Life Cycle IV -- Interdependence

In previous Life Cycle posts, we talked about the membership relationship beginning with awareness. I went on to discuss the importance of pro-active recruitment because of the “push product” nature of membership and the powerful contribution of engaging a new member to move them through their conversion year of membership.

The next season of the membership life cycle is interdependence. This level is the step above a simple transactional relationship. It is helping a member move to the point where his or her identity, livelihood, or safety is tied to your organization.

For a moment think of the association, charitable group, or faith organization with which you feel the most closely aligned. Why do you feel that alignment? Chances are because you are held by one of three 'glues' of interdependence.

I believe that these three elements or glues that build interdependence can be defined as: 1.) Common Vision, 2.) Reward, and 3.) Recognition. I have come to a better understanding of these over the past year through conversations with my colleague and friend Bill Jerome.

Common vision is a very powerful force that ties many of us to an organization. Many charitable groups are fully supported by selling their vision. Because we believe in the cause so much, we are happy to donate money with no expectation of reward or recognition.Have you established a common vision that you and your members are striving to accomplish together and that they can believe in and help you achieve? Members who are sold on the vision are interdependent with your association.

One of my colleagues at the United States Naval Institute once said to me: 'We don’t want someone to pay $39 to our organization solely to get a magazine, but to pay $39 because they also believe that through their membership, USNI is contributing to a better national defense for the United States of America.”

Reward is something that we all want. It is getting something back for our dollar.

The reward of membership in AAA that keeps renewal rates high is that if my car breaks down on a rainy night, someone will come and give me a tow or a jump. The 'towing' benefit is something that we would all like to have for our association.

Other organizations have succeeded in establishing interdependence through a very economically based reward system. One group accomplishes this deeper dependence through certification. Certification is required to practice in their field, and membership is required for certification. Clearly, interdependence exists here that has resulted in very high retention of members.

The most common reward that members look for from their professional association – according to Decision to Join -- is valuable training and information resources. Be sure to measure how your members think you are doing in these areas in order to establish their interdependence with you.

Recognition means that you know me, and I want to be known as one of you.It can be as personal as the great feeling of getting together with old friends at the annual convention or as technological as Amazon telling you what additional books you may want to purchase based on your previous selections. But the fact is that you are known, and this deepens your commitment and interdependence to the association.

Social media and Web 2.0 are perhaps the tools that will best help members connect with their association and build recognition going forward. Sara Costello, Manager, Global Strategy and Programs with the Society for Human Resource Management recently shared a great example of this on the ASAE International Listserv. She highlighted the just completed World Economic Forum in Davos, Switzerland which used blogs, flickr, You Tube, Podcasts, and Webcasts to build participation and recognition into the meeting.

Associations that have effectively applied all three of these glues of interdependence to their membership model have thrived.

How have you seen associations move from essentially a mailbox relationship to one of interdependence? Feel free to share your examples.

Comparing Wireless Phone Customer Churn to Association Membership Retention

Quick Quiz: Who has better retention rates, associations or wireless phone companies?

I got thinking about this the other day when I read a piece in the Washington Post on AT&T. They were highlighting that wireless “customer turnover narrowed to 1.7 percent to from 1.8 percent a year ago.” Sounds pretty good, except that they report turnover for each month. So that 1.7% monthly churn rate turns into an annual loss of 20.4% or a 79.6 percent retention rate. From my limited searching around, these rates are close to other wireless providers.

On the association side, ASAE and the Center report that the median renewal rate for individual membership associations is 87% and 94% for trade associations. [1] So associations win the churn battle. Good job!

What did you guess? What went into your thinking?

Having associations come out on top was a pleasant surprise for me. You would think that AT&T has some clear advantages to associations that might help them retain customers at a better rate. They have long term contracts with big cancellation fees, a monthly billing routine, and an opt-out instead an opt-in renewal system. Plus, they have the hot new iPhone.

