A Tool to Build Your Marketing Plan

In my mind, the key coordinates of creating an effective marketing plan are connecting each market segment with the proper marketing channels, value proposition, offers, messages, and frequency.

So I have created a template (below) to use for planning and brainstorming sessions to help make these connections.

To use the template, start by inserting your market segments in the left hand triangle – from most productive to least productive. Along with the name for the market segment, you can also list the estimated quantity of prospects in that group. Then work through the matrix to the right.

For example, if you are creating a plan for membership recruitment, your best market segment might be lapsed members. Because they are so responsive, you can use fairly expensive channels to reach them, so you might put staff sales calls, telemarketing, direct mail, and email as the channels. The value proposition, offer, message, and frequency of contact for this segment will also be different than reaching out to another segment with less awareness or affinity for your organization.

Once you have completed filling in each quadrant of the matrix, you basically have your marketing plan done. I have provided for up to six market segments, but you obviously may have more or less than this to target in your plan.

If you would like to make adjustment to this template or be able to type content into the blanks, I can provide an Excel spreadsheet of this document. Please let me know if you would like one sent to you.

Eight Membership Retention Strategies and Ideas

The simple answer to improve membership retention is to provide more value and engage members. That said there are also very practical marketing tips that can help you keep more members. Here are some to keep in mind:

1. Frequency – Like it or not, people forget to renew. Don’t give up too soon on retaining a member.

2. Channels – Use all of the tools that are available to you for retention – mailed notices, postcards, email, staff or volunteer calls, telemarketing, and website interstitials.

3. Conversion – Almost always, first year members are the least likely to renew. That’s why the first year of membership is called the conversion year. Focus time, effort, and budget on these first year members.

4. Budget – As long as you are not spending more to renew members than to acquire a new member, you are budgeting fine.

5. Payment – Offering payment options, especially some form of automatic credit card or EFT renewal, turns renewals from an opt-in decision to an opt-out action.

6. Offers – This is highly debated, but some organizations have great success with giving incentives for early renewals. It may be worth a try using a postcard and a website only promotion code to track effectiveness.

7. Personalization – Adding personalized messages to renewal notices can be effective. For example, “because of your membership, you saved $50.00 on your product purchases this year.” Or, “we had some success on the legislative issue you were most concerned about.”

8. Analytics – Figure out what segments of your membership are most likely to renew and which are least likely and allocate your resources. Your best members may only need a few contacts and more effort may be needed for your lower responding segments.

I hope this gives you some food for thought. Feel free to add your successful strategies, tips, and ideas below.

Mark your Calendars for an Upcoming Membership Marketing Webinar Series

I wanted to invite you to take part in a free webinar series. The series will include sessions from highly regarded and talented membership professionals. The focus of the webinars will be around recruiting, engaging, and keeping members.

As part of the series, I will be presenting a session titled, “Diagnosing and Solving Your Membership Marketing Challenges”.

My webinar is scheduled for Wednesday, January 9, 2013 at 2PM Eastern.

The webinar series is sponsored by the following groups, Young Association Professionals, Aggregage, Association Universe and Infinite Conferencing.

Here is the site to learn more about this series and to register.

Are You Keeping Up with the Digital Marketing Revolution?

More and more of the marketing dollars for my clients are moving to digital channels to build awareness, generate leads, and recruit members and customers. The majority of the money is flowing to various Google ad options, Facebook, and LinkedIn with a good amount also going to specialized ad networks.

But it is not just membership organizations that are moving in this direction. Business Insider shared the following graph on the rapid growth of digital advertising in a presentation on The State of the Internet.

Clearly traditional channels like email, direct mail, and telemarketing are still great tools and in some cases more cost effective than online marketing. But when you want to market to populations that are hard to find on traditional lists, online marketing is hard to beat.

How is your organization experimenting with digital advertising channels?

Two New Membership Models that are Thriving and One Membership Model that is Struggling

As they look to the future, many membership groups are looking for ways to either increase revenue of cut costs. To achieve this, they are introducing new membership models. Here is what I am seeing with some recent programs that our clients have developed.

1. Premium Membership – There are always highly committed members that want the top individual membership available. So one group I work with added some low cost, but helpful, new benefits to their regular membership and created a plus or premium option. They priced the higher level membership at $97 compared to the regular membership price of $49. With very little promotion members have moved to this new category primarily as they see the option when they renew online. It has increased revenue at almost no additional cost.

