Everything You Always Wanted to Know about Membership Marketing but Were Afraid to Ask

Best practices, technology, and regulations are changing at such a rapid pace that it makes keeping up a real challenge.  So here is a webinar where you can voice the questions that are impacting your membership like:
·       How is digital marketing being used to get and keep members?
·       How do you overcome email fatigue?
·       What is the appropriate budget to spend on membership recruitment?
·       How are associations handling CASL and EU Data Protection GDPR)?
·       Why do members lapse and what can be done to keep them?
·       What data analytics tools can be used in membership marketing?

The webinar is on Tuesday, October 17, 2017, at 1:00 p.m. ET.   MGI’s Senior Account Directors Harold Maurer and Elisa Joseph Anders will answer the most pressing questions submitted in advance by webinar participants. Registration is now open using this link.
Take some time out of your busy schedule to participate. 

2017 Membership Marketing Benchmarking Report

The 2017 Membership Marketing Benchmarking Report is now available as a downloadable PDF. Here are some of the highlights of this year’s research.
Once again, many more associations are reporting an increase in their membership compared to those siting a membership decline.  Individual membership organizations (IMO’s) led the way with 48% sharing that membership had an increase over the past year.
In fact, many associations report substantial growth rates.  Of those organizations that showed increases in overall membership, one-quarter report increases of 6% to 10%, while 19% report increases in membership over the past year of more than 10%.

Similarly, associations are maintaining membership growth over the longer term.  Again this year, 50% of associations report that their membership over the past five years has increased.  And if we look back over the historical trend from our very first benchmarking report, associations have consistently reported an ongoing five year trend of increasing membership counts.

These outcomes challenge the narrative put forth by some that membership as a product and professional and trade associations as a category are in decline.

In addition the increases reported in total membership counts, the 2017 Membership Marketing Benchmarking Report also highlights continuing strong data on other key membership statistics.

Similar to 2016, 68% of associations’ report renewal rates of 80% or higher. The median membership renewal rate is 84% overall. Trade associations have a higher median renewal rate (89%) compared to IMOs (80%) and combination associations (82%).

Renewal rates from our benchmarking research have remained remarkably stable of the years meaning the engine for membership growth continues to be new member acquisition. This does not in any way say that maintaining a high renewal rate is not important, but it does show that growth depends on continued new member acquisition.

And strong membership acquisition results have continued for associations.  Over the past year, 45% of associations report increases in their new member acquisitions, with IMOs showing the most growth (47% vs. 45% for trade associations and 43% for combination associations).

However, all of this positive data does not mean that associations are not facing significant challenges.

Respondents reported some major external challenges to their association.  For IMOs the cost of membership and competing associations are the top two challenges.  And Combination associations are most likely to struggle with declining member/employer budgets (32%).

For trade organizations, the biggest external challenge is industry consolidation/shrinkage (36%).  One participant shared in the comments section of the research, “Our market is shrinking and certain leaders are averse to opening up our member categories to expand opportunities.”

Internal challenges were also identified in our research.  IMOs are significantly more likely to be challenged in attracting and maintaining younger members (26%), while trade organizations struggle more with proving that their membership provides a tangible ROI (32%). And Combination associations find it more difficult to meet the needs of a diverse membership (27%).

But the good news is that the analysis of this year’s data also highlights signs of vibrancy that is helping to drive membership growth.

For example, it appears that associations – especially those that are experiencing membership growth – are more effectively reaching out to upcoming generations of members.

In fact, associations estimate that about 21% of members are Millennials or Gen Z.  And associations reporting an increase in membership over the past year, the past five years, and an increase in overall renewals are significantly more likely to have a higher percentage of Millennials.

New technology is also helping associations market more broadly and effectively.  Specifically, there has been a rapid adoption of online digital marketing including Facebook paid advertising, search engine ads (pay-per-click), lead generation content marketing (White Papers), and paid banners on other websites.

Many participants highlighted the use of these tools in the comments section of our research noting, for example, “Facebook remarketing has been successful, especially when specifically targeted to a specific audience such as our Young Professionals.”

Finally, another driver building more vibrant memberships has been engaging members with new products and services that deliver what members want when they want it.

In the case of IMO’s for example, when looking at the products and services that are reported as showing stable or decreasing engagement, one finds many of the traditional and long-term association offerings like volunteerism, the purchase or maintenance of insurance, or book or directory purchases.

However, when looking at what is reported as showing increasing engagement and participation, we find activities like participation in the public social network of the association, participation in the private social network, attendance at webinars, or participation in a young professional programs as the fastest growing engagement tools.