If you are interested in looking at this comparison more deeply, take a look at the MSN article on a Virginia wireless company, NTELOS. At the end of the article it shows their SEC 10-K report on their wireless subscriber acquisition and renewal. It is remarkably similar to the dashboard report that I recommend to associations to keep track of membership growth and renewals. You can see the post for this on this July 9th.

[1] 2006 American Society of Association Executives (ASAE, Policies and Procedures in Association Management: A Benchmarking Guide, vol. 1 Membership P. 36.

Why get help for Membership Acquisition?

Many organizations seek outside help from advertising agencies and marketing firms when they are looking to acquire new customer or members. Why is that?

I think that the main reason is that we are very comfortable with using our “inside” marketing media channels. But we may need help when we try to employ less familiar “outside” marketing media.

As the following chart highlights, the process of making prospective members aware of an organization and recruiting them is highly dependent on the use of marketing media that does not reside within the organization. Outside media can come into play once again when a member defects from an organization.

Exploring Alternative Membership Models

A few weeks ago, I received an RFP from an association asking for consulting to help them explore new membership models. They currently offer traditional individual membership that includes a magazine and a discount on the annual meeting for dues of around $100. Not too different from many associations with whom I consult.

I thought that it was a very intelligent strategic marketing question for the association to ask. Probably every couple of years all associations should explore new membership models. And getting help from a consultant was also a wise move for this type of a study.

Anyway, the RFP got me thinking about the variety of membership models that now exist. Here is a list, off the top of my head, of my top 10. This is a brain dump, not the result of historical research. I did not include classic individual professional or trade association memberships in my list.

1. Religious Membership – Maybe the oldest, still active form of membership is membership of a religious group. As one ancient text says, “And let us consider how to stir up one another to love and good works, not neglecting to meet together.” Faith based membership is to help change the heart, but donations are welcome.


2. Credit Card Membership – American Express was one of the earlier for-profit companies to coop the concept of membership. They used the famous tagline, “Membership Has Its Privileges” and charged an annual fee for the card, but made their profits on the use of the credit card. The new tagline is “Membership Begins with the Right Card”, and they have generally dropped the annual fee, but not the interest payments.


3. Retail Membership – Costco was a revolutionary concept in retailing that started in the mid-1970s. “Membership was initially limited to small business owners, whose fees would also offset overhead costs.” Membership fees still apply. Costco offers three levels of membership, Executive, Business, and Gold Star memberships.


4. Magazine Membership -- National Geographic started in 1888 and “[Alexander Graham] Bell and his son-in-law, [Gilbert Hovey] Grosvenor, devised the successful marketing notion of Society membership and the first major use of photographs to tell stories in magazines.” When you go to the National Geographic web site now, the focus seems to be much more about becoming a subscriber than a member.


5. Insurance Membership – USAA is a membership based around providing insurance and financial services to those in the military and their families. “In 1922, when 25 Army officers met in San Antonio and decided to insure each other's vehicles, they could not have imagined that their tiny organization would one day serve 6 million members and become the only fully integrated financial services company in America.”


6. Alumnae Association Membership – As a member of the Dickinson College Alumnae Association, I get a magazine, online alumnae directory, my own web email account, an annual networking day, and the chance to participate in local Dickinson clubs. There’s no membership fee, except $43,000 annually for tuition, room and board, but donations are welcome.


7. Electronic Membership – The Association for Supervision and Curriculum Development (ASCD) offers an innovative electronic only membership for $29 a year. It is truly a paperless membership including no mailed renewal notices and full access to magazines and newsletters.


8. Avocational Membership – The Aircraft Owners and Pilots Association (AOPA) offers membership to those who are joined together by a common hobby or interest. Dues are fairly low at $39, but AOPA generates operating revenue from additional products and services ranging from aircraft insurance, to newsletters, to personal loans made available to members.


9. Fund Raising Membership – Many donation driven, non-profits offer memberships including WETA the local Washington DC, PBS TV and radio station. As a member, you get a one-year subscription to WETA magazine, WETA member decal, volunteer opportunities, and television and radio station tours. Your motivation to write the check to support the cause.


