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.