In other words, increasing engagement has been driven by change and innovation and not relying on the services of the past.

For 2017, the Membership Marketing Benchmarking Report continues to highlight growth and resilience for membership associations.  But maintaining growth is challenging, taxing, and requires hard work and constant innovation. 
You can review the entire report here.  We hope that you find this year’s report helpful, challenging, and encouraging as you serve the members of your association.

Webinar Posted: 2017 Membership Marketing Benchmarking Report

The headline for the soon to be released 2017 Membership Marketing Benchmarking Report is that for the ninth consecutive year, many more associations are reporting an increase in their membership compared to those noting a membership decline.
Our webinar sharing some of the top findings in the forthcoming report is now available with this link.
Membership Marketing Benchmarking Report Webinar
The session looks at principal findings from the research, the membership challenges reported by associations, and the drivers of resiliency and growth shared by participating associations. 

Highlights from the 2017 Membership Marketing Benchmarking Report

The full 2017 Membership Marketing Benchmarking Report will be released next month, but here are some of the highlights of this year's report.

Using Data Analytics to Drive Effective Marketing Strategy

One of the most rapidly adopted tools in association marketing today is data analytics.  It provides the knowledge to segment members and customers, target offers and messages, and maximize efficiency.
Here are some methods that are making a big difference for associations right now.
  1. Recruitment Modeling – Many factors serve as either positive or negative predictors of whether or not a member will join an association including previous buying behavior (frequency and recency), non-monetary interactions, list source, number of previous recruitment contacts, and company or personal demographics.  By analyzing and scoring how each of these factors impacts someone’s likelihood of joining and rolling up the scores, a prospective membership file can be arrayed from the most likely to the least likely person to join and then broken down into segments or deciles. Not surprisingly the top deciles may perform at double the return of the overall file producing outstanding results.
  2. Membership Retention Key Performance Indicators (KPI) – Every interaction that a current member has with the association is a predictor of whether or not they will renew.  Data analytics can help to define which behaviors or interactions a member takes are most likely to result in them continuing with the association.  Knowing this can drive an engagement strategy and move members to these behaviors.  Interestingly, conference attendance is often a negative predictor of renewal.
  3. Member and Customer Ranking - It is not at all unusual to have 20 percent of customers or members produce 80 percent of sales.  Identifying who these customers are is a great use of data analytics.  The method to identify the very best performing customers involves building an algorithm around three coordinates: Recency, Frequency, and Monetary Amount (RFM).  This method highlights a customer who recently made several purchases as a better prospect over one who made a very large purchase several years ago.  Focusing time, resources, and attention on the best members and customers will pay off.
  4. Missionary Products and Member Migration - Whether it is understood or not, most associations have one product line that is typically the very first financial transaction between the association and an individual or company.  Data analytics can define this product or service and knowing this allows an association to focus marketing resources on that “missionary” or introductory product and service.  In addition to identifying the introductory product – whether it is conference registration, membership, or certification – further analysis can track secondary and tertiary purchases to help understand the product migration path for the association.  All of this enables a marketing team to help an individual successfully navigate the opportunities presented by an association and reduce marketing static and conflicting messages.
There are obviously far more opportunities than listed here to analyze data in order to maximize marketing effectiveness.  In fact, the only limits are having the data available and defining the knowledge that you want to gain from the data.
And even if all of the needed data is not on hand, demographic and firmographic data appends are available with a wealth of information to enhance any database.  Then for success in data analytics it is important to define what specific questions that you want the analysis to answer before you start the analytics process. 