10. Frequent Flyer or Hotel Membership – “The first frequent flyer program was created in California by Western Airlines in June 1980,” according to Wikipedia. Soon after the airlines, hotels also launched programs like the Marriott Rewards membership.

What surprised me when I completed this list were just how many organizations of which I am a member. I am or have been a member of my church, American Express, Costco, Dickinson College Alumnae, USAA, ASCD, AOPA, WETA, and Marriott.

Each operates with a different financial model. Numbers of them let you in for free, but make money on secondary purchases.

Can you add any others to my list? Which model -- if any – would you recommend for your organization to explore?

Does Wal-Mart Announce a Price Increase?

We have all seen the Wal-Mart commercial announcing that prices are falling. But it occurred to me that I never see Wal-Mart or almost anyone else in the consumer world announce that prices are rising.

So last week while I was working on an article about pricing for the March issue of FORUM magazine of the Association Forum of Chicagoland, I dove back into the data from our Dues Increase Survey. I compared associations that said they announced and justified a dues increase to members to those who did not announce it or attempt to justify it.

The survey supports that silence may indeed be golden. It turns out that associations who raised dues but gave members no justification (i.e. to pay for new programs or advocacy) for the dues increase and those that did not make an announcement about the increase where more likely to subsequently see membership grow compared to any other option.

For example, groups that gave no justification were 33% more likely to see membership grow than those who justified the increase to support additional advocacy. And groups who made no announcement of a dues increase were 84% more likely to see membership grow compared to those who announced the increase at their annual convention.

For those of you who never want to hear about the dues increase research again, I promise to move on to other topics. For those who want a copy of the research, send me an email and I will provide it to you.

Membership Life Cycle Part III -- Membership Engagement

In earlier posts, I comment on the first two stages of the membership life cycle: Awareness and Membership Recruitment.
Now I want to focus on how we keep these new members from flying away from your association.

Once a member joins, he or she becomes the most likely member not to renew. Almost every association that I have worked with has its lowest renewal rate among new members. That’s why we call the first year of membership the conversion year.

Over the years, there have been many attempts at increasing renewals for these first year members. Some associations resort to sending the member a BIG new member kit to make them aware of all the association has to offer.

But there is a better solution. It is called engagement – encouraging and initiating interaction between the member and the association.

In a recent post on Growth through Membership Retention, I outlined the results from data analytics project that we conduction that showed for one association the powerful impact on renewals from different types of member interactions ranging from a member purchase to getting the member to call the association.

The survey results from ASAE and the Center’s, Decision to Join highlights the same concept. There is very little statistical difference between non-engaged members as lapsed members. “Those who are not involved lie perilously close to former members in their overarching assessments of the value they derive from associations. If former members are thought of as being dead, the uninvolved are close to comatose” (page 4).

So then how do we engage new members?

Many associations are now moving a conversion program which is a multi-step, multi-channel communication. The program is NOT built around informing the member about the association, but it is dedicated to generating a second interaction with the member. Essentially, a new member conversion program continues to “ping” the member until a response is achieved.

The program might include: a letter from the members personal member service representative asking them to call

• an email assisting the member with registering for the password protected membership web site
• a mailing with a dollars-off voucher for a first purchase
• an email survey verifying the use of member benefits
• a courtesy call to answer member questions

How important is getting a second purchase or interaction? In consumer marketing, customer-retention expert Jim Novo says, “If a customer has not made a second purchase by 30 days after the first purchase, the customer . . . is telling you something is wrong.”
Have you had experience in engaging members? Please share your thoughts.

Tips for Brainstorming Membership Marketing

I heard from several of you that with the start of the year you are thinking through your membership marketing plan for 2008. So I wanted to pass along a creativity tip that you may find helpful.

I have heard it said that creativity is not inventing something wholly new, but looking at what exists from a different perspective. Remember how you use to open a soda can?

That’s why I have found the questions provided by the late Bob Stone, in his landmark book, Successful Direct Marketing Method [1], useful in getting the creative thought process going. Here they are:

• Can we combine?


