The Marketing, Membership & Communications Conference (MMCC)

There are some excellent sessions on the schedule for the upcoming ASAE Marketing, Membership & Communications Conference on June 17 and 18 in Washington DC. 
I will be a co-presenting one session that I think many membership professionals will find of help.  It is titled, “Membership Model Makeover.”   I will be presenting along with four other knowledgeable professionals:
  • Bryan Kelly, Director, Marketing, Aptify  
  • Ford Bell, Executive Director, American Alliance of Museums
  • Jeff De Cagna, Chief Strategist and Founder, Principled Innovation LLC  
  • Richard GrefĂ©, Executive Director, AIGA  
With all of the economic, social, and technological changes over the last number of years, associations have an opportunity to reinvent themselves for the 21st century. In our session, we will share examples from association executives and consultants who have been part drastic membership model changes.  These makeovers examples demonstrate how organizations can change decades of tradition to make real differences in their membership.
If you are a reader of this blog and can attend the conference, please stop by and say hello.

Five Steps to Building a Membership Loyalty Program

For decades loyalty programs have been growing in the for profit world as a major component for engaging and retaining customers. 

Those old of us to remember will recall collecting S and H Green Stamps which were one of the very first retail loyalty programs.  Merchants gave out the stamps to customers as incentives to shop at their store.  Once enough stamps were collected, they could be redeemed for desirable products from a catalog. 

Today, a huge percentage of companies have incorporated loyalty programs as a core component in their marketing efforts including airlines offering free tickets, hotels offering free stays, and grocery stores offering discounted gasoline.  Even my local sandwich shop and barber have loyalty programs. 

The goal obviously of a loyalty program is to keep and reward your very best customers and members. 

However, it is rare that I come across an association that has overlaid a loyalty program onto its membership.  Many organizations do not recognize the diversity in their members and treat their best members in very much the same way as everyone else without regard to the value they bring to the organization.  In a diverse membership, a loyalty program helps define who these most valuable members are and encourages behaviors that lead to greater value from those less engaged. 

In order to build a Loyalty Program, here are five recommended steps to follow. 

1.     Determine what behaviors lead members to loyalty and retention by defining “Key Performance Indicators” (KPI).  Basically to start a loyalty program, you first want to evaluate what behavioral variables correlate with (or are predictive of) longevity and purchases by a member (maximum ROI).
2.     Select a method to calculate loyalty. Once the KPI’s that indicate loyalty are identified, a model can be built using an algorithm to calculate the mix of actions that an organization wants to reward and a POINT system devised to encourage the behavior leading to loyalty and retention.
3.     Find the types of rewards that are motivational.  Building the rewards for loyalty will also be important.  Rewards could be in the form of one or more categories:

a.     Member Recognition
b.     Personal Benefits
c.     Professional Benefits 

4.     Capturing and reporting on Reward Points.  The behaviors that are to be rewarded need to be captured and translated into points.  To encourage these activities, point values can be sent to members and available on a rewards website.
5.     Building a communication strategy.  An incentive for encouraging the behavior that an organization desires is only as good as the ability to make members aware of the program and communicate to them the benefits that they can receive.  Once the system is built, consistent promotion of the loyalty program in membership and product marketing materials really helps to encourage participation.

We all know that there are very profitable members and members who contribute far less economically to an organization.  A loyalty program helps incentivize the profitable members to do more and helps lift the less profitable members to higher levels of usage and engagement. 

However, even if deploying a full loyalty program seems like too large of an endeavor, most organizations would benefit by implementing at least the first two steps outlined above.  Defining what behaviors lead to your most profitable members can drive focus and efficiency in your organization.   

Using Membership Marketing Partners to Help with Your Membership Challenges

One of the questions that I find most interesting in our Membership Marketing Benchmarking research is, “What are your organization’s top challenges in growing membership?”
The answers fall into two broad categories.  The first are environmental challenges outside the organization.  These are situations like the economy, competing organizations, market perceptions, and industry consolidation.  The second are institutional challenges inside the organization.  These are challenges like the ability to communicate value, insufficient staff, identifying prospects, lack of marketing expertise, and the lack of a plan or strategy.
The outside challenges often need long-term strategic changes in the organization and can be more difficult to address.  However, the inside challenges many times can be addressed by adding outside partners with specialized expertise for a period of time.
For example, an experienced research firm can help an organization better understand its value proposition and select the marketing messages that best communicate it to members and prospects.  And when peak work times are present, staff can be supplemented through marketing temporary firms or contractors.
When identifying prospective members is the challenge, a list broker can help.  List brokers have numerous tools and contacts available to help find prospects for your marketing efforts and since they receive a commission from the owners of the prospect lists they find for you, their services are effectively free to you as the list buyer.
Finally, there are a number of marketing firms that specialize in membership marketing including my company, Marketing General Incorporated, which often will provide a free consultation to help you define your needs and possible solutions.
If your organization’s membership growth is being held back by issues that can be addressed and solved by adding expertise from partners in the membership marketing community, why not reach out and ask for assistance? 

