Membership Marketing: Ten Year Retrospective

2018 marks the tenth anniversary of the Membership Marketing Benchmarking Report.  Looking back over the past ten years, we have witnessed very stable growth in membership counts and continued the maintenance of positive membership renewal rates.

However, this has not represented a changeless marketing environment.  In fact, the methodology and focus of how associations have accomplished their goals has evolved and changed over the past ten years.  The channels that associations use for membership recruitment and engagement show the most significant change.  Payment options have become more sophisticated and automated.  But sadly, despite more computing power than ever, the use of data and data analysis has shown almost no forward movement over the last number of years.

Here are some of the major changes associations have put in place in their membership marketing efforts.

• In 2009, 46% of participants said that direct mail was the most effective membership recruitment channel.  By 2018, word-of mouth recommendations, email marketing, and promotions to/at your association’s conferences or trade shows are affirmed as the most effective recruitment techniques.  Direct mail is cited only by individual membership associations as one of the top three recruitment channels.
• One recruitment channel that has seen recent growth in reported effectiveness is paid digital marketing.  For 2018, 17% of individual membership associations and 12% of all participants consider digital marketing to be one of their most effective channels for acquiring new members. The associations that use digital marketing effectively note that paid Facebook advertising and Remarketing (using Facebook, AdRoll, Google) are the most effective methods (68% and 49%, respectively).  This digital channel was almost invisible in our research until 2015.
• When it comes to fulfilling new memberships, for 2018, only 44% of associations report sending a mailed welcome kit to onboard their new members.  This is down from 51% in 2017 and significantly down from 83% ten years ago in 2009.
• Overall, association executives are most likely to say that members join to network with others in their field (58%), and learn best practices in their profession (26%).  In 2009, the top reason to join was access to specialized information.  To learn best practices in the profession was the fifth reason given for joining in our 2009 research with only 8% offering this reason.
• There now appears to be a deeper understanding of the membership relationship than in the past.  In 2009, the top reasons cited for non-renewal were membership dues were too expensive and the employer was no longer paying dues.  For 2018, lack of engagement with the organization is the most commonly-cited reason for non-renewal.  In fact, 37% of associations list this as a top reason and the majority of associations (62%) report that they have a tactical plan to increase member engagement.
• By 2018, Facebook and Twitter are almost ubiquitous as the most popular social media platforms used across each type of association.  Facebook is officially used now by 93% of associations and Twitter is used by 89% of associations.  This compares to 75% of associations using the Facebook platform in 2010 and only 66% of associations using Twitter in 2010. 
• At the same time, association offering listservs has dropped from 24% in 2010 to only 9% in 2018.
• In our 2010 research, only 22% of associations reported offering automatic annual credit card renewals.  This payment method has expanded over the years.  Automatic annual credit card renewals are especially popular among IMOs with 45% making this option available.
• Associations’ use of Automatic Annual Electronic Funds Transfer (EFT) renewals has increased over the years from 10% in 2010 to 17% in 2018.
• The length of time associations continue to reach out to lapsed members with reinstatement efforts has expanded.  In 2009, 21% of associations said that they “continue indefinitely to contact lapsed members,” and by 2018, this has increased to 33% of associations.
• Finally, although we do not have longitudinal data in this area, it appears that the ways that members engage with an association is shifting.  When asked the engagement opportunities that associations report as increasing over the past year, over half of individual membership associations reported increases in participation in the following areas: in their public social media (73%), in a private social network (59%), in their young professional program (54%), and in attendance of their webinars (52%).

On the other hand, the engagement activities that have shown the least increase over the past year for individual membership associations include volunteering with the association (35%), the use of career services (32%), the purchase or maintaining of insurance through the organization (27%), and book or directory purchases (27%).

There are some membership practices that have not seen substantial change over the last number of years.

Even with increased computing power over the years, one area that has shown remarkably little improvement is the types of analysis done by associations to measure the effectiveness of membership marketing campaigns.  When comparing data from 2012 to 2018, the level of data analysis and results reported shows very little improvement.  Conducting membership marketing response rate analysis has only increased slightly from 49% to 51%.  Lifetime value analysis of a member’s economic contribution to the association has declined from 16% to 10%.

Associations also continue to report the desire to reach out to acquire younger members.  However, in 2011, 18% of associations offered a young professional new to the industry membership category.  And this year, the same percentage of associations (18%) report that they offer this membership category.

The full 2018 Membership Marketing Benchmarking Report contains detailed information on all of these changes.  Please take a look at the full report.