• Can we add?


• Can we eliminate?


• Can we make an association?


• Can we simplify?


• Can we substitute?


• Can we reverse?

Give these questions a try at the start of your next marketing project. You may come up with a terrific new idea.

[1] Stone, Bob. Successful Direct Marketing Methods. (McGraw-Hill; 7 edition (2001) p. 468.

Thank You Ben

For a second year, Ben Marin of the Certified Association Executive Blog handed out what I will call the “Bloggies” for the best association blogs for the year.

Ben was very kind to pick the Membership Marketing Blog as the “best new blog about associations”. He wrote, “Tony Rossell at Membership Marketing Blog is holding both bloggers and the industry accountable. This year he went toe-to-toe with the anti-marketing meme at Acronym and The Decision to Join. He cites MGI client statistics and both secondary and primary research in his posts. For these reasons, he takes home the top spot for best new blog about associations.”

The other well deserved awards include the following.

For the second consecutive year, the “best association blogger of 2007” award went to Jamie Notter, the author of GetMeJamieNotter.com.

The “best blog about associations in 2007” was awarded to Acronym, ASAE & the Center's official blog.

The “best new association blogger” goes to Maddie Grant, blogger at Diary of a Reluctant Blogger.

I sent a note to thank Ben for his dedication to association blogs. Conversations with Ben were actually part of the inspiration behind launching the Membership Marketing Blog. Thanks Ben!

Membership Marketing Planning for 2008

As the New Year begins, I thought it might be useful to outline the marketing planning methodology that I use to brainstorm and develop strategies for the associations for whom I do consulting. .

I presented this to my good friend, Chris Rogers, President of CDR Communications, at breakfast the other day and he also felt it was a good tool that would serve in his communications work for non-profits. So here it is.

We are all familiar with the four P’s – Product, Price, Place, and Promotion. They are established tools in marketing to help define strategy, but I find that they do not serve non-profits as well.

So I have adapted these for the association world to the following:

• Market – Answers the question, “WHO?”


• Product – Answers the question, “WHAT?”


• Promotion – Answers the question, “HOW?”


• Economics – Answers the question, “WHY?”

Let me make a few quick comments about each of these.

First, any sound marketing strategy needs to look at “Who” we want to reach. I have found it helpful to break most markets down visually using a triangle or pyramid.
At the top of the triangle are the best prospects for the product that we are offering. If properly defined, this is almost always the smallest segment. As we work our way down to less qualified prospects, we have increasing numbers of potential members or customers – hence the wider triangle. The goal of course is to be sure that we flow our scarce marketing funds first to the best prospects and then down the triangle to generate the best ROI.

Taking the time to carefully define who is in each market segment and how many people are in the segment is fundamental to planning.

Next, define “What” you are offering. Should your product be bundled or sold a la carte? What are your best price points? What is your unique selling proposition (USP) to each market segment? What enhancements can be made to the product to make it unique or more valuable? How does your product compare to the competition?

The third element is promotion or “How” we go to market. Unfortunately, many marketers start at this point without doing the earlier leg work. I sometimes, for example, hear that “direct mail doesn’t work for our organization.” It is possible, but it is more likely that the channel is not to blame, but the message went to the wrong person. You cannot sell ice to Eskimos.

Promotional decisions look at how best to connect the product and the market. What marketing channel should you choose (personal sales, telemarketing, direct mail, space ads, broadcast FAX, email, search engine ads, or retail)? Each channel offers unique advantages, cost structures, and response rates.

Finally, marketing planning requires an answer to the question, “Why”. Does the plan make economic sense? This involves looking at realistic projections of revenue and costs and calculating the Life Time Value, Cost of Goods Sold, and Maximum Acquisition Cost for a member or customer. I provided these calculations in a membership marketing context in my post, Know the Numbers on Membership Marketing.

I hope that these thoughts get your strategic marketing juices flowing. I wish you a joyous and peaceful New Year!