2. Institutional Membership – Traditionally membership associations are either an individual membership organization (IMO) or a trade association with company or organizational memberships. However, many IMO’s are creating a hybrid model where they continue to offer an individual membership, but also make available an institutional membership that includes benefits for multiple individuals in the organization. The results are very positive, more revenue and higher retention rates. Essentially these associations have grown their share of wallet beyond the one or two memberships that they normally would have from a single organization to a much higher dues figure.

3. Online Membership – As a cost cutting measure some associations have offered a lower price, paperless membership. All of the services are delivered electronically. Initial signups for this type of membership are good because of the lower dues amount. However, renewal rates for this membership category have been disappointing for many organizations. I have seen renewal rates as low as 15 percent. The challenge with the electronic membership model may be that online members do not receive the “push” of tangible mailed services with their membership. They have to be very proactive to extract value from the membership. And many do not have the time or take the initiative to benefit from services that are not pushed directly to them.

Exploring new membership models is part of the formula to keep a membership strong and thriving. However, not every new membership model works. What new membership models have you tried in your organization?

How to Budget for Membership Recruitment and Renewals

Most membership marketing budgets are built backwards. An organization determines how much it can spend and then asks the membership staff to use it in the best way possible.

But the correct question should not be how much you are allowed to spend, but how much you can generate in revenue for the organization. In other words, base budgets on the harvest, not on the cost of the seeds.

Here is an example.

One group that I work with on renewals has an average dues rate of $95. They run a nine part mail renewal program with supporting emails. The incremental cost to service a member is approximately $24 per member.

Here is how much they spend to renew each member from each renewal effort (cost of the renewal effort divided by the number of members renewing with that effort):

• Effort #1 -- $ 2.31

• Effort #2 -- $ 4.05

• Effort #3 -- $ 8.75

• Effort #4 -- $10.24

• Effort #5 -- $15.96

• Effort #6 -- $10.15

• Effort #7 -- $ 9.36

• Effort #8 -- $ 20.54

• Effort #9 -- $ 37.61

So by the last effort, they are spending over $37 to get a member to renew. Is that too much? I would argue that it is probably makes good economic sense for this organization to push even harder for renewals because they are still making a profit for the organization on effort #9 of $33.84 per member (($37.61 + $24.00) – ($95) = $33.84).

The good news is that this group is basing a renew budget on return on investment that they monitor for each effort instead of on an arbitrary cost budget.

The same evaluation can be done for membership recruitment. As I noted in my August 16th post, a new member will produce a predictable income stream for an organization. This income stream is called lifetime value.

If you know the lifetime value of a member and the cost to service the member each year, you can establish the “margin” that a new member will produce for the organization over time. Knowing the lifetime margin a new member will produce then allows you to build a budget based on ROI instead of on what funds are allocated or might be available for membership recruitment.

So with the organization highlighted above, if the average member stays for 5 years, the dues revenue stream is $475 and the five year servicing cost is $120, producing a lifetime margin of $355.

Knowing these numbers allows the recruitment budgeting discussion to be driven by how much the organization wants to invest to produce $355 income stream from each new member.

The bottom line is that you should not budget backwards for membership marketing. Budget based on the return on investment that each membership marketing dollar will produce for your organization.

Whitepaper with Tips on Membership Association Marketing Released

We have issued a new whitepaper, “100 Super Hints Revealed” focused on tips to help membership associations market more effectively. It is a free download and provides good reminders for experience pros and new marketing professionals as well.

Here is a selection of some of the tips that I like.

3. What’s your “USP” (Unique Selling Proposition)? If you had 15 seconds to convince someone, what would you say? What sets you apart from others?

10. Use what works don’t reinvent the wheel. If it works, use it. If it doesn’t, try something else. Incorporate a “test” into every effort you do.

15. Write the Order Form first since marketing is “only” about sales; your order form is the most important piece in your package.

55. Use a List Broker. They usually work FOR FREE and can help you with research, trade customs, and problems.

73. If your sale has to be approved by others try mailing the influencers as well (e.g., the prospect, their boss, their accountant, etc.).

81. Test, Test, Test. As soon as you find something that works, beat it.

84. Incentives work. Use discounts, premiums, and coupons. Everyone likes to think they’re getting a deal.

Here is the link for the free download. Feel free to add your tips in the comments section below.

Presentation Slides for the Membership Marketing Benchmarking Report Now Available

Over the last couple of months, I have been asked a number of times for content from our Membership Marketing Benchmarking Report to use for staff or board presentations. In order to make the material easier to access, I have loaded my standard PowerPoint presentation onto Slideshare.

You are welcome to use the information; I simply ask that you attribute it back us when you share the findings. I hope that you find it of help.

Membership Marketing from A to Z

Here is something that I have wanted to put together for a long time.  It is a glossary of membership marketing terms linked to past posts that I have done over the years.  I have called it "Membership Marketing from A to Z". 