The 2018 Membership Marketing Benchmarking Report

The tenth anniversary edition of MGI’s Membership Marketing Benchmarking Report is now available to download.  Participating associations will soon receive a printed in copy in the mail.

The theme of this year’s edition highlights the evolution in how associations go to market as they seek to recruit and retain members and how remarkably associations have adapted to changes to remain strong and vibrant.  In fact, the data highlights that association membership continues to show growth and staying power.

In looking back over data from the last ten years, it is significant to note that the 2018 key membership statistics mirror the resiliency that associations have reported over this period, perhaps challenging those who have prophesized the imminent demise of the association membership model.

With the exception of the latent impact caused by the economic downturn of the Great Recession, the trend of associations reporting an increase in membership counts has been remarkably consistent over the past ten years.  Slightly more or less than half of associations show solid membership growth during this period.

Similarly, a large proportion of associations have reported very stable renewal rates over the past ten years.  Again with the exception of the years around the Great Recession, associations have reported that their renewal rates have either “remained the same” or “increased” over the past ten years.

Here are some additional highlights from this year’s data.

• Results show an uptick in the percentage of associations reporting increases in membership over the past year (48% vs. 46% in 2017). Similar to 2017 findings, only 25% of associations report declines in membership in the past year, and about one-quarter report no change (26%).
• For associations reporting increases in membership over the past year, the median increase is a very respectable 5%.
• More than half of all associations report increases in membership totals over the past five years (53%). Trade associations are most likely to report increases (56%), compared to IMOs (52%) and combination associations (51%).
• At 47%, almost half of associations also report increases in new member acquisition over the past year. Only 12% of associations indicate their new member acquisitions have declined in the past year, and 35% indicate there is no change in their new member acquisition numbers.  New member recruitment continues to be the driver for growth in membership counts.
• The median renewal rate reported this year is 84%, and 68% of associations report renewal rates of 80% or higher. At 89%, trade associations have the highest median renewal rate. IMOs and combination associations have similar renewal rates; both show renewal rates around 80%.
• Finally, we continue to see the benefits of associations that effectively reach out to younger members.  Associations with increases in their one-year membership and five-year membership numbers are significantly more likely to have a higher percentage of millennial members. IMOs reporting declines in their membership over the past five years are significantly more apt to report a higher percentage of Baby Boomer members.

 

The Membership Marketing Benchmarking Report is made possible by the faithful contributions of hundreds of associations that contribute their data, comments, and guidance each year.  I want to warmly thank each association that has participated this year and over the ten year life of this research.

The report this year includes additional information on engagement and certification programs along with chapter membership that you will find valuable.  Here is the link to download the full report. 

 

How to Calculate Your Membership Renewal Rate

One of the most important numbers to get right in membership marketing is the proper calculation of an association’s renewal rate.  Nevertheless, it is not uncommon as I meet with associations to find their renewal calculation incorrect.  I think the confusion stems from getting lost in the trees instead of starting out looking at the forest.

Let me explain.  In very simple terms, an organization’s renewal rate calculates how many members remained with the organization from twelve months earlier.  To get these numbers, you first need to know how many members you had at the beginning of the period.  Next you need to know how many members you have now.  Then to determine how many continued their membership over the past year, you subtract the total number of new members from your current membership (new members were not eligible to renew).  This gives you the count for how many members your organization retained.

Here is an example.  Let’s say you had 10,000 members on March 1, 2017.  And twelve months later you also have 10,000 members.  But of the current 10,000 members, 2,500 were added as new members over the course of the year.  That means your net continuing members were 7,500.  And if 7,500 of your original 10,000 members continued with you, you have a 75% renewal rate.

So that is looking at the big picture – the forest.  But what happens if your computer report gives you a different number?  This discrepancy typically comes because of the business rules that were used to set up the database report.

Here are a couple of common problems.  One is how reinstated members (those who pay dues after the grace period has ended) are counted as either new or renewing.  With an anniversary date system, I recommend that late payers who are given a new expiration date should be counted as a “new” member and not be included as a continuing member.  With the example above, if 500 reinstated members were removed from the continuing membership number and were now counted as new members, the new member count would be 3,000, pushing your renewal rate down to 70%.

The other common problem is where Life Members or multi-year members are counted.  They continued their membership, so in the example above, they would be counted as renewing members even though there was not a separate financial transaction. Essentially, this method means that the terms renewal and retention can be used interchangeably.

