In the past, recessions have been boom times for member based organisations who have understood how to capitalise on them. The panic we are currently witnessing out there in the market shows that many have forgotten this.
If your member based organisation is to be successful it is important to ensure that you are getting the 9 critical elements of a successful membership program right. You need to ...
1. Know the different segments of your membership.
Imagine you are just starting out in your career or business. You are on a steep learning curve and need the information to catch up with the rest of the market. You need to be able to quickly build networks and gain a foothold in your sector. There is a lot to learn - including the background issues. On the other hand, someone who has been in their career or business for 15 years knows this background and is more concerned with keeping up to date with what's happening in their sector and negotiating through networks they are already fairly comfortable with in order to advance themselves and their business. In another 15 years that person is now senior and has enough knowledge of the sector to play an active role in the direction of the sector if they wish.
It is because of the stark difference in needs during business and career life cycles that segmentation of this type has proven to be appropriate for many industry and professional associations. Indeed recent research has found that career and business lifecycles are generally the most effective way of segmenting the membership of professional and industry associations.
It is essential that each segment:
- has common challenges and needs that can be satisfied by the same group of products and services;
- has similar responses to the same marketing communications; and
- is of a group size that is appropriate.
Take a moment to consider your own membership. Write down your membership segments. Do the people in each of those segments have common challenges? Do they respond in the same way to marketing communications? If your organisation was opening its doors for the first time tomorrow, would this be the segmentation strategy that you would choose?
2. Know your statistics for each segment
Several years ago I was talking to the CEO of an association. I asked him how his membership was doing. He was pretty pleased with how things were going as member retention was at just over 90%. However, I then asked which segments were performing well and which segments were they needing to put some work into. He didn't know. He had assumed that a 90%+ growth rate meant that all segments were performing well. I worked out his retention rate by segment and found that some segments were performing exceptionally well with 95%+ growth rates. Several were performing relatively well in the high 80%. And one was losing members hand over fist with a retention rate of about 62%. Having this information enabled the CEO to take effective action. He immediately implemented emergency retention initiatives in the 62% segment and recruitment programs in the other segments. Overall this lead to a massive increase in performance with both the member retention and growth rates soaring.
Retention rates are a good measure of member satisfaction because renewals are essentially a referendum on member satisfaction. It shows how vitally important it is that you understand these statistics for each segment of your membership.
This is a great way to decrease your marketing costs and increase the effectiveness of your membership marketing as a quick analysis of your growth and retention rates can give you an understanding of the strengths and weaknesses of your member recruitment and retention processes and enable you to take targeted action.
There is a set of basic membership statistics that every membership manager needs to know. They need to know these statistics not just for the entire membership but for each membership segment within the organisation (eg for standard members, student members and corporate members). You need to do this to gain a clearer picture of the situation because it’s possible that different types of members fall into different growth/retention categories.
You can find a longer article on membership statistics including examples and benchmarks in the Resources section of www.membershipsolutions.net.au. However, the main statistics you need to know are ...
- Retention Rate - percentage of members retained over a period of time. ((# Members End Period – # Members Joined over period) / # members at start)*100
- Growth Rate - rate at which membership is growing ((# Members End Period - # Members Start Period)/Members Start) * 100
- Loss Rate - The percentage of members not retained… 1-Retention Rate
- Tenure - The length of time that a member stays… 100/Loss Rate
- Lifetime Value - average spend of a member during their membership… (Average Dues + Average Non-Dues) X Tenure
As a minimum, take a moment to work out the retention rate for each of your market segments. Which segments do you need to urgently focus on retention? What segments do you have a high enough rate of member satisfaction to focus on recruitment?
3. Understand the value that each segment is seeking.
Several years ago I was undertaking a recruitment campaign for an industry body. I had put together a deal on merchant facilities that was so good that joining was a no-brainer. In almost every case the retailer was saving several times more than the cost of membership as a minimum. The value proposition on joining was strong – “if I join then this will help my business as I will immediately save money”. New member growth was very strong. But deals like this are only good for a year or two. So the next step was to use this time to educate new members on the value that was potentially more important but vastly more difficult to communicate - our lobbying and advocacy work. This two-tiered approach made our communications much simpler as we weren't seeking to tell them everything all at once.
When someone pays money to join an association they are making an investment in the success of something important to them. That may be an investment in the success of their career, business or simply advancing a cause or issue they are believe in.
