The Evolution of Association Membership Models


In the coming months, I am presenting two sessions on the transitions and opportunities that are taking place in the packaging of association memberships, otherwise known as membership models.
What an increasing number of organizations are doing is re-packaging their traditional membership offering to appeal to new market segments and to adjust to new business realities. They are encouraging the market to drive their membership product instead of their bylaws.
There is one change in particular to highlight.  An increasing number of individually based associations appear to be offering both individual and institutional membership instead of the traditional clear delineation between an individual membership and company or institutionally based structure.
In fact, since starting our Membership Marketing Benchmarking research, the proportion of associations reporting that they offer a combination or “hybrid” membership has gone from 17% to 28%.  And as the chart below shows, this has been accompanied by a drop in associations’ reporting that they only provide individual membership from 54% to 44%.
 
When one looks at the outcomes of adopting this hybrid membership model, one can also see the wisdom of considering of these changes.  In my consulting experience, it is not unusual to see organizations that offer both individual and institutional membership options achieving five to ten points’ better renewal rates with their institutional membership offering compared to their individual membership.  Additionally, our 2014 Membership Marketing Benchmarking Report highlights the mean renewal rate for individual membership associations is 76% and the mean for combination associations is 80%.  Both, however, fall short of the mean renewal rate for trade or institutionally based associations of 85%.
Perhaps the reason for these better renewal rates is an institutional membership will typically be paid from a company budget, not out of an individual’s wallet.  Also, an institutional membership obviously supplies benefits to multiple people adding to the potential endorsers of continuing the membership relationship.
Finally, offering a combination of membership may help with recruiting new members.  Our research shows that combination associations were more likely than both trade and individual membership organizations to report an increase in new members over the past year.
One of the 4 P's of marketing is "product", so adjusting the membership product to meet the changing market conditions is an important strategy for associations.  One of these adjustments to the membership model that seems to have been beneficial, in particular for individually based associations, is offering the option for the members’ companies or institutions to join and hold the membership as an organization.

3 comments:

Joe Rominiecki said...

Thanks for sharing this data, Tony. Very interesting. I feel like I've been seeing this more, too, but now I know it wasn't just coincidence. I think my one big question is "Why now?" Associations have always had the option of offering individual or company membership, so what's making company memberships an increasingly attractive business model now? The timeframe you show dates back to the midst of the recession, but I'm not sure I see a direct link there. Curious for your thoughts.

Tony Rossell said...

Hi Joe -- Thank you for the comment and for the question. Data is great for answering the question, "what" is happening and not as good at answering the questions "why" it is happening. But let me take a guess at why. Traditionally an association's membership categories have been locked in by bylaws. I think that with the economic challenges that many organizations are facing, those things previously written in stone have come up for discussion -- like membership models. I often share with my clients and colleagues that the benefit of challenges and even failure is that it opens the door to trying new things and many times the new things and inventions prove very successful. Any that is my theory. Tony

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