I will return to the Five Phases of Membership Marketing in January.

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.

Five Phases of the Membership Life Cycle

We have just put out a new white paper titled the Membership Marketing Life Cycle. It highlights the five major phases in the membership lifecycle:

• Awareness
• Recruitment
• Engagement
• Interdependence
• Renewal

Over the next few posts, I would like to highlight each of these phases in the membership lifecycle.

First, let’s take a look at awareness. Membership marketing starts with one very important question. Do prospective members know who you are?Awareness is the measure of how successful your branding efforts have been to gain share of mind in your target audience. Until someone knows you, they are not likely to become a member or a customer. Or put another way, how does the bee find the flower?
Good direct marketing alone is not the best or most effective tool to build awareness. For example, the United Professional Sales Association (UPSA), desired to expand its strong and thriving local organization beyond the Washington, DC area. Members of UPSA attended meetings and established meaningful networking relationships.
However, when UPSA conducted a national membership development campaign, the results were less than they hoped to receive. The promotion was targeted to an audience that tracked with local membership. The challenge appeared to be one of awareness. The market that they sought to reach did not know and recognize their brand.

Fortunately, there are some tools available to membership marketers to help build awareness. These include:

• Search engine optimization
• Search engine ads
• Public Relations
• Word of Mouth Marketing

And when awareness is raised in key constituencies, results will follow. The U.S. Naval Institute (USNI) provides a good example this. USNI just completed a very strong membership growth year, but this growth was supported by a series of videos titled, Americans at War that highlighted the real life stories of their members. These video testimonies were so powerful that they went from You Tube to being picked up on run on PBS stations across the country.

How do you know if awareness is the challenge facing your membership marketing? The best way to find out may be to conduct a small test marketing effort to the prospects that you feel would be interested in joining your organization. If the returns are acceptable, there is enough awareness to move forward. If not, it might be time to cultivate a higher level of awareness before investing funds in selling.

Frequency of Contact in Membership Marketing

In my earlier post this week on Sensible Branding, I emphasized the importance of frequently communicating your brand to your target audience.

I thought that it might be helpful to follow that up with some actual test results.

Earlier this year, we conducted an A/B split membership acquisition test for an organization where we added a follow up email promotion two weeks after our mailing dropped to a portion of the file. The email carried the same graphics and special offer that was included in the mailing.

Here is what we found. The prospects who receive only the mailed membership invitation responded at a .57% response rate. Those who received both the mailing and the follow up email generated a total response rate of .97%.

Adding the email cost very little, but raised overall response rates by 68%. That’s adding 3.9 members for each thousand contacts. Let’s say the dues rate is $200, then the additional email generated $780 more dues revenue for each thousand people contacted. Not bad.

Within reason, good membership marketing requires frequent contact with prospects, ideally using multiple channels.

Sensible Branding

I have to confess something. I have developed negative feelings toward “branding”. Here’s why. With some associations, branding has become an excuse to return to the deadly practice of “if you build it they will come”.

The branding process can stop pro-active marketing in its tracks or can become the end instead of the means to communicating with members and prospects.

After all, who wouldn’t rather spend time focusing on all of their attributes and what members and non-members “really” think about them instead of selling.

It reminds me of the humorous saying: “Enough about me talking about me. What do you think about me?”

But flying back from The Great Ideas Conference and catching up on my reading I was greatly encouraged to read an article that presented a very sensible and smart perspective on branding.

The article appeared in the December issue of Associations Now and was written by one of keynote speakers at Great Ideas Conference, Bruce Turkel.

Turkel defined branding this way, “A brand is not a name, a logo, or a masthead. A brand is the promise of a relationship—the relationship that you build with your customers when they agree to do business with you (page 28).” In many cases, the brand can be described in just a word or two.

He goes on to emphasize that of course you must deliver a top notch product as a baseline for success, but beyond having top products “the most important thing you have to do is to make your customers feel good about the time and money they spend [with you].”