What can be Done to Increase Renewal Rates?

Only 30% of associations participating in the 2014 Membership Marketing Benchmarking Report said that they have increased renewal rates over the past year. And 27% of associations report that their renewal rates had declined.  Individual associations in particular saw average rates drop from 79% to 76%.

So with this discouraging news, what should associations do?  How can an association move from flat or declining renewals to better renewals? 

One solution is to learn from the behaviors of what the associations are doing that have seen an increase in retention.  And the great news about data is that we can look at the reported activities of respondents to the research to see correlations with groups that are seeing increased renewals.  These correlations do not necessarily mean that any single activity will automatically change outcomes.  However, when you see certain actions correspond with better renewals for some associations, it makes sense to investigate how these options might be used in your association and develop and test the solution and then implement what works.
From our research, here are four categories of actions an association might take that correlate with increasing renewal rates.

1.      Increased Member Usage – In many cases, when there was an increase reported in the attendance or purchasing of an association’s products and services there was also an increase in renewal rates over the baseline of 30%.  For example, 41% of the associations that reported an increase in attendance at professional development meetings saw an increase in renewal rates.   Similarly, 43% who reported an increase in book and directory purchases saw and increase in renewals and 37% who reported an increase in annual conference attendance saw an increase in renewals.

2.      Increased Membership Marketing Budgets – In most cases, when there was an increase reported in membership marketing budgets, there was also an increase in renewal rates over the 30% baseline.  For example, 50% of the associations that reported an increase in spending on renewals saw an increase in renewal rates.  Similarly, 44% who reported an increase in recruitment spending and 39% who reported an increase in on-boarding and engagement spending saw an increase in renewals.

3.      Increase Payment Options – Providing additional ways for members to pay also can help increase renewals.  For example, 44% of associations offering multi-year renewal options saw an increase in renewal rates along with 43% of associations offering and early bird renewal discount, and 41% of associations offering an automatic credit card renewal option.  Again, these are against a 30% baseline of associations reporting an increase in renewal rates. 

4.      Increase Renewal Activity – The tactical steps an organization takes to try to increase renewal rates also has an impact on the outcomes.  For example, 71% of associations that extend a grace period two months or more to allow members to renew have renewal rates over 80% compared to 50% of associations that limit the grace period.  Also, 69% of associations that include phone contacts as part of their renewal efforts have renewal rates over 80% compared to 44% of associations who do not use phone efforts.  And 66% of associations that use direct mail as part of their renewal efforts have renewal rates over 80% compared to 45% of associations who do not use direct mail. 
These findings are just a highlight from the results of our benchmarking research.  A full, printed report is scheduled to be distributed to survey participants in June. 

Association Membership Growth Surges

The theme for the 2014 Membership Marketing Benchmarking Report is the continued positive growth in association total membership numbers.
A total of 894 associations participated in the research this year and altogether 53% of them reported growth in their overall membership numbers.  While 15% said that their membership stayed the same, 28% saw a decline, and 4% were unsure if their membership grew or declined.  A full 24% of associations saw total membership growth of 6% or higher.  While only 8% of associations saw total membership declines of 6% or more.

Interestingly, the growth again this year did not come from increased renewal rates, but from higher levels of new member recruitment.  Overall, 59% of all respondents said that their new member input had grown.  But of those associations showing an increase in total membership, 70% said that their new member input had increased.  While only 17% of those associations showing a decrease in total membership said that their new member input had increased. 
The same was not true with renewals.  Only 30% of all respondents reported an increase their renewal rate this year (down from 35% last year).  In fact, the mean renewal rate reported this year fell from 79% to 76% for individual membership associations and from 87% to 85% for trade associations.  It did increase from 76% to 80% for hybrid associations (those that offer both individual and organizational membership).
Still maintaining strong renewal rates obviously assists with growth.  Of those associations that report an increase in overall membership, 56% of them had renewal rates of 80% or better.  Conversely, of those associations that reported a decline in overall membership only 26% had renewal rates of 80% or better.
This is the sixth consecutive year that this membership marketing benchmarking research has been conducted.  A full, printed report is scheduled to be distributed to survey participants in June.