Two New Membership Models that are Thriving and One Membership Model that is Struggling

As they look to the future, many membership groups are looking for ways to either increase revenue of cut costs. To achieve this, they are introducing new membership models. Here is what I am seeing with some recent programs that our clients have developed.

1. Premium Membership – There are always highly committed members that want the top individual membership available. So one group I work with added some low cost, but helpful, new benefits to their regular membership and created a plus or premium option. They priced the higher level membership at $97 compared to the regular membership price of $49. With very little promotion members have moved to this new category primarily as they see the option when they renew online. It has increased revenue at almost no additional cost.

2. Institutional Membership – Traditionally membership associations are either an individual membership organization (IMO) or a trade association with company or organizational memberships. However, many IMO’s are creating a hybrid model where they continue to offer an individual membership, but also make available an institutional membership that includes benefits for multiple individuals in the organization. The results are very positive, more revenue and higher retention rates. Essentially these associations have grown their share of wallet beyond the one or two memberships that they normally would have from a single organization to a much higher dues figure.

3. Online Membership – As a cost cutting measure some associations have offered a lower price, paperless membership. All of the services are delivered electronically. Initial signups for this type of membership are good because of the lower dues amount. However, renewal rates for this membership category have been disappointing for many organizations. I have seen renewal rates as low as 15 percent. The challenge with the electronic membership model may be that online members do not receive the “push” of tangible mailed services with their membership. They have to be very proactive to extract value from the membership. And many do not have the time or take the initiative to benefit from services that are not pushed directly to them.

Exploring new membership models is part of the formula to keep a membership strong and thriving. However, not every new membership model works. What new membership models have you tried in your organization?

Non Dues Revenue and Affinity Programs for Members

Lists can be helpful to get brainstorming going on what additional products and services can be provided to members. My research shows that with each additional purchase from an organization the loyalty and tenure of a member increases.

So here is a quick list of possible non-dues revenue and affinity products that I have put together to get your thinking going. Please feel free to add any that I have missed in the comments section below.

1. Advertising
  a. Ad Sales
  b. Directory Sales
  c. Exhibits
  d. List Management
  e. Sponsorship

2. Association Products and Services
  a. Books, directories, periodicals
  b. Continuing education – seminars, webinars, meetings
  c. Conventions

3. Credit Card

4. Hotel Discounts

5. Insurance
  a. Auto Insurance
  b. Dental Insurance
  c. Disability Insurance
  d. Home Owners or Rental Insurance
  e. Hospital Insurance
  f. Identity Theft Insurance
  g. Life and AD&D Insurance
  h. Pet Insurance
  i. Professional Liability Insurance
  j. Travel Insurance
  k. Vision Insurance

6. Investments and Banking

7. Job Bank

8. Legal Services

9. Logo and Insignia Items

10. Medical Alert

11. Overnight Shipping Discounts

12. Prescription Program

13. Rental Car Discounts

14. Shopping Discounts
  a. Dining
  b. Flowers
  c. Fuel
  d. Office supplies
  e. Technology

Six Components to Building Your Membership Model

Membership models are a hot topic these days. I am speaking with a number of clients about options on how to build new memberships or adapt current categories.

Instead of trying to build an exhaustive list of the different membership models now being deployed, I thought that it might be of more value to outline the components that go into and can be changed to form a new membership.

I have identified six levers that an organization can adjust in a membership product. By thinking through and making decisions in each of these areas you can define the membership model that best fits your organization and the needs in the market.

Here are the six elements that go into building a membership model.

1. Participants – Who do you want as participants in the membership? This can be defined as specific markets or market segments. It can also be defined as whether the membership is for individuals or groups of people in organizations or companies.

2. Value – What products and services are desired by your market that you are able to deliver to the membership? Providing value involves both understanding the need for content, community, savings, etc. and also your knowledge and ability to deliver what is needed.

3. Term – When do you want the membership to start and to end? For many organizations the standard term of membership is a year. But many memberships – like health clubs – offer a monthly membership term. Others require multiple years of membership tied to an event like certification

4. Fulfillment – Where do you want to deliver membership benefits? There is a growing shift from providing a paper based or in localized in-person membership to an electronic only membership.

5. Price – How much, if anything, do you want to charge for the membership? Memberships can range from tens of thousands of dollars to just a few dollars a year. And increasingly, the concept of ‘Freemium” membership is being tried by organizations where membership is used to build community or engagement as part of a larger economic strategy.

