Another Membership Marketing Success Story

If membership as a way to connect with your community and customers is a dead or dying concept, why are so many for-profit companies running to embrace it?

There are lots of success stories around membership.  Here are some key statistics from one for-profit organization that focuses on membership, Costco.  From new member input, to growing the top membership tier, to maintaining a high renewal rate, Costco’s numbers are enviable.

New Member Input -- Costco continues to see a growth in the addition of members.  They added 2.3 million members in 2009, more than 4 million in 2011, and over 1.6 million new members joined Costco during the first two quarters of fiscal 2013.

Tiered Membership – Costco offers a higher tier of membership called “Executive” membership for $110 compared to the typical $55 rate.  Today that higher tier of membership represents one-third of Costco’s overall members and is rising.

Membership Renewal – The membership renewal rate for Costco has made incremental improvements over the past year.  It now stands at 89.9% and Costco even had a fee increase of 10% late in 2011[1].

Why has Costco been so successful with their membership program?  I think there are four main ingredients that have contributed to their success. 

1.     Market Size – One advantage that Costco has over most membership organizations is the enormous market potential that they enjoy.  They are a global brand and there are a lot of consumers.  But there is also fierce competition for the dollars of these consumers. 

2.     Product Value – Membership’s high renewal rate demonstrates that consumers are receiving value for their membership dollar.  The price and quality of goods are excellent. 

3.     Promotion – Membership allows Costco to focus its marketing efforts on a core group of customers instead of having to broadcast messages to the general public.  This targeting is much more economical. 

4.     Economics – Membership allows Costco to deliver goods almost at cost to its members and instead make its profits from membership fees. Those fees make up only 2% of its total sales revenue, but 77% of its operating income [2].  

Costco is only one example of both for-profit and non-profit organizations that have built successful enterprises around membership programs.  So if you are in doubt of the benefits of a membership program, don’t raise the white flag.  There is hope.

I will be sharing some of this hope on August 4^th at the ASAE Annual Meeting in Atlanta, where I will present a session titled, Diagnose and Solve Your Membership Marketing Challenges.  If you are at the meeting, I hope you can attend the session and then stop by and say “hello.”

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[1] Costco's New Membership Growth Keeps Sales Humming,

June 4 2013. 

[2] 3 Reasons to Buy Costco, Isaac Pino, CPA and Blake Bos, The Motley Fool Jan 17th 2013

Why Share the Wealth through Membership Recruitment?

This past weekend, I was in Chicago doing some membership presentations and spoke with members of one group who asked, “Why should I recruit members for the organization? Aren’t I just helping my competition?”

I appreciated the honest question. Here is how I answer the question, but please feel to share your perspective.

I can think of at least six reasons to invite others to be members.

1. A competitor’s ability to find out about membership and the products and services behind them is only a click away on their computer. It is not as secret as one might think.

2. A competitor having membership information is much less important than that competitor’s ability to execution on what they have learned. Win on your ability to execute not on simply knowing something.

3. No matter how sophisticated or unsophisticated a fellow member, there is still something to learn from them through interaction as members. Ultimately, you will learn and grow from the interaction.

4. A bigger and better membership organization benefits everyone since it enables the funding and development of more services and resources for all members.

5. A bigger and better organization helps heighten the image and awareness for the entire industry.

6. Helping a competitor by sharing membership may result in an acquisition, new employee, or referral in the future for you.

Please feel free to add your thoughts in the comments section.

Tangible Benefits Matter

We just completed a survey evaluating the effectiveness of a recently launched printed, membership periodical. The good news is that the members very much like the new benefit.

But what was most impressive about the survey results was how the publication increased member loyalty. For those who received and read the new publication, we found that they were:

• 33.9% more likely to say, “I would recommend this association to colleagues and friends.”


• 15.4 % more likely to say,” I plan to continue my membership.”

Admittedly, we may have a bit of a chicken and egg situation here. More committed members may be more likely to read association publications.

But this data is corroborated by ASAE & The Center’s Decision to Join survey returns.

When asked the question “How do you prefer to receive information about your profession or field?” the option of receiving “magazines and journals” was the choice surpassing conferences and meetings, E-newsletters, and an association web site.

The data from these two surveys serves as a reminder that part of member’s decision to join may be altruistic, but providing tangible product in return for dollars spent is still a key ingredient to getting and keeping members.

What do you think?