Membership Recruitment Book Release

For many years I have cataloged my experiences as I consulted with perhaps a hundred professional and trade associations to understand and capture the successes and challenges these groups have had in growing their membership.

That is why I am happy to share many of these lessons with you in my just-released book,  MembershipRecruitment: How to Grow Recurring Revenue, Reach New Markets, and Advance Your Mission.

This book aims to answer three critical questions: Why is a growing membership so important? How can a thriving membership program be planned and executed? And what is required to achieve long-term membership resiliency?

You can order your copy of the book in print or as an eBook on Amazon. Here are some of the early book reviews.

 “Membership Recruitment is a thoughtfully written guided tour of today’s membership marketing universe, complete with how-to advice for the uninitiated, updates for the experienced, and fresh insights for everyone.”

 Joy Davis, CAE
Managing Director, Member Products
American Association of Pharmaceutical Scientists

 "Tony Rossell is the Master of Membership Marketing. This book is not a theoretical treatise; it reflects Tony’s work over many years, during which he has executed these principles over and over again to the great benefit of many membership associations. As the terrain shifts under the feet of non-profit associations, and for-profit corporations capitalize on the membership model, Tony’s expertise on member acquisition and retention is to be treasured by anybody serious about membership growth.”

 Ron Mattocks
Chief Operating Officer
Council for Advancement and Support of Education

“Tony Rossell is a leading expert on all aspects of membership from recruitment through retention. As it is stated in the book, ‘Members can and should be the driving power for association success.’ This book should be required reading for all who work in a membership association. The book contains practical, research-based advice and guidance that will assist associations in the development of strategies both to increase membership and retention.”

Neil Reichenberg
Former Executive Director
International Public Management Association for Human Resources

“If you are in the membership business, do yourself and your organization a favor by buying and reading this book. Tony Rossell understands the membership business better than anyone. Save yourself years of trial and error by discovering what he has learned during a long and successful career in membership marketing. Tony knows what works today and where the trends are leading us tomorrow.”

Frank Kenny
Founder
Chamber Pros Community

Membership Recruitment: How to Grow Recurring Revenue, Reach New Markets, and Advance Your Mission is available on Amazon. You can also get more information here. 

Sample Marketing Language for Automatic Membership Renewals

One method to improve renewal rates is offering members the option for automatic credit card renewals. I get a lot of questions about this, so I thought it might be of help to provide some sample language you can use to present this option on recruitment and renewal efforts.

“[ ] Yes, I want to join or renew. Charge my credit card and provide my membership benefits with automatic renewal for as long as I wish to continue. See below for details.

As a credit card member, we will continue your membership as long as you wish without interruption, unless you tell us otherwise. At the end of your initial term, and before the start of your new term, we will simply charge your credit card at in the dues rate then in effect. Should terms or rates change, we will notify you in advance. If we cannot charge your credit card we will send you a bill for your dues.”

This language is provided as a sample only. The goal of automatic renewal is to transform the renewal process from being opt-in to an opt-out. This language also allows for a billing option once the credit card has expired.

Testing a Free Trial Membership Acquisition Program

There is a long history of using free trial offers in membership marketing. In essence a free trial offer substitutes providing member services for marketing efforts. It is an attempt to have the product sell itself.

I thought that I would highlight four basic methods that I have used or observed others use to bump up membership returns using trials. By doing some quick calculations, you can determine if one of these methods might be good to try.

1. Opt-in Trial: This method is perhaps the most common in membership marketing. The option features and initial promotion to prospects and asks them to accept a membership trial. Upon acceptance, the respondent receives membership for a specified period of time and additional promotions requesting that he or she join. Depending on the quality of the list, the initial response can be between three and five percent. The final conversion can be about 30 percent. The advantage is that you are only providing free services to a low number of prospective members who request the trial and converting a larger portion of them.

2. Force Free Trial: This method provides a free-trial to a qualified audience that did not specifically ask for the trial. It may be a list that you have compiled or that is supplied to you by some other source like current members. Services are provided to these prospective members for a period of time and then these prospects are asked to convert to a paid status. The final conversion rate from a well qualified list can be about 10 percent. One challenge to this method is that you are providing services to a much larger group with a proportionately lower level of payment because they never directly requested the membership trial.

