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. 

 

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. 

Cleaning and Enhancing Data for Better Membership Marketing

Perhaps one of the most talked about topics in membership marketing today is data.  Topics range from cleaning data to appending third party information to member and customers records.  The reason for this increased focus is that good data empowers more efficient marketing and leads to better targeting and results.

Poor data is a major problem.  The USPS estimates that “almost 25% of all mail pieces have something wrong with the address -- for instance, a missing apartment number or a wrong ZIP Code.”  And 17 percent of Americans change their address annually.

But there are tools available to improve data hygiene and scrub your current and former membership data.  You can contract for them through a full service agency or mail house or lease these tools as part of your CRM software.  These tools include:

1.      Coding Accuracy Support System (CASS) – CASS software will standardize mailing addresses to the USPS’s preferred presentation of the address.  It can also add missing information like an incorrect ZIP code.

2.      National Change of Address (NCOA) – NCOA includes over 160 million address changes from individuals, families, and business that have been provide to the USPS going back as far as 48 months.

3.      Direct Marketing Association’s (DMA) Mail Preference Service --   The DMA allows people to opt-out of receiving direct mail solicitations.  This file is available to identify those in your database who do not wish to receive mailings.

4.      Social Security Administration (SSA) Deceased File – This database contains 86 million deceased records to help remove these people from your database.  In a recent running of this file, we matched .4% of the current and former members of one organization matched the SSA database.

5.      Merge, Purge, and De-Duplication – Invariably duplicate records will find their way into anyone’s database.  The merge-purge process identifies matching records based on an algorithm and highlights duplicate contacts even when they are not an exact match (different spellings of names or work versus home addresses).
 

Keep in mind that these data hygiene tools are not a onetime fix, but a regular practice that needs to be done to maintain accurate records.  And once you have gone through the cleaning process, be sure to establish and maintain standards so new data is checked as it goes into the system.

Once data is cleaned and standardized, appending additional information to the record can provide an opportunity for much better targeting efforts and sending the appropriated messages.  However, you should avoid any appends that your members would view as a violation of their personal or company privacy.  The two primary sources of information are consumer and firm based data appends.

1.      Consumer Data Appending – This service can provide demographic, psychographic, and lifestyle appends based on individuals or households.  Some of these include:  date of birth, income, vehicles, mortgage, marital status, educator, licensure, mail order purchases, phone number, and party affiliation.

2.      Business and Firm Appending --  This service can provide NAIC codes, number of employees, sales volume, phone numbers, years in business, parent and branch identification, key staff, and legal status.
 

The decision on what data to append should be driven by your plan on how you will use it.  What do you need to know to be more targeted, relevant, and accurate?  One organization, for example, in order to enhance their insurance marketing efforts was able to add date of birth to 40 percent of their member records. Another group was able to reach new to the profession individuals using the dates of newly earned professional licenses.

The information in your database is fluid.  The real data changes every day, so there is no perfect database.  However, the practice of regularly cleaning your data and appending important information can drive success for an organization.