Everyone is Discovering the Power of Membership

The theme of the recently released book, Marketing 4.0, proposes that “The role of marketers is to guide customers throughout their journey from awareness and ultimately to advocacy.”
Most membership organizations have operated with this philosophy for years.  I have defined this ongoing relationship as the Membership Lifecycle.
But the news is that today the understanding of membership as one of the most powerful relationship builders between any organization and its audience is becoming foundational in minds of most marketers.
For example, the for-profit world is rapidly adopting the membership model.  In her book, The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue, Robbie Baxter spoke to this opportunity.  She wrote, “Membership strengthens loyalty.  Membership strengthens participation.  Membership strengthens referrals.  And organizations that think about membership tend to focus more on providing long-term value, which ultimately leads to better customer lifetime value.  Any CEO who is not thinking about membership is missing a huge opportunity to point his or her organization toward long-term sustainable profitability.”
The economic benefits or establishing long-term, continuity relationships with customer (or members), was also recently documented in a study published in Forbes Magazine titled, “New Subscription Economy Index Shows Subscription Businesses Growing 9X Faster Than S&P 500 Ones.”  The authors study compared the growth rates of companies using a sales platform of recurring subscription revenue (think Netflix) to companies in the S&P 500 and US retail sales.  “The result: Since the start of 2012, the sales of subscription economy businesses are growing nine times faster than sales of companies in the S&P 500 and more than four times the rate of U.S. retail sales.”
What’s more associations themselves are reporting significant strength in membership.  In the soon to be published 2017 Membership Marketing Benchmarking Report, of the 1,056 responding associations, 46 percent reported that their membership has increased over the past year, while only 25 percent reported a decrease in membership counts.  And respondents also reported a median renewal rate of 84 percent meaning associations were benefiting from the revenue of a membership relationship on average for over 6 years.
What can we take away from what we see happening in the marketplace?  For associations the key is to invest and continue to focus on recruiting and retaining members. The tools, methods, and competitive environment of getting and keeping members are changing, but the power and opportunity of this core relationship will continue.

Small is Beautiful or Too Big to Grow?

As we analyze the data from our 2017 Membership Marketing Benchmarking research, we see many interesting data points that we will share when we officially release the report.
Here is one interesting point; it looks like the larger an association is in either total members or operating revenue the less likely it is to see the rate of membership growth increase.
Overall, 46% of participating associations reported that their membership has increased over the past year.   However, when we look at these associations that increased membership split out by operating revenue, we see varying levels of median growth rates.
  • Up to $1Million: 8.35%
  • $1 Million to $4.9 Million: 4.72%
  • $5 Million to $19.9 Million: 3.91%
  • $20 Million or More: 2.82%
This trend seems to hold true when we look at these associations split out by their total number of members.  For individual membership associations, here is how growth rates break out.
  • Up to 1,000 Members: 7.95%
  • 1,000 to 5,000 Members: 6.32%
  • 5,001 to 19,999 Members: 3.95%
  • 20,000 or More: 2.71%
Economists debate whether or not “small is beautiful” when it comes to companies, cities, and countries.  So size is not necessarily a predictor of fast or slow growth.

What is interesting are the reasons noted by both larger and smaller associations as their challenges to growth.  In the research, associations with the lowest operating budgets site insufficient staff as the chief challenge that they face in growing their membership.  On the other hand, associations with the highest operating budgets site the difficulty in communicating value as the major challenge for them in growing membership.

Lower budgeted groups may be resource challenged, but larger groups are challenged in focusing their superior staff and resources to present a clear value proposition. 

Just Released: Community Benchmarking Study

For the past three years, Marketing General Incorporated and Higher Logic have produced the Community Benchmarking Study. The latest edition is now available as a download.
Here is your link to get a copy of the study.
Clearly, for many people, connecting is moving from face to face to online interactions whether it be with Facebook or some other platform.  And association members are no exception to this trend.
So the Community Benchmarking Study highlights important insights on the impact that an online community can have on overall membership growth and member engagement. The Study examines the ratios of members who are discussion creators, contributors, passive (viewers), and inactive.  It also includes a case study using real data from ASAE, with their permission, on the reach and engagement scores for their association.
The Community Benchmarking Study is a great resource for associations to use to measure and improve their member engagement and networking in the online world. 

Determining Your Association’s Missionary Product

The most expensive task in marketing is new customer, member, or donor acquisition.  But many associations are trying to fight the marketing wars on multiple fronts because they have not identified their introductory or missionary product.  Instead they reach out to the marketplace with many products like membership, certification, conference, or publications.
An association that defines the product with the best level of response and return on investment and focuses its marketing resources on it to bring prospects into relationship with the association will achieve the most success.  The strategy is then to upgrade or cross-sell additional products and services to buyers of the introductory product.  However, when acquisition marketing efforts are spread over many products lines the marketing impact is diluted and the costs increase.
For associations, the most successful missionary product is membership.  This makes sense when you think about it.  As a member, a prospect is signing on to stay in touch with you for the next twelve months allowing for regular upgrade and cross-selling opportunities for secondary products and services.  Additionally, the average member stays with an association for five years, so there is a long-term income stream tied to a new member that supports the initial marketing investment.
On the other hand, a book buyer may only be interested in a specific topic and perhaps make their next purchase through an online bookstore.  And a conference registrant or certification candidate has to make a much bigger financial and time investment compared to the price of purchasing a membership.
But whatever product or service an association chooses to use for new customer acquisition, it makes sense to support it with adequate budgets and push.  Growth comes through focused efforts targeted at a specific market segment.