Furthermore, he says, “In order to keep your brand vital to your members, your organization has to be the cauldron where the great new ideas are always bubbling. Like the mama bird catching fat worms to drop into the waiting mouths of her hungry hatchlings, it’s your job to search the world for the best practices and bring them back to your members, often before they even realize they need what you’re offering (page 29).”

Essentially, Turkel is describing great, innovative products and experiential customer service.

But here is the part where some organizations fail and where I think Turkel get’s it right. He emphasizes that once you have a brand, “You must constantly and consistently communicate your brand value. Only a constant message will break through the clutter of all the communicators trying to get your target’s attention. And only a consistent message will present your message reliably enough to stick. Ironically, this doesn’t give you license to be repetitive. Instead you have to regularly refresh your message so it doesn’t bore the very people you’re trying to excite.”

He has it right. A brand does not magically make the world come to your door. Instead, it is the foundation from which to market. Once you have a sense of the promise you can make to your members and prospects in products and experience, you need to aggressively take it onto the street, test it, adjust it, and frequently communicate it.

Ultimately it is not your brand that funds your mission. It is the dues and member purchases that allow you to fulfill your purpose.

What do you think?

More Dues Increase Findings

I wanted to share a few more items related to the dues increase survey research that we conducted this fall.

First let’s take a look at how associations justify raising dues to their members?

• 54% of associations indicate keeping up with inflation is the justification used to support the dues increase.


• 48% report that the addition of new programs or services is the justification used to support the increase.


• Close to one-quarter mention increasing advocacy as justification for an increase in dues.

Directionally, the proportion of associations offering inflation as justification for a dues increase decreases as the percentage of the dues increase grows. However, associations citing the additions of new programs and services are significantly more likely to raise dues 11% to 20% and to have provided a special offer as an incentive to renew.

Next, let’s look at how the dues increase announced to members?

• 44% of associations have announced their most recent dues increase through a letter or e-mail to the association and/or through a letter in the renewal notice.


• 40% of associations announced the increase through an article in the association newsletter or publication.


• If the announcement was made via some form of written communication, associations are significantly more likely to provide a special offer for joining/renewing.

Finally, here is how associations handled the timing of the dues increase and notification of members.

• About one-half of the associations made the dues increase known to the membership within three months of it taking effect.


• 30% of associations announced the change in dues four to six months before it was implemented.


• Only about 10% of associations made members aware of the increase a minimum of six months ahead of time.


• Associations planning to raise dues by 21% to 30% are more likely to announce this increase much further in advance.


• Only about 16% of associations provided some type of special offer to lessen the impact of the dues increase. Those who offered an incentive were significantly more likely to be implementing a dues increase of 11% to 20%.

My goal in conducting this research was to provide associations with a benchmark to consider when raising dues. Clearly, every association is different and needs to consider the environmental and political factors that they face. I hope you find this information helpful if you are considering a dues increase.

Surprises from the Dues Increase Survey

I wanted to share the biggest surprise coming out of our dues increase survey that we completed this fall. The study shows that there is a far greater price inelasticity in dues levels than is commonly believed.

As I mentioned in my last post, these results are from responses of 324 association professionals who completed our dues increase survey.

In the verbatim responses to the survey, the vast majority of responders recommended a dues increase strategy of small regular increases. This is something that I would probably also have recommended to associations.

However, the data from the survey revealed a different outcome on the impact of dues increases when looking at membership counts. As the chart here shows:

• Associations raising dues by 11% to 20% overall were most likely to report membership growing by over 10% than those who had lower or higher dues increases


• Associations raising dues by 11% to 20% overall were the least likely to see a decline in membership of under 10%.

The survey did show that there is a limit to the increase that a membership can sustain.

• Associations raising dues by dues by 21% to 30% were most likely to report a membership growing by over 10%.


• Associations raising dues by 21% to 30% were most likely to see a decline in membership.

Not surprisingly, the best revenue outcomes were also associated with dues increases of 11% to 20%. These findings show that association membership will support a dues increase as high as 11% to 20% and not negatively impact membership counts or revenue. However, anything over 20% shows a diminishing rate of return, with larger decreases in membership and acquisition rates, and declining renewal rates.