The bottom line is when you are attempting to calculate your renewal rate, start out with the big picture.  Do the simple math first then if reports come out of your database that do not corroborate the simple math, look into what business rules have been factored into your report.  Once the aggregate renewal rate is established, then a month by month rate can be calculated using the same method with the exception that the count of renewing members should continue to be updated until the grace period for that expiration month comes to an end.

The goal is to get an accurate renewal calculation where your math and the database report synchronize.  Ultimately, the economics of membership and calculating lifetime value, maximum acquisition cost, and steady state calculations depend on an accurate renewal rate.

Calculating the Cost to Serve a Member

One of the questions that I am frequently asked is how to calculate membership servicing costs.  It is an important question to building and sustaining a success membership marketing program.  But how you answer the question can have profound implications on your membership program.

Here is a real life story on how NOT to calculate the cost to serve a member.  One of my clients presented the following analysis to his staff.  He took the entire budget for his organization and divided it by the number of members and determined that the cost to service a member who annually paid $79 in dues was $300 ($3,000,000/10,000 members).

Shocked and with tongue in cheek, I told him that the best solution for the organization was to email all of the members and tell them not to renew – they would save $221 for each member who did not return.  Of course they would have to survive without the $800,000 in dues revenue and some portion of the non-dues, advertising, and exhibitor revenue dependent on members.

But in all seriousness, when an organization assigns too much cost to serving a member, the calculation can kill a membership program.  Why would an organization spend even the smallest amount of money on recruiting or renewing a member when the cost to serve approached the annual dues rate?

So what is the best way to determine the cost to serve a member?  I believe that the optimal method is to base the analysis on incremental servicing cost.

The incremental cost is simply made up of the variable costs that the association would incur to serve an estimated number of additional members.  These variable costs might be as simple as printing and mailing additional magazines and renewal notices.  You can determine these incremental costs by working with suppliers to get an estimate of what the additional cost would be if, for example, you printed and mailed and additional 1,000 magazines and sent out additional renewal notices to 1,000 more members and then divided these costs by that number of members.  A typical association might find these costs are less than $20 per member and not the $300 per member noted earlier.

Clearly over time for a rapidly growing association the incremental cost method poses some problems.  At some point, additional staff will be required to serve members and office space might need to be expanded.  But I have witnessed clients growing membership by 50 percent and not adding staff or additional space.

The other approach to calculating servicing costs is to try to define the “real” costs to serve a member.  The challenge is that what those real costs are is highly subjective.  Should the servicing costs include some portion of the CEO’s salary?  What about the editorial staff that works on publishing the magazine for members?  Should only the office space occupied by the membership department be assigned to the cost or the space used by others?  Are marketing communications sent to members a cost and if so does the membership revenue budget get credited with the non-dues purchases made by members?  How does the cost of insurance, software, and staff travel get assigned?

All these costs in theory can be assessed and monitored over time.  However, does this really provide a clearer picture or simply reflect someone’s arbitrary judgment call?

The bottom line is that for most associations, serving members is the reason that the organization exists.  And in addition to dues revenue, most product purchases, registrations, exhibit and advertising revenue are driven by the existence of members.  So understanding that there are costs to provide services to members needs to factor into any economic calculation, but following a simple incremental cost calculation will provide the fundamental information needed at a considerable savings of time and debate.

How to Communicate a New Membership Model

Many associations are evaluating and launching new membership models or restructuring their current membership.  Some of the new approaches include discussions previously outlined on this site including tiered membership, hybrid membership, and electronic membership.

But once a new membership model has been researched, defined, and approved, the next steps are critically important: the communications plan to introduce the model to members and the larger marketplace.

Here are some recommended steps for effectively introducing a new membership model.