As you will note, I still do not have an entry for "X", so feel free to share your ideas.  Your feedback will also be appreciated on topics that are important that I have missed.  Generally, the reason a topic may not show up here is because I have not had a post to link to it.  But share the idea and maybe it will prompt me to put a post together on the topic.  All comments are welcome. 

A. Alternative Membership Models

A. Awareness: Starting the Membership Relationship

B. Branding

B. Brainstorming

C. Conversion of New Members

D. Dashboarding Membership

D. Discounting Membership Dues

D. Dues Increase

E. Economics of Membership

E. Engaging Members

F. Freemium Membership

F. For Profit Membership

F. Free Trial Membership

F. Frequency of Contact

G. Group Membership

H. Hiring Marketing Help 

I. Installment Dues Payments

I. International Membership

J. Joining: The Need to Belong

K. Keeping Members

L. Lead Generation and Conversion

L. List Selection

L. Lifetime Value

M. Maximum Acquisition Cost

M. Market Expansion Strategy

M. Marketing Plan

N. New Product Development

O. Offers to Incentivise New Members

P. Payment Options

P. Pricing Strategies

Q. Qualitative and Quantitative Reseach

R. Recruitment

R. Reinstatement 

R. Renewal Rate

R. Renewal and Retention

S. Segmentation Strategies

S. Steady State Analysis

T. Tiered Membership Structure

T. Test Marketing

T. Trade Show Member Sales

U. Unique Selling Proposition

V. Value

V. Volunteers

W. Website Maximumization

Y. Younger Members

Z. Zero Growth (4 reasons)

Under Investing in Membership Recruitment: The Biggest Mistake made by many Membership Organizations

This afternoon, I was interviewed for an upcoming article on association membership. The writer asked me, “What do you think is biggest mistake that organizations make in the membership marketing?”

I shared with him that for me the answer is pretty simple. Most membership organizations under invest in getting new members.

Frequently, I speak with organizations that have very lofty plans on how many new members they want to add. When I ask them what they have budgeted to accomplish this, the answer is shockingly low.

One recent group I spoke with, for example, wanted to stem their decade’s long membership decline by developing a marketing campaign to recruit an additional 3,000 members over the next year at a dues rate of $65 each. However, they only budgeted $30,000 to accomplish this goal or $10 per new member. Unless they discover a marketing silver bullet, it is unlikely that they will accomplish their membership goal.

At the same time, members in this organization typically stay for four years. So from the members that they acquire, they will realize an income stream from each new member who joins of $260 plus any revenue from non-dues purchases. Assuming that they have incremental servicing costs of $15 per member, per year, a new member represents a $200 net revenue stream for the organization.

How much should an organization be willing to spend for a new member in order to produce $200 in net revenue? They should be willing to spend more than $10.

The basic mistake that many membership organizations make is that they under estimate the cost of acquiring a new member and they overlook the lifetime value that a new member can deliver to the organization.

The Membership Lifecycle Turns Five

Way back in 2007, I developed a white paper around a concept that I called the Membership Lifecycle. The concept was built around a systems thinking approach to membership. The lifecycle model has gone through some changes and adjustments over the years, but I still find it a very practical and helpful tool to use to diagnose and fix problems that organizations are experiencing with their membership.

So on the fifth anniversary; I thought that I would share a brief review of the concept. The Membership Lifecycle segments the membership experience into five consecutive stages:

1. Awareness -- when prospects first discover you. No one joins a membership organization unless they first know that you exist and have value that will help them. You also will have difficulty recruiting a new member if you cannot identify who top prospects are for membership. So the goal of the awareness stage of the lifecycle is what I call mutual awareness. On the one hand, just like any product, you need to establish share of mind with your prospective members. But in addition, you also want to gain what I call share of database. You want them to raise their hand and register on your website, accept a free whitepaper or newsletter, or attend a webinar or meeting. When they know who you are and you know who they are, you have the chance to cultivate a relationship.

 2. Recruitment -- when prospects choose to join you. Membership is what marketers call a “push” product as opposed to a “pull” product. A pull product is something that is bought not sold. If you are a coffee drinker, you do not need a promotion piece to convince you to drink your coffee every morning. You seek it out. But very few people wake up in the morning saying that they need to find a membership organization to join. As a push product, membership is sold not bought. Successful membership organizations put in place a very pro-active recruitment plan as part of the lifecycle. They test, track, and analyze special offers, messages, marketing channels, and timing to convince a prospect to give membership a try by making the decision to join.