3. No-Obligation Trial: Like the opt-in trial, this method gives a prospective member the choice to ask for benefits. But there is one key difference. When a prospect agrees to this trial, he or she also agrees to allow the organization to invoice them for the membership. The respondent has the choice to pay an invoice or write “cancel” on the invoice and owe nothing. Getting permission to invoice can dramatically increase the final paid rate especially if the prospective member can submit the invoice for company payment. The initial response to this type of offer can be one to three percent. However, the final payment rate can be as high as 50 percent.

4. Negative Option Free Trial: This is a method that I have not used, but it is becoming increasingly common. Under this method, when a free trial is accepted, the respondent provides their credit card information and has a limited period of time to evaluate the membership. If the trial is cancelled by the respondent, there is not charge. However, if no notice is given then the respondents credit card is charged for the membership.

In the March 2010 edition of ASAE’s Membership Developments newsletter, Karen Krzmarzick, CAE, the Executive Director, of the American Society of Ophthalmic Administrators (ASOA) reported on her success with one free trial method. By my definition, ASOA tried both a force free trial and opt-in trial approach.

For the force free trial, ASOA “sent individual emails out to each physician member of ASCRS [a partnering organization] asking for the name of physician's practice administrator. These individuals where then automatically signed up for the free trial program. “

Also, as an opt-in approach, ASOA said that they “placed ads on our website and promoted the program through business-reply cards in industry magazines.”1

ASOA was encouraged by the outcome. Overall membership is growing. They reported 700 current free trial participants and a conversion rate of 11 percent to membership.

However, what works for one organization may not work for another. If an organization has a large potential market and a low dues rate, for example, the force free trial may be far too expensive to deploy. On the other hand, in a small niche market, getting only 3 percent of the market to try a free trial may not produce the volume of new members needed to grow. 

Here is the bottom line, always run the numbers for your particular situation before launching a new membership marketing initiative.

1. ASAE Membership Developments, March 5, 2010, http://www.asaecenter.org/files/images/sectionnewsletters/md0310.pdf

Integrating Channels and Content to Recruit Members

Testing is such a powerful tool in direct marketing. I would like to share today the outcomes of two tests that produced a substantial pop in results.

The first has to do with channel integration – connecting with a prospective member through multiple media.

We tested this recently using mail and email simultaneously to prospective members. We split our audience into two groups. One group only received a direct mail membership solicitation. The second group received the same direct mail package, but also received a follow up email. The mail only group produced a 1.23% response rate. The combined mail and email group produced a 2.08% response rate. This represents a 69% lift in overall response by adding the email.

I have seen a number of tests combining mail and email in membership acquisition over the past year and in each case the combination has improved response over either channel used in isolation. In adding email to the marketing mix, it is important to remember that email is not free. Often email lists needed to be rented for the promotion and the creation, deployment, and building a companion microsite also involves costs.

A second test included channel integration, but added to the mix exclusive and useful content. I call this content integration.

Here is how this test was structured. The prospect list was split evenly and the relevant touches were sent out at the same time.

The control group received a direct mail solicitation and a follow up membership recruitment email. The email provided a link to a customized microsite with an in-depth presentation of the organization’s membership benefits.

The test group received the same direct mail solicitation, but a series of emails where used to follow up the mailing. The first follow up email offered access to a microsite full of information on how an organization could take advantage of the American Recovery & Reinvestment Act (ARRA). The second email provided a link to another microsite that included a staff presentation again focused on how to access funding from the ARRA.

The third and final email replicated the control email from above and provided a link to the microsite outlining the membership benefits.

So the test really focused on the use of free, exclusive and relevant content to engage the prospective member.

The test group was the decisive winner. Allowing for a statistical margin of error, the test group outperformed the control group by over 300%. It did over three times better in both the number of members and in dues revenue.

What can we learn from these tests? One lesson is that intensity is important in marketing. More touches with valuable content in a short period of time gets a prospects attention. In addition, all of the communications pushed toward a sale.

Feel free to post your questions or observations about these tests here.

Monthly Installment Dues Billing: A Case Study

Everyone wants to increase their membership recruitment results and renewal rates and here is one tip to do just that – monthly installment billing of dues.

If you think about it, our society has moved to a month by month financial focus. Your cell phone, internet, car payment, and service contracts are paid each month. In fact, our likelihood to purchase these products would be greatly diminished if we were required to pay for the year in advance. We are also more likely to continue the services when the payments are automatically debited from our credit card or bank account.

However, most membership organizations do not offer the opportunity to pay monthly. A member is typically required to pay the full dues up front.

Over the past several years, we experimented with making monthly installment billing available to members. I wanted to share with you today a case study from one organization that has tried this program.

