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.