The lesson is to rely on the data, not just our intuition, when establishing pricing or any other marketing initiative. It also shows that associations that raise dues at lower percentages may be sub-optimizing their revenue.

By the way, if you would like a copy of the dues increase report, please send me an email and I will be happy to forward it to you.

The Results from the Association Dues Increase Survey

To help build an understanding of the best practices related to raising membership dues, we did a primary research project this fall of association executives. The results are in and over the next week or two; I wanted to highlight some of the findings from our research and provide some commentary on what we found.

The first portion of the survey that I wanted to take a look at is how often associations raise dues. Here are some of the findings:

• Two-thirds of association respondents indicate dues are raised as needed.


• 18% of respondent organizations raise dues annually.


• 34% of organizations have raised dues this year.


• Almost 20% last raised dues in 2006 and about 15% last raised dues in 2005.


• Associations primarily offering organizational memberships are significantly more likely to have raised dues in 2007.

Since the most common answer to when associations raise dues is “as needed”, there does not appear to me to be a pricing strategy employed by most associations. Instead, it looks like dues or price increases are driven by accountants not marketers. If dues are simply raised as needed, then the dues increase serves to back fill program funding needs.

Dues are the “price” that an association charges for membership. And price is one of the 4 p’s of marketing. It is the only one of the 4 p’s that actually generates revenue.

So ideally, dues rates should be part of the marketing equation for an association. They should not be raised simply to fund increase expenses or shortfalls from other programs. Dues should be strategically set to maximize either the number of members (lower prices) or the net revenue to the association (higher prices). This is known as price elasticity. There is an optimum price or dues rate for each association.

Let me know your thoughts on this. Should associations price membership to maximize their strategic goals?

By the way, for those of you who like the statistical backing for the survey, here is the methodology. The survey went to 10,347 association executives and we had 324 responses. The response rate for this project was 3.1%. This sample size of 324 carries with it a margin of error of +/- 5.4 percentage points. That means that if all the recipients were surveyed, we could expect that the results of that survey would not vary more than +/- 5.4 percentage points at a 95 percent confidence level.

Thanksgiving Message

I find it very easy to shift from an attitude of gratitude to one of entitlement. That’s one reason why celebrating Thanksgiving is so important.

This weekend our Thanksgiving church message highlighted this for me. It came from the text:

“What do you have that you did not receive? If then you received it, why do you boast as if you did not receive it?” [1]

What does this mean? I think it points out that life is a gift that we receive. We do not control when we come into the world or the nation where we are born or the basic skills and intelligence we possess. We receive all of them.

When I lived in Honduras, CA, I daily walked past a woman who was blind. She did not speak, but she had her hand out requesting money. Each day that I passed her, I pressed a coin into her hand. I have often thought, “Why did I have the gift of sight and the benefit of being born in this country?” I do not know. But I do know that the blessings I enjoy are things that I “received” and did not earn or deserve. I should be grateful.

[1] 1 Corinthians 4: 7

A Big Membership Decision – College

The past year has been a lot of fun. I have been able to watch my son – who is a high school senior -- be marketed to by hundreds of colleges who want him to “join” them as a student.

Joseph and I talked this weekend about what has worked best to attract him to particular colleges. Here are the three elements that were most effective in encouraging him to actually apply to certain colleges.

• Consistency – One contact did not work for us. Over the year we have collected a large laundry basket of mailings from colleges. Those who sent one letter got a quick look, but those that had a steady stream of communication were more successful in making us aware of what they had to offer and at least helping us reach a point of considering them for a visit.


• Personal Contact – Before the process began, there was one in-state school that we wrote off from consideration, but they actually turned us around and my son is applying there for admission. How did they do it? Through personal contact. They consistently had students from the school calling my son urging him to take the next step by requesting an application, scheduling a visit, sending them SAT scores, etc. They won us over by making him feel that they were interested in him as an individual.


