Membership Renewals: A Couple of Quick Tips

Here are a couple of quick thoughts you might want to try to improve your membership renewal rates.

1. Frequency – How many touches do you have in your membership renewal program and how do you know how many you should have? Here is the rule of thumb; you should continue to spend money on renewal or reinstatement efforts until it costs less money to bring in a new member. Based on this formula, I know one membership organization that now has a 40 touch renewal program that includes mail, phone calls, and email.

2. Offers – Many membership organizations are finding that renewal payments are getting later and later from members. This is costly because more renewal efforts are sent out and it hurts cash flow. Here is how one group has moved up payments. They have included a product voucher offer in their early renewal notices. If a member renews early, a voucher or coupon is sent to the member that they can redeem toward the purchase of a product or service from the organization. Offering the voucher has lifted early renewals, but a low redemption rate has cost the association very little. And any member who makes an additional purchase from an association has a much higher likelihood of renewing in the subsequent year.

3. Channels – In some social media that I monitor, I hear the question posed, “should I move my renewal efforts from mail to email?” I think that the answer should not be “either/or”, but it should be “and”. In our 2010 Membership Marketing Benchmarking Report, we highlighted that 88% of associations now use email in their renewal program compared to 83% in 2009. Associations using direct mail for renewals dropped from 91% to 85%. But based on these high percentages, it looks like most groups use both of these channels. What seemed to most positively impact renewals was adding additional communication channels. For example, staff renewal phone calls, fax, and peer member contacts were positive indicators for renewals with the groups that used these channels.

Feel free to add any additional tips that you might have to the comments section below.


Nicole said...

Thanks! This is quite helpful as I work to modify our renewal process. What would you say is the average retention percentage? We're currently at 75.8% and are trying to determine if that is good or bad.

Tony Rossell said...

Hi Nicole -- I am glad you found the information of help. If you look at my post titled, "Retention Rates by Membership Size and Association Type", you will see a break out of renewal rates from last year's benchmarking report. In this year's report, on page 37, I show the reported increases or decreases in renewal rates. I did it this way because it is really challenging to compare renewal rates from one organization to another. If you want to read about why these comparisons are a challenge read my post, "No Good or Bad Renewal Rates". I hope this helps. Tony

Nicole said...

Thanks, Tony! I'll take a look.

dwalter said...

Hey Tony -

You are totally correct that all channels must be used. In discussions I have had with other association marketing professionals, I have found that most associations have a very limited number of touches. While I am not sure I would advocate 40, at a minimum there should be at least 8 and probably 10. Of course, you then put the expires into future direct mail as well.

I would also advocate renewing members at the association annual conference. You can do it no matter when the cycle is, give a tshirt or a poster as an incentive. Amazing what members will do to get a shirt. Also, try to sell multi-year renewals.

Tony Rossell said...

Your conference suggestion is excellent. I have also seen it used with very good effectiveness. Thanks for adding the insight. Tony

Shelby Truxon said...

Hi Tony,
What are you suggestions for renewal notice subject lines? Do you find putting a call to action in the actual subject line creates more of a response or is it best to keep it generic (ex: 2011 Renewal Statement)?



Tony Rossell said...

Hi Shelby -- From my experience, it seems that the more administratively focused the renewal email can be the better it will perform. A simple subject line like "Membership Renewal" or "Membership Status" will probably work better than "Don't miss these 6 benefits". But the great thing about subject lines is that they are about the easiest thing to test. Tony