Trade Association Challenges and Opportunities with Membership Recruitment

Membership recruitment for a trade association brings more challenges than selling individual membership. The process is complicated because asking a company to join may involve a significant financial commitment and require building a consensus among the firm's stakeholders. However, the potential long-term value of adding a company as a member can be substantial. 

 

Here are some of the players to consider in the process of recruiting a company or organization to join your trade group and the strategies for a successful program.

·       Gatekeeper – Many organizations have a system in place to screen sales efforts from reaching decision-makers. So the initial hurdle is to get beyond the gatekeeper to establish contact with someone who might be interested in membership.

·       Champion – Identifying the primary user of the membership is one of the most critical contact points. The user will become the champion advocating for the company to join.

·       Technical Buyers – In almost every major company decision, a technical buyer will be involved. These influencers may include legal or finance. Their questions and concerns need to be addressed in the sales process. 

·       Detractors – In some cases adding an association membership will create more work for some and reduce budgets or influence for others. Present how the value of membership outweighs these concerns.

·       Decision Maker – Ultimately, a leader in the company, will evaluate the benefits compared to the cost of membership. The champion needs to be armed with the data to make a case for joining.

To meet these recruitment challenges, many groups find success with a basic three-stage marketing and sales process.

·       Prospecting – The first step in recruitment is to identify prospective member companies, their leadership at a firm, and contact information. My recommended method for this is to purchase or lease a database of firms in the desired target market. This type of data is available and inexpensive to obtain. Add these records into a sales database to drive promotions and track activity.

·       Marketing – It is inefficient for sales to call cold leads. That is why marketing plays an essential role in supporting sales efforts. Marketing's job is to get past the gatekeeper and convert cold records in the database into warm leads using the full mix of channels, including direct mail, email, digital ads, and telemarketing. These communications build awareness, share relevant content, and set up sales appointments.

·       Closing – Presented with a qualified prospect, the sales team establishes a relationship by understanding the company's needs, presenting the membership solution to the champion, handling objections from technical buyers and detractors, securing the final approval from the decision-maker, and following up on the delivery of the membership.

Even though the sales process for trade associations to acquire new members is more involved and often more costly than what is experienced by individual membership groups, the outcome from these efforts is favorable. Typically, trade association members renew at much higher rates than individual members. Because of better renewals combined with the generally higher dues rates, trade associations can expect substantial lifetime value from a new member. This revenue stream helps to make the recruitment effort well worth the results.

A Response to Acronym Blog: Membership Recruitment and Retention are Alive and Well

Scott Briscoe wrote a post yesterday on the Acronym blog entitled, “RIP: Membership?” He writes, “I am firmly in the camp that this model is dying. I believe that the nature of the way people affiliate, and what they expect to get out of it, is changing.”

I think everyone will agree that the world is changing, but I am not ready just yet to put association membership in the grave.

Here are several of reasons.

First, in our Membership Marketing Benchmarking Report, 45 percent of association executives reported that membership had increased over the past year. Only 35% saw a decrease. That is pretty good considering the economy—it beat the stock market.

Additionally, 49 percent of association executives reported an increase in new member input over the past year. While only 21% saw new member input fall. The survey had over 500 participants.

Finally, I think that there is a more important indicator out there related to health of membership model. If the concept of membership is in decline then why are for profit companies running full speed toward a membership business model? I believe that they are doing it because it makes economic sense.

In the past, I have highlighted this strategic embrace of the membership concept among companies and organizations. Here are some of the posts discussing this trend.

Corporations Coop Membership Marketing – For profit marketers argue that every company should offer membership.

Costco Membership Up 30,000 per Week and Renewals at All-Time High of 87% -- Costco does not seem to be having a problem selling membership.

A Wake-Up Call for Associations – Magazines are offering association membership services

Exploring Alternative Membership Models -- Everyone from insurance companies to museums to retailers now offer membership.

So perhaps the issue is not that association membership is dying, but that association membership needs to be more effectively presented and managed.

One of the goals of this blog is to help membership marketers more effectively use this customer relationship called membership. I continue to believe that membership is an ideal model for an organization that provides good value and services to customers and wants to strengthen that relationship.

Costco Membership Up 30,000 per Week and Renewals at All-Time High of 87%

Retailers have been hit particularly hard this season, but not retailers who offer membership. Costco is reporting big membership gains and strong membership renewals.

“At quarter-end on November 23, our paid executive membership topped eight million, an increase of almost 400,000 or 5% just in the last 12 weeks or about 30,000 per week increase in the quarter so again its still has been a big success for us. . . In terms of renewal rates as I said they continue strong, essentially our all-time high renewal rate. At Q1 2009 the numbers both for business, Gold Star end total were the same as they were at fiscal year end and rounding up a percentage point versus a year ago, business coming in at 92%, Gold Star at 86%, and total a shade about 87.0%.“[1]

How can you replicate this success in your organization?