• Enthusiasm – Once the school got us to the campus for a tour or interview, hearing from an enthusiastic speaker or guide and talking with enthusiastic students had a big impact. The presenter at my Alma Mater, Dickinson College, took the prize for the most inspiring presentation. But casual conversations with students who were passionate about what they were studying were also memorable.

As I always argue on this blog, taking the experience of one person and projecting it on everyone is NOT a good idea. However, can any of these sales or marketing elements be applied to get people to join or continue membership with your association?

By the way, thanks to Matt Baehr for the inspiration for this post. On his blog, he challenges several of us to look at things from a different angle. So I took a look at being marketed to as a consumer instead of marketing for an organization. Good idea Matt.

Wisdom for Human Resource Decisions

We deal with human resource and human relationship issues every day. Here is a good quote from a classic by Peter Drucker.

“Fast personnel decisions are likely to be wrong decisions. . . People-decisions are time-consuming, for the simple reason that the Lord did not create people as ‘resources’ for organization. They do not come in the proper size and shape for the tasks that have to be done in organization – and they cannot be machined down or recast for these tasks. People are always ‘almost fits’ at best. To get the work done with people (and no other resource is available) therefore requires lots of time, thought, and judgment.”

Peter F. Drucker, The Effective Executive, p. 32 & 33

No Good or Bad Renewal Rates

Because of the impact of differing business rules among associations and environmental factors, you cannot compare one association's renewal rate to others. There really is not a good or bad renewal rate. Instead, the purpose of calculating renewal rates is for an association to establish a standard to monitor the improvement or decline of membership retention.

Variables that limit the ability to benchmark renewal rates across associations and determine a "good" or "bad" renewal rate include the following:

• Individual membership organization versus trade association membership. Associations that offer an individual membership as opposed to associations with institutional or company memberships typically will see lower renewal rates. ASAE reports that the mean renewal rate for is 83% for an individual membership association and 91% for a trade association.[1]


• Member-paid dues versus company-reimbursed dues. Associations that serve a market where dues are reimbursed or paid for by an employer will see better renewal rates than dues paid out of pocket by individuals. Decision to Join reported that “two thirds of those who are now members of any association and have dropped an association membership in the past say that their employers stopped paying dues.”[2]


• Growing versus declining memberships. Associations with a rapidly growing membership tend to have lower renewal rates than groups with a steady or declining membership. This occurs because growing associations have a larger proportion of first year of members and first year members typically renew at a much lower rate than longer term members.


• Incentive-generated members versus full-price members. The stronger the incentive used get members to join an association, the lower the renewal rate will be when compared to members who joined with no incentive. Members who receive a complimentary membership when they attend the annual meeting, for example, will not renew as well as members who join at full price.


• Transient industry versus stable industry. Associations that serve highly transient markets, where job turnover is high or members are moving out of the industry, will see lower renewal rates than a steady marketplace. A job change for an individual association member or a merger for a trade association member raises the likelihood of not renewing membership.


• Short membership grace period versus longer grace period. Business rules on when a member is considered lapsed varies between associations. Some associations count members as renewing if they receive payment within 90 days of expiration. Other associations lapse a member on expiration and consider a payment 90 days after expiration to be a membership reinstatement.

Therefore, if an organization has an individual membership where dues are not reimbursed by an employer, is rapidly growing through the use of substantial new member incentives, is focused on an industry that members move in and out of, and has business rules that require ending an unpaid membership on the expiration date, then the association will probably have a what someone might characterize as a very low renewal rate.

But that does not mean the membership marketing staff is doing a bad job of serving and renewing the members. And comparing this organization to others that do not have the same factors is not helpful. Instead the organization should use the current rate as a benchmark and work to put new tests and programs in place to move the rate higher.

[1] 2006 American Society of Association Executives (ASAE) Policies and Procedures in Association Management: A Benchmarking Guide, Volume 1 Membership, p. 36.
[2] DTJ, ASAE and the Center, p.63.