1. Create Messaging Document – As a first step, in order to have a consistent message shared through staff, promotional materials, and volunteer leaders, a clear and concise messaging document should be drafted that states the official reasons for the membership model change and the cost and benefit implications.
2. Advise Association Stakeholders – Every association has important volunteers and leaders who carry a high level of influence.  Notifying them of the coming changes and the purpose for the changes before they occur helps with the acceptance of the new model. 
3. Complete Website and Database Updates – Perhaps one of the most challenging aspects in establishing a new membership model is making sure that it functions seamlessly from the website through the AMS for both the join or renewal process and that the instructions provided on the website are clear.  Make sure everything works before going public with the new membership model.
4. Develop Dues Notification Letter, Email, and Article – It is unlikely that you can communicate with members too frequently about a change in their membership.  So the best plans are to notify members of the new model and how it will impact them with multiple communication channels.  The letter and email can be personalized to highlight how the changes will impact the member as an individual or company by noting new dues prices, benefits, and operations.  An article published in the association’s newsletter can address the careful process that was followed to make the changes and the larger benefits to the industry and to members. 
5. Update and Launch Membership Renewal Series – A new membership model will certainly impact the renewal process of an association.  The renewal communications need to highlight the changes and benefits of the new mode. If dues will be substantially higher for an organization then an early notification may be needed so the new dues rates can be budgeted for ahead of time. 
6. Review Membership Collateral Materials – Membership benefits are communicated in multiple ways by associations from magazine ads, to exhibit booths, to brochures.  Review all of these materials to be sure they accurately represent the new membership model. 
7. Launch Membership Recruitment Campaign – One of the purposes of a new membership model should be to attract new members who previously did not see value in the membership.  Once the new membership is operationalized, an aggressive membership recruitment effort should be launched to highlight the new opportunities and options now available.

Many associations have found that revising a membership structure that may have been established decades ago can be a lever for substantial growth in membership counts and revenue.  But coming up with the best new way of packaging membership alone without a plan on how to adequately communicate the reasons and the benefits of the changes will result in the transition falling short.  The process of communicating a new model is as important as researching and building the new membership. 

Everything You Always Wanted to Know about Membership Marketing but Were Afraid to Ask

Best practices, technology, and regulations are changing at such a rapid pace that it makes keeping up a real challenge.  So here is a webinar where you can voice the questions that are impacting your membership like:

·       How is digital marketing being used to get and keep members?

·       How do you overcome email fatigue?

·       What is the appropriate budget to spend on membership recruitment?

·       How are associations handling CASL and EU Data Protection GDPR)?

·       Why do members lapse and what can be done to keep them?

·       What data analytics tools can be used in membership marketing?

The webinar is on Tuesday, October 17, 2017, at 1:00 p.m. ET.   MGI’s Senior Account Directors Harold Maurer and Elisa Joseph Anders will answer the most pressing questions submitted in advance by webinar participants. Registration is now open using this link.

Take some time out of your busy schedule to participate. 

2017 Membership Marketing Benchmarking Report

The 2017 Membership Marketing Benchmarking Report is now available as a downloadable PDF. Here are some of the highlights of this year’s research.

Once again, many more associations are reporting an increase in their membership compared to those siting a membership decline.  Individual membership organizations (IMO’s) led the way with 48% sharing that membership had an increase over the past year.

In fact, many associations report substantial growth rates.  Of those organizations that showed increases in overall membership, one-quarter report increases of 6% to 10%, while 19% report increases in membership over the past year of more than 10%.

Similarly, associations are maintaining membership growth over the longer term.  Again this year, 50% of associations report that their membership over the past five years has increased.  And if we look back over the historical trend from our very first benchmarking report, associations have consistently reported an ongoing five year trend of increasing membership counts.

These outcomes challenge the narrative put forth by some that membership as a product and professional and trade associations as a category are in decline.

In addition the increases reported in total membership counts, the 2017 Membership Marketing Benchmarking Report also highlights continuing strong data on other key membership statistics.

Similar to 2016, 68% of associations’ report renewal rates of 80% or higher. The median membership renewal rate is 84% overall. Trade associations have a higher median renewal rate (89%) compared to IMOs (80%) and combination associations (82%).

Renewal rates from our benchmarking research have remained remarkably stable of the years meaning the engine for membership growth continues to be new member acquisition. This does not in any way say that maintaining a high renewal rate is not important, but it does show that growth depends on continued new member acquisition.

And strong membership acquisition results have continued for associations.  Over the past year, 45% of associations report increases in their new member acquisitions, with IMOs showing the most growth (47% vs. 45% for trade associations and 43% for combination associations).

However, all of this positive data does not mean that associations are not facing significant challenges.

Respondents reported some major external challenges to their association.  For IMOs the cost of membership and competing associations are the top two challenges.  And Combination associations are most likely to struggle with declining member/employer budgets (32%).

For trade organizations, the biggest external challenge is industry consolidation/shrinkage (36%).  One participant shared in the comments section of the research, “Our market is shrinking and certain leaders are averse to opening up our member categories to expand opportunities.”

Internal challenges were also identified in our research.  IMOs are significantly more likely to be challenged in attracting and maintaining younger members (26%), while trade organizations struggle more with proving that their membership provides a tangible ROI (32%). And Combination associations find it more difficult to meet the needs of a diverse membership (27%).