Your job is to understand the value that each segment of your membership is seeking and then come up with a mix of benefits that will help them to realise that outcome. Common outcomes sought are: leads for new business, tools to market that generates more business, reduction of costs, increased profit and a raised personal profile.
When trying to promote your value don't make the common mistake of simply listing your products and services as benefits. Just about every association has a magazine, runs conferences and training, has networking opportunities, a website and an email bulletin. Promotions like that are just dull, uninspiring and ineffective. Consider how more effective it would be for an industry body to start by telling prospective members something like: "As a member we will help make your business more profitable by providing you with increased opportunities to sell your product, reduce your costs and raise your profile within the market." You can then go on to explain how you will do that (and if you can't do that for your members you need to do some work on your product and services mix).
If there are segments you need to target to improve your performance then you need to talk to them and really understand the value they are seeking from your organisation. Don't rely of general opinion of association leaders on what products and services may be appropriate as they only understand the needs of their own segment. For example, research has shown that association leaders don't generally give enough importance to the products and services that young people rate as important - such as access to career information and employment opportunities. This may explain why so many associations have such difficulty recruiting and retaining younger members.
What is the value your market segments are seeking when they join your organisation? How can your organisation deliver on that value?
4. Create the product mix needed to deliver that value.
About two years ago an industry body went through the process of segmenting their membership. They then reviewed their products and services to match them up to the different segments. When they finished they found that they had three services left over that didn't fit into any segments. They cut those services and saved themselves a great deal of money. As yet none of the members appear to have noticed.
When you understand the outcomes that your market segments are seeking you can review your product and services mix to ensure that you are clearly delivering that outcome. If a product or services isn't clearly delivering outcomes for your members then save yourself some money and get rid of them. A recession isn't a great time to be carrying unused services!
And bear in mind that, in most cases, members are only joining for 1 or 2 of your services. Those associations that deliver a large mountain of services could be clouding the true value of membership for many members.
When deciding on the products and services required talk to the members in the relevant segment rather than relying on the opinions of association leaders. Recent research has shown that the perception of the value of an association increases with the level of involvement. This means that long term members are more likely to be retained as they have a higher perception of value. However the level of involvement rises to a point where those who govern (the Board and Management Committees) are no longer in sync with the perceptions of the majority of the membership (who are not as involved) and therefore their opinions are not necessary truly reflective of the majority. It is vital that elected leaders are aware of this as and appreciate the need to research member opinions and perceptions rather than to rely on their own perceptions of what is required.
Which of your products and services deliver true value to your members? Do you need the rest?
5. Determine the perceptions you wish to create and make all your interactions and communications with members reflective of those.
I've just joined an association. About a month after joining I get the new member pack. It's huge. I decide to read it later and file it. Shortly after I receive an email promoting an event. I attend the event and it's full of people I don't know. I don't really get a chance to talk to anyone and, while it was interesting enough, I'm really not enthusiastic about going to another. A few months later I jump onto the website. I see a really interesting article which I read. I try to click through to purchase the book but the link doesn't work. No matter - I just click through to Amazon. Just prior to renewing I decide to call the association to get next year's event calendar. When I call the woman isn't rude but I just feel like I have interrupted her day. It's not anything that you'd complain about but I wouldn't call her friendly. When the time comes to renew I don't bother as I didn't really use the services.
Contrast with how it should have happened ... I've just joined an association. About a month after joining I get the new member pack. It's not that big because it's tailored just to my needs. I have a quick skim and, while I don't do anything about it, I get an idea of the services most relevant to me. Shortly after I receive an email promoting an event. I attend the event and it's full of people I don't know. Little did I know, but the association plants happy member volunteers at the event whose only job is to make sure the new members have a good time and meet lots of new people. I have a wonderful time and I meet a couple of people who I catch up with privately later on about some business opportunities. A few months later I jump onto the website. I see a really interesting article which I read. I also click through and buy the book. Just prior to renewing I decide to call the association to get next year's event calendar. When I call the woman is just fantastic. She's so friendly and helpful. She not only gets me the calendar but gives me a bit of background about a couple of events that she says that other people in my position have been really interested in. I sign up to one of them over the phone. When the time comes to renew I decide to go ahead. So far it's been good!
In each of the above examples the association saw exactly the same interactions - they posted a new member pack, sent an email promotion, got a registration for an event, got a hit on the website and a phone call into the office. And yet the result was so different ... it's because the success is in the details!