3. Engagement -- when new members feel they belong with you. The most likely member not to renew is a member in their first year. The second most likely member not to continue membership is one who has no behavioral indicators of usage or involvement with the membership. So the goal for these new members and those not taking advantage of the value provided is to generate interaction. Any type of interactive engagement, whether it is a purchase, a visit to the website, a completed survey, or a phone call to the organization correlates positively with the ultimate renewal of a member. Membership engagement is a crucial lead-in to renewal.

 4. Renewal -- when lapsing members decide whether to keep you. The mind shift that is important when thinking about renewals is that you are undertaking a campaign and not managing an event. We are entering another political season. Politicians know that just sending one letter or one phone call is not a strategy that will maximize voter turnout. So they are very aggressive (some say too aggressive) in turning out the vote for themselves. In the same way, today the standard three part renewal series is no longer sufficient to maximize retention rates. A synchronized, multi-channel, high frequency, campaign is required to maximize renewal outcomes.

5. Reinstatement -- when former members agree to return to you. In life there will always be bumps in the road with any relationship. It is no different with the membership relationship. However, it almost always makes more sense to try and restore an existing relationship than starting a new one. The reinstatement portion of the lifecycle is where attempts are made to understand the problem and fix it. This sometimes involves market research. As the old proverb says, “Look where you tripped, not where you fell.” It also involves ongoing outreach to highlight new opportunities and new membership options. Successful membership organizations never give up on getting members to come back.

The Membership Lifecycle is a framework to diagnose and fix the challenges that face every membership program. In my consulting work, I usually find that two, three, or even four elements of the membership lifecycle are functioning well in a membership program. But I also find that one or two parts need to be addressed to establish a strong and resilient program. Take some time to look at your membership to see which of these parts of the lifecycle is a weak link and put some time and effort into making some changes. It will positively impact the entire membership program.

So Why Test in Membership Recruitment?

After my last post, you might say to me, “So what’s wrong with not doing market testing in my membership recruitment program?”

My answer is, "If you don't shoot, you can't score." 

Let me share an example from a recent test that we conducted with one of our clients. For this client, we conducted a price test by splitting prospective members receiving a membership solicitation in half. The control group received a direct mail package with the normal $230 annual membership offer. The test group received the exact same direct mail package, but the with a $31 discount taking the price down to $199.

The final test results were significant. The control group achieved a .35 percent response rate producing $805.00 for each thousand pieces that we mailed. The test group achieved a .67 percent response rate producing $1,333.30 for each thousand pieces that we mailed. The total revenue for the control group came to $24,150 while the total revenue for the test group came to $39,999. So the test group produced both more revenue and more members.

The question often comes up whether the discounted price members will renew at the same rate as those who paid the full price. My experience is that there will be a slightly lower renewal rate from those who took the discounted offer, but not nearly enough to offset the increase in the number of new members.

But whether you choose to discount or not, the more important point is that it pays to conduct statistically valid market tests. The 80 percent of associations that do not do testing in their membership marketing efforts are missing out on better returns.

Disturbing News on the Practice of Membership Marketing

Much of the data reported in the recently released 2012 Membership Marketing Benchmarking Report was very encouraging. Many organizations are seeing growth in membership and using great tools to recruit, engage, and retain members.

But answers to the question, “What types of analysis do you use to measure the effectiveness of your membership marketing campaigns?” raise lots of concerns for me.

The responses reveal an alarming lack of using even the basic marketing measurement tools available. As the chart below highlights, of the 667 organizations answering the question, less than half track response rates to their marketing efforts. Only 20 percent conduct split marketing tests. And a full 40 percent use no marketing measurements at all.

Why is this? In an age when we have computers on our desks and big investments in websites and databases, it seems fundamental practices that have existed for years in marketing are not being used.

To quote Claude C. Hopkins, who wrote way back in 1923, from his book, Scientific Advertising: “The time has come when advertising has in some hands reached the status of a science . . . . 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” (NTC Business Press).

An organization that does not track responses, conduct tests, understand the lifetime value of members, and understand the buying patterns of members in their database is sub-optimizing its effectiveness and the long-term growth potential.

Seven Levers to Increase Membership Recruitment

Where do you start if your supervisor or board tells you to increase the number of new members coming into your organization?

Usually it is best to look at a broad array of options first and then determine what fits your situation the best. Here are seven strategic levers or opportunities to explore in order to increase your new member recruitment efforts.

 1. Enhance the Value of Membership -- Finding a need and meeting it is the foundation of marketing. If you can provide an indispensible new product or service as part of your membership offering, you will increase the response to your current promotions.