But the good news is that the analysis of this year’s data also highlights signs of vibrancy that is helping to drive membership growth.

For example, it appears that associations – especially those that are experiencing membership growth – are more effectively reaching out to upcoming generations of members.

In fact, associations estimate that about 21% of members are Millennials or Gen Z.  And associations reporting an increase in membership over the past year, the past five years, and an increase in overall renewals are significantly more likely to have a higher percentage of Millennials.

New technology is also helping associations market more broadly and effectively.  Specifically, there has been a rapid adoption of online digital marketing including Facebook paid advertising, search engine ads (pay-per-click), lead generation content marketing (White Papers), and paid banners on other websites.

Many participants highlighted the use of these tools in the comments section of our research noting, for example, “Facebook remarketing has been successful, especially when specifically targeted to a specific audience such as our Young Professionals.”

Finally, another driver building more vibrant memberships has been engaging members with new products and services that deliver what members want when they want it.

In the case of IMO’s for example, when looking at the products and services that are reported as showing stable or decreasing engagement, one finds many of the traditional and long-term association offerings like volunteerism, the purchase or maintenance of insurance, or book or directory purchases.

However, when looking at what is reported as showing increasing engagement and participation, we find activities like participation in the public social network of the association, participation in the private social network, attendance at webinars, or participation in a young professional programs as the fastest growing engagement tools.

In other words, increasing engagement has been driven by change and innovation and not relying on the services of the past.

For 2017, the Membership Marketing Benchmarking Report continues to highlight growth and resilience for membership associations.  But maintaining growth is challenging, taxing, and requires hard work and constant innovation. 

You can review the entire report here.  We hope that you find this year’s report helpful, challenging, and encouraging as you serve the members of your association.

 

Webinar Posted: 2017 Membership Marketing Benchmarking Report

The headline for the soon to be released 2017 Membership Marketing Benchmarking Report is that for the ninth consecutive year, many more associations are reporting an increase in their membership compared to those noting a membership decline.

Our webinar sharing some of the top findings in the forthcoming report is now available with this link.

Membership Marketing Benchmarking Report Webinar

The session looks at principal findings from the research, the membership challenges reported by associations, and the drivers of resiliency and growth shared by participating associations. 

Highlights from the 2017 Membership Marketing Benchmarking Report

The full 2017 Membership Marketing Benchmarking Report will be released next month, but here are some of the highlights of this year's report.

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. 

Just Released: Community Benchmarking Study

For the past three years, Marketing General Incorporated and Higher Logic have produced the Community Benchmarking Study. The latest edition is now available as a download.

Here is your link to get a copy of the study.

Clearly, for many people, connecting is moving from face to face to online interactions whether it be with Facebook or some other platform.  And association members are no exception to this trend.

So the Community Benchmarking Study highlights important insights on the impact that an online community can have on overall membership growth and member engagement. The Study examines the ratios of members who are discussion creators, contributors, passive (viewers), and inactive.  It also includes a case study using real data from ASAE, with their permission, on the reach and engagement scores for their association.

The Community Benchmarking Study is a great resource for associations to use to measure and improve their member engagement and networking in the online world. 

Determining Your Association’s Missionary Product

The most expensive task in marketing is new customer, member, or donor acquisition.  But many associations are trying to fight the marketing wars on multiple fronts because they have not identified their introductory or missionary product.  Instead they reach out to the marketplace with many products like membership, certification, conference, or publications.

An association that defines the product with the best level of response and return on investment and focuses its marketing resources on it to bring prospects into relationship with the association will achieve the most success.  The strategy is then to upgrade or cross-sell additional products and services to buyers of the introductory product.  However, when acquisition marketing efforts are spread over many products lines the marketing impact is diluted and the costs increase.

For associations, the most successful missionary product is membership.  This makes sense when you think about it.  As a member, a prospect is signing on to stay in touch with you for the next twelve months allowing for regular upgrade and cross-selling opportunities for secondary products and services.  Additionally, the average member stays with an association for five years, so there is a long-term income stream tied to a new member that supports the initial marketing investment.

On the other hand, a book buyer may only be interested in a specific topic and perhaps make their next purchase through an online bookstore.  And a conference registrant or certification candidate has to make a much bigger financial and time investment compared to the price of purchasing a membership.

But whatever product or service an association chooses to use for new customer acquisition, it makes sense to support it with adequate budgets and push.  Growth comes through focused efforts targeted at a specific market segment.