Let me start out by admitting that putting this type of program in place is an administrative challenge. Credit cards expire and have transaction fees. In the case of electronic funds transfers (EFT), bank accounts open and close. So this type of change will require staff time and programming time. The higher the dues payment, the more beneficial this type of program will be.

For my case study group, the idea to test installment billing was first raised as a method to increase response rates on membership acquisition mailings. Research showed that the $225 price tag for dues was an impediment for members to join.

So we built a head to head acquisition test for this organization. The control offer with the $225 price went to 37,640 prospects and the same package offering the additional option of an automatic credit card payment of $18.75 a month went to 37,623 prospects. The results were impressive. The control package generated 436 new members for a 1.16% response rate. However, the test package with the installment option produced 657 members fro a 1.75% response rate.

Clearly many prospects were more willing to join if they had the option to pay monthly.

The next question was how will members who select the monthly installment renew compared to members who pay up front. Our latest data reports on members who renewed on time. The on time renewal rate for members NOT on the installment plan is 55.7%. However, the on time renewal rate for members participating in the installment plan is 82.0%. The non-installment member rate will probably rise to 70% when late renewal payments are included. But even when late payments are included, a potential twelve point lift in renewals is a major improvement.

The bottom line for this organization is that making an installment dues option available to members has caused an increase in the work load for staff, but it has helped produce more new members, more revenue and a better renewal rate. It may be something that more membership organizations should test.

And the Best Membership Recruitment Offer Is . . .

In direct marketing there are three traditional keys to success: list, offer, and copy. A good promotion, for example, should include some type of offer to highlight why the prospect needs to respond now.

So as part of our Membership Marketing Benchmarking Research, we asked what recruitment offer was most effective in getting the most new members. We also cross tabulated their answers with renewal rates.

Respondents reported that the best recruitment offer was a “discount on first year dues”. This did not come as a surprise to me, because I have tested a discount many times and with a variety of organizations. It has consistently tested well.

But here is a BIG SURPRISE. Some marketers claim they do not use a discount because it will hurt renewal rates. However, the research shows that of those who offered a new member dues discount 75% had renewal rates of over 80% and 25% under 80%. This outperforms the overall respondent base with 68% having renewal rates over 80%. In other words, new member discounts actually correlate with higher membership renewals.

Here is how respondents report the “most effective offer in getting more new members”.

Keep the Membership Recruitment and Retention Engine Running

Sometimes the perfect is the enemy of the good.

I have particularly noticed this tension of late in conversions with membership marketing people over building a strong membership product against getting the current product out into the marketplace.

Here is the kind of conversation I have had.

Membership: “I cannot do any membership marketing until I fix the value that I provide to my members.”

Tony: “How do you know that this needs to be fixed?”

Membership:” We see members’ lapsing each month and our research shows that they want more value.”

Tony:” Are members still renewing at a good rate?”

Membership: “Yes, but all we give members is a magazine and newsletter. We need to do more.”

As you might imagine, I have some concerns with this thinking. First of all, I will never argue against adding more value to a membership package. But be aware that sometimes we are our own worst critics. We hear negative comments from a few members, but forget that the vast majority of members vote with their pocket books and renew year after year.

In fact, the research that drove the book, Decision to Join, says that most members leave for reasons other than value. “Approximately half of them [lapsing members] indicate their reasons had more to do with career and other life changes than with the performance of the association. This means that those who worry about their retention rates get a 50 percent discount on their current distress levels.” (Page 3)

This level of leaving an organization is akin to what the economist call the natural rate of unemployment. People will come and go at some level each year.

The good news is that even in a changing market where membership value continues to be enhanced and recast, many members and prospective members will vote for membership through properly executed acquisition and retention strategies.

Here is one example, Association BisNow reports, “Membership in the American Occupational Therapy Ass'n grew from 32,000 to 39,000 the past four years. Fred Somers has been CEO for five and implemented new recruitment and retention methods that helped win back members who suddenly viewed membership as discretionary spending.”[1]

In keeping with full disclosure, AOTA has been a client of my firm, Marketing General, Inc. for the past four years. Membership came to be viewed as more “discretionary” when certification and membership were separated.

So what is the take away from not letting the good become the enemy of the perfect? Don’t believe that the product you offer is inferior until the market clearly tells you. Keep recruiting new members. Keep renewing members. But never stop listening and improving your membership product. Marketing and product development is not an either/or. Both are needed, now.