 2. Deploy Market Penetration PricingPrice is one of the four P’s of marketing., so it is a legitimate and useful tool to explore. To grow the number of new members at a rapid rate, a sharp decrease in the price can be effective.

 3. Increase Volume (Quantity) of Recruitment Efforts – From my observation, many membership organizations under budget and do not reach deep enough into their markets for potential members. If you have strong returns from your recruitment efforts, you probably are not reaching your full market potential.

 4. Add New Marketing Channels – Many organizations get locked into one or two marketing channels like email or sales calls and forget about other options like direct mail, telemarketing, and online. When integrated a combination of channels can be particularly effective.

 5. Test New Lists, Offers, and Creative – Without regular testing of new lists, special offers, and new messages and graphics, a membership recruitment program is sub-optimized.

 6. Expand to Related or Ancillary Markets – Thinking creatively about what other market segments might be appropriate for your membership offer can help to jump start recruitment. This is known as a market expansion strategy.

7. Increase the Frequency of Touches to Top Prospects – For almost every organization, there is a core of prospective members who respond at a very high rate. Aggressive membership marketers reach out to these prospects much more frequently over the course of a year and see strong returns.

Each of these strategies has its strengths and weaknesses. For example, lowing prices or reaching new markets can potentially negatively impact renewal rates. However, if the overall membership is growing at a faster pace, then these changes may make good sense.

 If increasing new member recruitment is your goal, I encourage you to step back and look at these options. One of them or some combination of them is likely to be the solution that helps advance your membership.

Just Released: The 2012 Membership Marketing Benchmarking Report

It is my pleasure to announce the release of the 2012 Membership Marketing Benchmarking Report. With site registration, a free download of the report is available using this link. Please download your copy of the report now and let me know what you think.

Those of you who participated in the research will be mailed a final, printed copy of the full report.

This marks the fourth year that Marketing General Incorporated (MGI) has surveyed associations to better understand what is going on in the membership market and what is working best to recruit members, engage new members, renew existing members, and reinstate former members.

I think you will find the new data and the trend data from the past four years very useful.

The most important aspect of this report is that it goes beyond cataloging membership practices of responding associations; the Benchmarking Report also takes these practices and cross-tabulates them with the membership outcomes that associations are experiencing. The comparison of practices and better renewal rates or more members provides strong directional information to help you select the tactics and strategies that might fit into your marketing plans for the upcoming year.

I hope that you find the 2012 Report of help as you seek to maximize the membership results for your organization. Feel free to share your comments and thoughts about the research here on the Membership Marketing Blog.

Membership Retention and Renewal Findings

Findings from the 2012 Membership Marketing Benchmarking Report show a pretty consistent theme when it comes to membership renewals – renew members early and often.

 • The average renewal rate for individual membership organizations this past year was 78% and the average renewal rate for trade or organizational memberships was 85%.
• The average first year member renewal rate for individual membership organizations this past year was 67% and the average first year renewal rate for trade or organizational memberships was 75%.
• Associations that offer an “early-renewal discount” were more likely to see an increase in renewal rates over the past year (24% to 19%).
• Associations that start their renewal efforts five months or more BEFORE expiration were more likely to see an increase in renewal rates over the past year (25.7% to 19.8%).
• Associations that have between 7 and 15 contacts in their renewal series were more likely to see their renewal rates increase over the past year (40.9% to 29.1%).
• Associations with first year member renewal rates below 60% were more likely to have seen their membership decline over the past year (29.4% to 18.3%).
• Associations that continue renewal efforts from at least three months after a member’s expiration date and up to continuous efforts are more likely to maintain renewal rates above 80% (80.2% to 69.4%).

I am often asked, based on these findings, how this research should be applied. My answer comes as both a warning and an encouragement.

Anyone reviewing this benchmarking data should be aware that because an activity or practice has a statistical correlation with better renewals or growing membership, I am not claiming that any single behavior in and of itself causes this outcome. There are literally thousands of variables that impact membership results. So I am reporting correlations and not claiming causation from any one behavior or statistic or finding.

Nevertheless, if as a membership marketer you see that organizations with certain behaviors or practices tend to be doing better, you at least will want to explore the issue and see if there is something that can be applied to your organization.

For example, from the data above, if you only have three contacts in your renewal series, reading that other groups have success with additional notices or early renewal offerings, may help direct you to what new renewal initiatives might be worthy of testing.

There is an ancient proverb that I like to quote. It says, "Without counsel plans fail, but with many advisers they succeed”. I view our benchmarking research as an opportunity to get advice from nearly 700 other membership organizations and learn from their activities and results. But ultimately, every organization has a unique set of opportunities and challenges that it must individually respond to in order to be successful.