6. Purpose – Why do you want to create the membership? The ability to create a membership model and an economic plan to sustain it are very important in planning, but Tom Collins also points to doing what you are deeply passionate about as a foundation for success.

To build your new membership model, I suggest that you look at each of these membership components and list all of the options under each that are available to you. How you mix and match each of these options will form the outline for the membership model that best fits your organization and the needs in the marketplace.

Please feel free to post a comment here if you think that I have missed any important membership components here.

Increasing Member Value through New Product Development

There is much conversation around increasing the value of membership.

Here are some suggestions on increasing membership value through new product development, adding real value to what the association tangibly provides to members. New Product Development also keeps membership exciting and prevents you from being eclipsed by your competition.

When looking at new product development, an association has a choice of two strategies. First, an association can introduce new products in a current product line (e.g., new seminar titles, book titles). This strategy simply involves doing more of what you are now doing successfully. It is a lower financial risk, but also lower profit strategy.

The second strategy involves the creation of new product lines (e.g., starting a compensation survey or a webinar program). Obviously, this strategy involves much higher financial risk, but if done properly can result in significant new revenue for an association.Here are five characteristics that a new product should include to help ensure success.

1. Desirability -- It may seem overly simplistic, but start your evaluation of potential new products by making sure to select items with a high perceived value attached to them by the members or customers. Use focus groups, executive interviews, and surveys to determine your members and customers real and felt needs. And 'stay close to the customer' by spending time talking to your members to confirm the findings you receive from research. Then test market your new product idea to a small sample of your membership to see if your research is accurate and if the price is acceptable. Fundamentally, your best research is whether or not your sample of members opens their checkbooks and buys your new product.

2. Profitability -- After you have discovered what your customer wants, package the new product in a way that makes it economically feasible for your market situation. Take advantage of the leverage found in your particular marketplace. For example, is your membership small but has access to large sums of money? Then package your new product in a format that can command a high price and provide you with high profit margins. With a small market, a new book selling for $19.95 is unlikely to return the margins you might want for the effort required to produce and market it! Is your membership large, but lacks access to corporate funds or discretionary income? Then sell a high volume product at a lower cost like the $19.95 book.

3. Renewability -- Whenever possible make your new product a continuity product. The costs of making one sale are so high that profitability on any but the highest margin product becomes difficult. For associations, membership is the ultimate continuity product. Be creative and duplicate this success by designing new products around a regular renewal. For example, you may want to turn your seminars into a multiple course certification series. Encourage standing orders for your new DVD releases. Try turning your publications program into a book club.

4. Duplicability -- Your staff's time and energy is one of your greatest resources. So avoid creating highly customized products that require constant involvement and servicing by staff (e.g., customized workshops, research libraries). Instead try and let printing presses or web do the work for your staff. Try putting rapidly changing specialized information into an electronic newsletter.

5. Reach-ability -- Make sure your audience is reachable through the channels available to you. For instance, before you decide to hold a conference in Europe, be sure mailing lists exist in your field so you can appeal to potential attendees. Also some products can be sold through the mail or your Web site and others need a personal phone call or sales visit. Evaluate if you have the staff, expertise, and budget to market through these channels.

If you would like more information on growth strategies, you may want to look at some posts from last year. I did a number of posts related to the Five Growth Disciplines -- Introduced of membership marketing. One post related to extending the membership product line (adding new levels of membership).

Five Growth Disciplines -- Introduced

Okay, if growth is what we want for our membership, what do we do to get it?

Several years ago a book came out that I enjoyed. I liked it because it clearly outlined strategies that I had long believed in as foundational to generate growth.

The book is, Double-Digit Growth: How Great Companies Achieve It--No Matter What, by Michael Treacy

Treacy articulated five disciplines that led to double digit growth for organizations. They are:

1. Keep the growth you already have earned.
2. Take business from your competitors
3. Show up where growth is going to happen
4. Invade adjacent markets
5. Invest in new lines of business

I don’t think that the book caught hold in the non-profit market. We don’t like to talk about “taking” business from other associations or “invading” markets. Nevertheless, there is wisdom in his recommendations.

So in the association membership context, I might translate his disciplines to:

1. Retain your current members
2. Present your value proposition in your marketplace
3. Stay on the cutting edge of your industry or field
4. Expand to new markets
5. Expand your product lines

I hope to take a look at some of these growth strategy disciplines over the next few posts. But first let me know if I am missing something in this list?