[1] Costco Wholesale Corporation F1Q09 (Qtr End 11/23/08) Earnings Call Transcript

10 Tips for Selling at Trade Shows

Booth duty at trade shows is a part of many of our jobs. So how is it done in a professional and helpful way? And, no it should not be a re-enactment of the movie Jaws.

Here is what I have learned from my experience and from my colleagues.

1. Schedule Appointments Pre-Show: Before you go to the show be sure to call or email your friends, prospects, and members and invite them to come by the booth. Provide them with your booth number.
2. Arrange Booth Traffic Pattern: Once the show starts, position yourself at the corner of the booth leaving a clear view of your booth message. Have your give-away (candy, gift, brochure) in the center of your booth, welcoming the entrance of your visitor.
3. Initiate Interaction: Reach out to people who pass by the booth and connect to them by asking an openning question like, “Do you do engineering (fill in with your profession or field) work for your company?"
4. Qualify Contact: Everyone is short on time at a trade show. There are many booths your visitor wants to see. So maximize everyone’s time with qualifying questions to see if your visitor is a decision maker for your product or service.
5. Identify Problems or Pain: Go deeper with qualified decision makers. Ask questions to see what particular issues or challenges are present.
6. Present Value Proposition: Provide a short, crisp outline of how you help with the particular problems that have been discussed. Your value proposition might sound something like, “We have members with that same challenge and they find that we help them by. . .”
7. Obtain Contact Information: Most trade show sales take place well after the show. To get back in touch for a sale, you need to collect follow up information. A business card is the easiest way to get contact information.
8. Agree on Next Steps: Get permission and agreement from your qualified prospect to follow up with them. This may be as simple as agreeing to send additional information. Write a note on the back of their business card with the action you need to take.
9. Ask for Referral: Before a qualified prospect leaves you, be sure to ask them to send other attendees your way who might have similar needs. Ask them, “Who else do you know that might be helped by our services?”
10. Prepare Follow Up Materials: Before you leave for the show, you should have your follow up materials assembled and ready to go. When you return, personalize your response with the agreed upon next steps and fulfill the request within days of your return.

Feel free to add any tips you have in the comments section. Also, I am curious to hear what you have seen done poorly at trade shows. We could come up with a top 10 list of what not to do.

Associations “Get it” that it is all about the Relationship

If you read this blog frequently, you will know that I believe that membership association executives are really relationship marketing professionals. Just like transferrable association job titles for director of IT, marketing, human resources, the relationship marketing role is one that we should highlight as needed and important both to non-profits and for profits.

So it is interesting to see that although for profits want to build relationships with their customers, many do not get it yet. I think that it is fair to say that all associations have some type of welcome program for new members.

However, it appears not to always be the case in the corporate world. “Two recent studies – one by deliverability firm Return Path, another by e-mail service provider Silverpop – found that a third of online merchants fail to send any e-mail to new subscribers within 30 days of sign-up. Even more astonishing, 60% of online marketers don’t send ‘welcome’ e-mails to new registrants, according to Return Path.”[1]

[1] Ken Magill, “You Can’t Even Say Hello? DMers that don’t send ‘welcome’ e-mails are just begging for trouble”, Direct, July 2008, p. 33.

What is my Career? Membership Development is Relationship Marketing

Do you work in membership development, membership retention, or membership marketing? If you do, you may have trouble explaining what you do to others, including prospective employers outside the non-profit or association fields.

I believe the answer to the question, “what is my career?” is that you are a professional engaged in “relationship marketing”.

The textbook description of relationship marketing from Philip Kotler follows.

“Relationship marketing has the aim of building long-term mutually satisfying relations with key parties – customers, suppliers, distributors – in order to earn and retain their long-term preference and business . . . The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists, and others) . . . The operating principle is simple: Build an effective network of relationship with key stakeholders, and profits will follow.”[1]

If that sounds familiar it is because that is what we do.

Kotler goes on to describe the progression in relationship marketing as moving people through eight stages of relationship starting with “Suspects” and moving to “Partners”.[2] Here are his stages.

• Suspects
• Prospects
• First Time Buyers
• Repeat Customers
• Clients
• Members
• Advocates
• Partners

All of these stages have relevance in membership development. However, in membership we tend to shorten the cycle and bring people into the membership relationship sooner. The relational marketing progression that I have recommended to use for associations is pictured below. You can read about it in my post titled, Five Phases of the Membership Life Cycle.

Here is the bottom line. If you are involved in membership marketing, you have a very valuable and transferable skill. You have developed hands on experience of establishing, building, upgrading, and retaining a customer. You are a relationship marketer.

[1] Philip Kotler, Marketing Management, Prentice Hall, page 13.
[2] Philip Kotler, Marketing Management, Prentice Hall, page 50.