News on Social Media and Membership Marketing

As we continue compiling the data for the 2012 Membership Marketing Benchmarking Report for our upcoming release, I thought that I would share some trends that we are seeing related to social media. The data represents responses from nearly 700 unique associations.

The data suggests to me that there has been a nearly complete adoption by associations of the official use of at least some social media tools. Here are some interesting findings that I have noted.

• The top social media networks officially used for association membership are: Facebook 86%, Twitter 78%, LinkedIn (Public) 55%, YouTube 55%, and LinkedIn (Private) 29%.

• Associations have increased their official use of Twitter: 66% in 2010, 71% in 2011, and now 78% in 2012.

• Associations have increased their official use of YouTube: 35% in 2010, 45% in 2011, and now 53% in 2012.

• 11% of associations are now officially using Google+.

• Associations with more than 20,000 members are much more likely to use social media, 96% use Facebook, 90% use Twitter, and 70% use YouTube.

• 31% of associations with more than 20,000 members have a private social network.

• Only 2% of the 685 responding associations do not officially do any social networking, down from 8% in 2010 and 6% in 2011.

The question that we asked from which I drew most of this data was, “Which social media does your association officially use?” We are cross tabulating these responses against previous years’ data, the number of members, budget size, industry, and key membership statistics like new members, renewal rates, and overall membership growth.

Product and Service Engagement Drives Membership Retention and Growth

The connection between the products and services offered by an association and the impact of usage of these on membership is profound. Effectively, it is the fast track to membership success.

Intuitively, we all know that members using the associations services is good, but seeing the statistics to support it highlights the critical nature in the membership lifecycle of member engagement.

In our soon to be published 2012 Membership Marketing Benchmarking Report, we asked associations to tell us first whether they offered a specific program or service and then the proportion of their members that participated in it. For example, if an association had an annual conference or trade show, what proportion of the members attended? If a product or service was not offered by an organization then they were excluded from the analysis for that particular item. Overall, we had more than 650 unique associations respond to this question.

What we found is that usage had a very strong correlation with many key membership statistics. Organizations that reported a higher level of usage where more likely to say that they experienced better outcomes in their membership results.

Here are the products and services where a higher proportion of members who had the following actions correlated with better membership outcomes (the average level of member participation for groups that offer the product is in parenthesis after each item):

• Attend their annual meeting or trade show (23%)
• Attend at least one of their professional development meeting (22%)
• Attend at least one of their webinars (16%)
Volunteered with the organization (12%)
• Participate in their private social network (13%)
• Participate in their public social network (13%)
• Participate in their young professional program (8%)
Upgrade their membership to a higher level (12%)
• Purchase a book or directory (13%)
• Acquire or maintain a certification (22%)
Donate to the foundation or PAC (10%)

With each of these behaviors, a higher proportion of membership usage correlated with an:

• Increase in overall membership over the past year
• Increase in overall membership over the past five years
• Increase in new members over the past year
• Increase in renewal rates over the past year

Sometimes survey data highlights new insights and sometimes it confirms long held beliefs. In this case, most people would agree that it makes sense that valuable products and services offered by a membership organization will result in more members and higher levels of retention. Nevertheless, it is always good to validate long held beliefs. And by the way, there is a product or two offered by many associations where there was not a correlation between usage and membership growth, but you will have to read the final report to find out what product that is.

Do Chapters Strengthen or Weaken an Association’s Membership?

You would probably agree with the statement that local and state chapters of national associations can provide a valuable service to members. They make more face to face interactions available and bring a geographic focus to important issues.

However, when we look at membership statistics of organizations with and without chapters, a more complicated picture arises.

In our soon to be published 2012 Membership Marketing Benchmarking Report, 688 unique associations identified whether or not they had chapters or were actually a chapter of a larger organization. A total of 349 did not have chapters, 318 had chapters, and 21 served as a chapter for a larger organization.

With this response, we compared just the associations that have chapters with those who reported that they do not have chapters on a number of key, self reported, membership statistics. Here is what we found.

• Associations without chapters were more likely to report an increase in membership over the past year than those associations with chapters (52% to 44%).

• Associations without chapters were more likely to report membership increases over the past five years (52% to 45%).

• Associations without chapters were more likely to report increases in renewal rates over the past year (51% to 43%).

• Associations without chapters were more likely to report renewal rates over 80% (52% to 45%).

What does this data mean? I do not think that it means that having a chapter structure is either good or bad. But it does seem to indicate that organizations that have chapters may need to work harder on membership recruitment and retention than those organizations that do not have this structure.

What have your experiences been working on membership within a chapter structure? Do you have an explanation of why these statistics seem to show one structure seems to work better than another? Please share your thoughts.

