Winning in Membership Marketing Even if you are Wrong 99.5% of the Time

Here is something that I have been observing in membership organizations of late.  Many organizations too quickly assume rejection.

When I ask why they do not reach out to this or that group of non-members, I might hear statements like, “we asked those people to join when they attended our meeting and they did take our membership offer.”  Or “they didn’t renew their membership awhile back, so we do not contact them anymore.” 

Essentially some organizations have imposed restraints on themselves that might not be supported by marketing data.

The fact is that even if 99.5% of the time you are correct and indeed a prospect will not join your organization, most organizations can still be remarkably successful with a .5% acceptance rate.

The psychological challenge – and the reason we may impose restraints on ourselves -- is that there are very few life situations where a 99.5% failure rate can actually be good.  It does not work in school, engineering, sports, or even Vegas.

Here is some quick math to support how we can be wrong a lot and still be successful. 

Let’s say you have 5,000 prospects that may have declined membership even after a couple of sales attempts.  Most likely you could reach out to them with a direct mail solicitation and a couple of follow-up emails for $1.00 to each person or $5,000 in marketing cost.  If the dues amount for these members is $200 and half a percent of them decide to join, you have generated $5,000 in new dues revenue.  And if your organization maintains an industry average renewal rate of 80%, you will realize $1,000 in lifetime dues revenue from each of these new members (or $25,000 total lifetime dues revenue) plus any non-dues purchases that they might make. 
Yes, there will be costs to service these members over their lifetime with your organization, but your overhead and fixed costs will exist whether or not you added these new members.  On an incremental basis, the cost to provide services to these new members should be minimal.

However, these numbers reflect a minimalist view.  Clearly, you always want to do everything possible to achieve the highest success rate you can.

So here is another scenario.  Conceivably, you could be wrong only 99% of the time as to whether or not a prospective member will decide to join your organization.  In this more optimistic case with a 1% success rate, your first year revenue from reaching out to these prospects would jump to $10,000 against a $5,000 marketing cost and your lifetime dues revenue would be $2,000 for each new member and $50,000 in total lifetime dues revenue.

What might we learn from this example?  When we hear from prospective members that they are not interested in joining, it is easy to project that feedback over a larger population.  However, our perceptions can easily trick us.  Instead of drawing premature conclusions, be sure to do the math and remember that even if 199 out of 200 prospective members say, “No” to membership, we may only need one out of the 200 on average to say, “Yes” to maintain a successful program.  Do not give up too soon on reaching out to prospective members.

Leveraging Non-Member Email Addresses for Membership Recruitment

Many membership organizations have accumulated email addresses in their database of prospective members through site registrations, event attendance, or product purchases. 

Here are some strategies that you may want to consider in order to maximize these records to strengthen your overall membership marketing efforts.

1.     Improve Targeting – Email is one of the least expensive marketing tools, but also has lower response rates than other more expensive channels like telemarketing, direct mail, or face to face sales.  However, email can allow you to cast a broad net across industry segments, recency of contact, and source of records and through open rates and click through rates see where the hot spots of interest appear.  The emailed segments that demonstrate interest in membership with high click through rates or new joins will probably warrant the use of more expensive marketing channels.  The non-responding segments will be unlikely to be cost effective targets for more expensive promotions.    

2.     Gain Contact Information – Some organizations have only a name and email address in their database.  Without a mailing address available for a thorough merge-purge, there may not be clarity whether the individual is a current member or not.  Sending the individual an email that offers free content with the requirement of providing full contact information is a great way to update information and re-engage a prospect in the membership conversation. 

3.     Verify Data – Another concern of many organizations is the accuracy of mailing addresses for non-member records in their database.  People change jobs and move to new companies.  Once again, email is an effective tool to verify that a prospective member is still at the same company.  If the work email is not deliverable then it is unlikely that the mailing address is still correct.  Other data hygiene solutions should also be used like running mailing addresses through the National Change of Address (NCOA) registry.

4.     Deploy Flash Offers – Although email may not produce as high of a return as other marketing channels, it does lend itself to deadlines and instant response.  That makes email a great channel for short-term specials called “flash offers”.  These are exceptional deals made available for only 24 to 48 hours that are designed to encourage an impulse buy.  Like it or not, sales do motivate purchases and email lends itself to immediate decisions.

Effective marketing is all about connecting the tools and channels available to you with the appropriate target markets, messages, and offers.  Email is one tool that not only can be used to sell, but also allows you to read the digital fingerprints of those who receive it to leverage your overall membership marketing program.