[1] Association BisNow, An IOTA from AOTA, February 4, 2009.

Membership Life Cycle – Part II

Most associations have done a good job at building market awareness. Over the years, members and prospective members learned about the association from doing research, a professor, or a colleague.

After awareness, recruitment is the second part of the membership life cycle. It is the process of getting a member to join your association. Or perhaps better described, it is the process of getting a member to 'try' your association.Membership in professional associations is typically what marketers call a 'push' product rather than a 'pull' product.

A 'pull' product is best defined by the famous statement made in the movie Field of Dreams 'if you build it, they will come.' There are some products that consumers will spend hours seeking out. They do not need a lot of marketing. There are web sites dedicated to tracking down a “pull” product like the Nintendo Wii .

As opposed to the Wii, membership tends to be something that needs to be sold or pushed in order to get returns. Did you ask for a professional membership for Christmas?

A pro-active plan needs to be put in place in order to attract large numbers of new members to an association.

I believe that the single biggest reason that many associations are not growing membership is because of this lack of focus and funding for membership recruitment. I looked at this issue in more detail in an article that I did for ASAE and Center’s Associations Now.

When membership recruitment is done properly, most groups can see their membership blossom and grow.

The National Middle School Association is a good example of the importance of 'push,' or active recruitment.

Jeff Ward, the Deputy Executive Director of NMSA said ‘the association believed that it had a high level of awareness in the school market, but for many years we had experienced a flat membership.'Then the association settled on an aggressive membership recruitment program designed to take membership over a five-year period from 17,000 members to over 31,000. Once the acquisition program was launched, numerous tests were made to optimize both to the NMSA membership product and renewal system. The end result was that over this five-year period, NMSA indeed grew by over 80% and reached the new membership level of 31,000 members.

A solid recruitment plan requires an ongoing learning mindset that uses testing strategies to optimize three key areas:

• The marketing message - To determine what value proposition is most attractive to prospective members.


• The membership offer - To determine what price points, benefit packages, and special incentives will attract members.


• The target market - To determine what market segments or lists of prospective members are most responsive to the message and offer.

Next we will take a look at what you do with the new members once you get them.

The Optimized Membership Marketing Program

Stepping back and looking at the forest instead of the trees is often very healthy. So in a white paper that we just released that is exactly what I tried to do for those involved in planning for membership marketing.

I asked the question, “What if you could start over again with your membership marketing program?”

The paper is titled, The Optimized Membership Program and it provides very practical advice on the components that should be considered in building – or revitalizing -- a membership marketing plan. It includes suggestions on:

• Web Lead Generation


• Acquisition Campaigns


• Customer Cross-Sell Systems


• Hotline Outreach Programs


• New Member Conversion Programs


• Member Upgrade Programs


• Multi-Media Renewal Systems


• Membership "Win Back" Programs

If you would like to download a copy, just click on the title above.

What would you add to -- or subtract from -- this list that has worked for you?

Know the Numbers on Membership Marketing

'Know the numbers' is the best advice that anyone can give you when it comes to membership marketing. Knowing the numbers can help answer key marketing questions like: 'What is the value of a member?', 'How much can I afford to spend to obtain a member?', and 'What is my membership retention rate?

The following formulas are provided as a handy reference tool for membership marketers to help them take a strategic look at the economics of membership.

Renewal Rate

• Renewal Rate measures the number of members kept over a given period of time -- usually during a fiscal or calendar year.
  · Total Number of Members Today (minus 12 months of new members) / Total Number of Members in Previous Year
  · Example: (105 - 15)/100 = 90% Renewal Rate
  

Average Tenure

• How long on average do members stay with an association?
  · Reciprocal of Renewal Rate: 1 – Renewal Rate or, 1 - .90 = .10
  · Example: Divide Reciprocal into 1, or, 1 /.10 = an Average Tenure of 10 years

Lifetime Value (LTV)

• Assume $100 / Year Dues and $50 / Year in Non-Dues Revenue
  · (Dues + Non-Dues Revenue) x Average Tenure = LTV
  · Example: ($100 + $50) x 10 = $1,500 LTV
  

Maximum Acquisition Cost (MAC)

• Assume Incremental Servicing Costs = $20 and Cost of Goods Sold = $25
  · ((Dues + Non-Dues Revenue) - (Incremental Servicing Costs + Costs of Goods Sold)) x Avg. Tenure = MAC
  · Example: (($100 + $50) - ($20 + $25)) x 10 = $1,050 MAC