Fast Facts from the 2012 Membership Marketing Benchmarking Report

We have started compiling the data for the 2012 Membership Marketing Benchmarking Report. The data represents responses from nearly 700 unique associations. Here are some random fast facts that I have picked up looking through the data:

 • 52% of responding associations said that their membership grew over the past year.
• The average overall renewal rate reported this year is 80.37%.
• 7% of associations offer an online only (paperless) membership option.
• 9.5% of associations offer an unemployed membership category.
• Less than 7% of associations use texting as part of their membership marketing efforts.
• 86% of associations officially use Facebook as part of their social media.
• The average number contacts in a renewal series (mail, email, phone, etc) is 6.26.
Overall, all the key indicators from the data that I have looked at so far point to a much stronger environment for membership organizations than any time since we began to compile data in 2009. There are a lot more findings to come, so stay tuned.

Helpful Membership Marketing and Management Resources

Today, I thought that I would share two web sites that I think you will find of help.

The first is a web site offered by Tom Peters. He has distilled down thousands of slides from over 2,500 presentations that he has done on organizational and personal excellence into 23 separate presentations that you can download. Peters say, “Use this material as you wish and please 'steal' all you want.”

I especially found his slides on Strategic Listening to be insightful.

The second web site is provided by an Australian membership marketer named Belinda Moore. Among a long list of resources, her site includes content on:

• Membership Statistics
• Models of Membership
• Lead Generation
• Prospect Relationship Management
• Membership Sales
• New Member Integration
• Member Relationship Management
• Renewals

I hope that you find the information on both sites useful.

Updated Membership Marketing Tracking Dashboard

A number of years ago, I shared about a dashboard that I created to help with keeping track of your organization’s membership numbers. I have just finished updating it based on some feedback that I have received from readers. If you would like an Excel version of it, please send me an email (under my bio at right) and I will forward it to you.

The dashboard includes calculations for tracking:

• Year over year total membership decline or growth
• Year over year new member recruitment
• Monthly and annual conversion (renewal) of first year members
• Monthly and annual subsequent year renewal of members
• Monthly and annual overall membership renewal calculations

I have found that these are the key statistics to monitor for most membership organizations. They highlight where things are going well and where you might need to focus additional attention.

ASAE Marketing, Membership & Communications Conference

There promises to be many great speakers and sessions at the upcoming ASAE Marketing, Membership and Communications Conference held May 23 and 24 in Washington, DC. It is a conference that I can highly recommend and it often sells out, so you may want to register early.

Rick Whelan, the president of Marketing General Incorporated, will be speaking at the conference on my favorite topic, “The Economics of Membership Marketing Programs”.

Rick is a 30-year marketing professional and a Certified Direct Marketer. He serves on the Direct Marketing Association of Washington, DC, Educational Foundation Board of Directors. He is a past DMAW Board Chair and former Chair of the American Society for Association Executives Membership Section.

But in addition to his credential, I believe that this topic is lays the foundation for all membership marketing activities. The economics of membership includes important toics like:

Steady State Analysis – Determining the future membership size of your organization.
• Membership Tenure – Projecting how long a member will remain with your organization.
• Retention Calculations – Measuring the continuity of your membership.
Life Time Value (LTV) – Understanding the long-term revenue stream a members will produce.
Maximum Acquisition Cost – Calculating the margin or potential profit that a member will produce for your organization and therefore how much can be spent to obtain a member.

If you plan to attend the conference, please let me know. I enjoy meeting and getting feedback from those who read this blog.

Fundraising with Social Media

In the March edition of Associations Now, Andrew Lang highlights a social media success story titled Tweeting for Dollars

He writes, “Most of us know or have heard of associations that use tools like Facebook or Twitter to promote conferences or other products and services, thereby increasing their sales. But reports of associations creating net income directly from these tools have largely proven illusory. Finally, I am pleased to report that I have found just such an association—and it turns out it has been succeeding at it for three years already.”

The program he highlights is run by Nonprofit Technology Network (NTEN) using Twitter, Facebook, and LinkedIn posts to request donations to fund scholarships for their annual conference. For each donation made, the responder got a vote on what video would be produced for the conference.

“The resulting campaigns have raised an average of approximately $10,000 each of the last three years.” Lang reports, and “because NTEN has a corporate sponsor that provides matching funds, the total raised comes to $20,000 a year. While this is only a small percentage of the organization's overall budget, it is nevertheless a useful sum for the purpose intended.”

Social media is still in its infancy compared to other more mature marketing channels, but over time we will see innovative approaches that will help it become part of a predictable and projectable marketing tool. Keep watching.

