Growth through New Membership Models

This article is an edited excerpt from the book Membership Recruitment: How to Grow Recurring Revenue, Reach New Markets, and Advance Your Mission. Find it on Amazon.

Many associations hamper membership growth because they are operating with an antiquated membership model. Research shows that the majority of associations either have a single dues level that everyone pays, or very limited options (i.e., student membership or dues based on attributes like company size). It brings to mind Henry Ford’s approach to standardizing his Model T for efficiency purposes by famously stating, “You can have any car color you want as long as it is black.” The result was that Ford unwittingly provided an opportunity for General Motors to gain market share by offering customers a choice of car colors. Many associations find themselves in this same situation by essentially offering a “black Model T Ford” membership with no options on prices or the packages of benefits.

As an alternative to those following a one-size-fits-all membership approach, associations that have updated their membership models by allowing prospects to select the option that best meets their needs and budgets have tapped into a significant growth opportunity. Launching new membership models has helped associations to respond to new market conditions, to offer members choices, and to allow for more competitively priced options. Benchmarking data supports the claim that adopting a new model gives a membership program a significant lift. Specifically, associations that have implemented a new model are 50 percent more likely to report an increase in the number of new members compared to those who have not. New membership models that have proven particularly effective include versions of either a combination membership or a tiered membership approach.

Combination Membership

Traditionally, associations operate either as an individual membership organization (IMO) or as a trade association with companies or organizations as their members. However, many IMOs are creating a hybrid model where they continue to make an individual membership available while also adding an institutional membership option. This hybrid model is called a combination membership. An association with a combination membership gives prospective members a choice to join as an individual (like a typical IMO) or to sign up their company or organization (like a typical trade association). It appears that the movement to embrace this model is growing. In the 2011 edition of the Membership Marketing Benchmarking Report, only 13 percent of respondents identified their association as having a combination structure. By 2020, 27 percent of respondents identified as a combination membership association. The combination structure also appears to be working. Combination membership associations have the highest median growth over the past five years.

One of the best examples of an association successfully moving to a combination membership model is the American Society of Association Executives (ASAE). For over 90 years, ASAE offered an individual membership. Over time, its membership grew to 23,000.

However, ASAE was only reaching a fraction of the staff employed in the association field. Working on the assumption that an association could improve its performance by giving its staff access to the knowledge and tools that ASAE provided, the association launched its combination model. While they continued to offer individual membership, ASAE provided the option of an organization membership that made services available to the entire staff of an association. They based dues levels on the number of full-time employees in the association. With this change, in just a few years, ASAE membership doubled, growing to 46,000 and providing the association with access to many more potential attendees and purchasers.

Tiered Membership Models

The other successful membership model that associations have moved to is a tiered membership structure. This option has been the most popular, in the last five years, among those associations who have reported a change in their membership model. A tiered membership is not based on attributes of individuals or organizations; instead, it allows members to choose the option that best satisfies their needs and budget. One way to view a tiered membership model is to think of it as offering silver, gold, and platinum membership levels.

Tiered membership speaks to typical psychological buying patterns. Some people will always want the top of the line car, wine, or computer. At the same time, some consumers are budget conscious and will choose the least expensive or basic product or service. Associations offering a tiered membership structure maximize their revenue by allowing members to step into the level that they desire. Most associations have highly committed members who want access to almost everything an association produces. These are candidates for the top or premium membership level. There are others on a budget who want a no-frills option. The basic membership might be perfect for them and provide them with an attractive alternative to join or continue with the association.

For many associations, adopting a tiered structure does not require the development of entirely new products and services to be added for these new membership levels. Most associations who move to this model repackage the products that they already have available; however, instead of selling them independently, they incorporate them into the top membership levels. For example, an association might usually charge members for webinars, but be able to provide them at no additional cost to those at the premium level. Other organizations include a selection of the books they publish as part of a membership tier. They increase the press run to accommodate the premium members. And, by putting the books in the hands of these influential members, they find that they drive additional sales of the books to non-members. Interestingly, associations that have established a tiered structure find that members at the premium tier, in addition to the services included in the membership, are typically the top purchasers of other products. They also usually maintain the highest renewal rate.

Tiered membership, however, is not an “a la carte” membership. A totally customized benefits package is complicated to implement and would likely increase servicing costs. Instead, a tiered structure offers a series of defined membership packages from which a prospect can choose their preferred option.

This article is an edited excerpt from the book Membership Recruitment: How to Grow Recurring Revenue, Reach New Markets, and Advance Your Mission. Find it on Amazon.