone. Unfortunately, offering something to everyone often leads to a lack of depth, the inability to lead the industry and cotton-candy fluff. This causes members to start looking for new leadership elsewhere.

Tony Rossell said...

Jeff – Very good insight. W. Chan Kim and Renee Mauborgne made a very similar point in their excellent book, Blue Ocean Strategy. They wrote the following:

“Typically to grow their share of market, companies strive to retain and expand existing customers. This often leads to finer segmentation and greater tailoring of offerings to better meet customer preferences. . . As companies compete to embrace customer preferences through finer segmentation, they often risk creating too-small target markets. To maximize the size of their blue oceans, companies need to take a reverse course. Instead of concentrating on customers, they need to look to noncustomers. And instead of focusing on customer differences, they need to build on powerful commonalities in what buyers’ value. That allows companies to reach beyond existing demand to unlock new mass customers that did not exist before.”(See my September 7, 2009 post: A Blue Ocean Strategy for Membership Marketing)

David said...

I would add arrogance combined with complacency since some associations do not have direct competition. We certainly see this with events when an annual convention is going very well and the event organizers become arrogant and bite the hand that feeds them.

crispy said...

Tony ..interesting information great comments ... can you give some thought to voluntary membership recruitment for a service directed at tourism industry

Tony Rossell said...

We have great success in the tourism industry using online tools. Please connect with me directly and I can put you in touch with our VP who heads up travel and tourism for my company. Tony