Three Membership Renewal Tips you can Use

When you are hunting for a way to improve results, testing is a great way to optimize your marketing efforts. And this is particularly the case with membership renewals. 

As I have reviewed testing data from several membership organizations, I have spotted some outcomes that you may want to consider if you are looking for better renewal rates.

1. Test Where the Notice is Sent: If you have not had a response from your pre-expire renewal efforts, consider sending renewal notices to both the bill-to and ship-to address in your database. If you normally send renewals to the bill-to address, you may find that the notice needs the push or approval of the ship-to user to get through the system. If you normally send the notice to the ship-to address, you may find there is a new staff person in the organization that the bill paying department can identify. Either way, with one organization we have seen a 20 percent lift in post expire response rates for the notice going to both addresses.

2. Track Renewals by Member Segments: We often look at the aggregate renewal rate for our organizations and think all is well when we see a number of 80 or 90 percent. But a renewals rate is the cumulative effect of many separate renewals from each segment of a membership. By tracking these segments independently, you can determine where an intervention or improvement might be needed. For example, when tracking renewal rates by each state, we see variations in renewals by up to 50 points (90 percent for the top state compared to 40 percent for the bottom state). Membership category renewal rates can vary by 40 points. And continuing members compared to first year members can vary by 30 points or more. Tracking these variations shows where additional resources and efforts may be needed.

3. Evaluate the Timing of Renewals: When you start and when you end your renewal efforts will also impact your final numbers. If you offer an automatic credit card renewal or electronic funds transfer option, these options can be presented before your renewal series begins. Groups that offer these payment options find that they may have a 10 point increase (85 percent renewal rate compared to a 75 percent renewal rate) from members who participate in these programs compared to non-participating members. Early renewals that come in the form of a “Thank You” instead of a request for payment have produced increased renewals. And our 2011 Benchmarking Report highlighted that over 50 percent of responding membership organizations continue renewals for four or more months past expiration. In fact, “associations with an increase in membership over the past five years are significantly more likely than associations with a five-year decline in membership to report that they do not stop contact for renewals (25% to 16%).”

Because renewals generate a high overall response rate, testing can produce very solid statistical outcomes and those outcomes can have a big impact on your organization.

Please share in the comments section below any tips that you have that might help organizations improve renewal efforts.

Participation Grows for the 2012 Membership Marketing Benchmarking Report

We have closed the questionnaire for the 2012 Membership Marketing Benchmarking Report and I am happy to report that we had the highest level of participation ever.

Last year over 650 membership organizations took part in this research. And this year we had over 750 organizations submit their data. The increased level of participation this year will allow for even finer segmentation by organization type, size, and budget.

Thank you so much for each of you who took part in this research. For those who completed the survey, we will send a free printed copy of the final, full report.

I also look forward to sharing with you the outcomes from this year’s research here on this blog. If you have not done so, you may want to use the “Subscribe through Email” button on the top right of the blog home page to stay in contact for releases of information.

Your Membership Value Equation

Value = Benefits / Costs = (Functional benefits + Emotional benefits) / (Monetary costs + Time costs + Energy costs + Psychic costs)1.

1. Philip Kotler, Marketing Management, Prentice Hall; 11 edition (May 2002)

A “Good” Response Rate in Membership Marketing

Many times I am asked what a good response rate in direct mail is. So I found it interesting when a client shared some data from the DMA Response Rate Trend Report. The report found that “Response rates for Direct Mail have held steady over the past four years. Letter-sized envelopes, for instance, had a response rate this year of 3.42 percent for a house list and 1.38 percent for a prospect list.”

Benchmarking data from other organizations is a good starting point for any analysis. However, real data collected from actual market tests is always the best. That’s because response rates are a comparative measuring tool, not an actual definition of value.

For example, is 72 degrees Fahrenheit a good temperature? It is great if you want to go for a walk, but bad if you are cooking a steak.

Before you determine if a response rate is good or bad, you need to understand the costs and the revenue associated with your membership (what cooking temperature is required). Then you can employ the response rate to define which list, offer, or package meets you minimum response requirements.

In the example below, the response rate varied on 16 different lists from 3.46% to 0.33%. If the revenue associated with the response is very high, then even the lowest responding list might be economically productive. But if the allowable marketing cost is $30, then responses below a 1.79% response rate on list “D” would be unacceptable.

What’s the bottom line on response rates? Do the economic analysis first to understand the costs and revenue associated with your marketing effort. This will tell you what the minimum response rate you need to achieve your outcomes. Then use your response rate as a decision tool to define what is good and what is bad from your marketing efforts.