Every time someone interacts with your organisation they are forming an opinion about it (either consciously or subconsciously). You can't stop that process happening but you can influence the opinion (or perception) that is being created.
Considering that recent research found that 34.1% of people first learn about the association via a colleague or co-worker, showing the importance of creating positive perceptions can't be under-estimated.
The challenge for associations is that membership is intangible. It is not possible to touch, taste, smell or feel a membership. As a result your prospective and existing members can only form opinions about your membership from the intangible representations of the membership - the people they talk to; promptness of response; the look, feel and wording of your communications; how well your website works; the kind of experiences they have at events; etc.
You need to decide the kind of perceptions and opinions you wish to create and ensure that every aspect of your organisation reflects that positioning.
What opinion would you like your members to have of your organisation? How can you reflect that opinion in your day to day interactions with members? On your website? At your events? Over the phone? In your publications?
6. Get all staff involved in creating positive perceptions.
An accountant working in an industry body had been working there for about three months and had yet to talk to a member. It was time for renewals to go out and, being conscientious, he had read the constitution where it clearly stated that members must be given six months written notice should they wish to resign their membership. So he sent out the renewals with a bright yellow sticker attached that stated "Payment required within 7 days or legal action will be taken". Without speaking to a member he had single-handedly managed to devastate their membership numbers that year.
You need to make sure that every single person is your office knows they have a responsibility for creating positive perceptions as even those with little or no member contact can significantly influence membership growth.
How can individuals within your organisation help create those opinions with people who contact your organisation?
7. Tailor your communications for each segment.
A professional association sent out notification to their members every day containing consulting opportunities they might like to apply for. A staff member at the association thought that sending an email out every day was excessive and changed it to a weekly email. The association was inundated with complaints.
Communication with your members is only excessive when it is not useful. Your goal when communicating with your members is to make the communications targeted and relevant to each segment. When a member sees a communication from your organisation they should feel compelled to open it quickly because they know it will be something they should see.
Look at your membership segments and find ways to tailor your communications so that each group only receives communications that are relevant to them. In addition to tailoring communications to the various segments of your membership consider taking it a little further. For example: when marketing your events run different campaigns for previous participants vs those who have never attended an event.
If you have the technology to support it, consider putting in place a process for members to be able to nominate the type, frequency and means of communications they receive.
Are your communications so compelling that when your members see them they feel compelled to open them immediately?
8. Actively engage prospective and existing members.
You would be unlikely to walk up to a stranger in the street and ask them to marry you. But that is exactly what many people promoting new membership do.
In the same way that people need to get to know each other before getting married, prospective members and new members need to get to know your organisation before making an initial or ongoing commitment of funds and time. Therefore you need to determine the most effective path for a prospective member to follow that will grow their trust and confidence in your organisation.
You can do this through constructing a trust continuum through which you can engage your members. The trust continuum starts with a low commitment, low trust step (such as subscribing to a free email bulletin). As it progresses each step will require a little more commitment and trust. In the attached paper you can see a basic example of such a continuum.
For each member segment you need to determine the best steps to take in order to build that relationship with them. This is necessary because if you asked every person who was a valid prospect to join the first time you met them it would be unlikely that the majority would say yes. On the other hand in most cases, if you were to ask them if they would like to be subscribed to your free monthly “taster” email bulletin then your positive response rate would be much higher. Then, with that person in the system you can follow them up for membership at your leisure. It also provides you with a list of prospective members who you can invite to events as well.
As the process going on you need to ensure that there are plenty of ad hoc volunteering opportunities for your members to participate in. These can be something as simple as reviewing an article to speaking at an event or assisting in the review of a new membership brochure.
This process is an exceptionally important step in retaining members as research shows that ad hoc volunteers are more likely to renew than un-involved members. In fact they found that uninvolved members lie very close to former members in their assessment of association value - if former members can be thought of as being 'dead' then the uninvolved are close to comatose. Ad hoc volunteers are an important segue between uninvolved members and the committee workforce. They are a distinct segment who are not yet fully engaged with the “common good” concept but are engaged with the organisation.
Getting people involved into ad-hoc volunteering positions is an important step in increasing their perception of value.
How do you need to treat new members differently in order to create that perception of that value? Take a moment to consider the trust continuum for your organisation. Map out the process you use to engage people within your organisation. Is it sufficient to bring each member into your community?
9. Implement processes to ensure the above happens consistently.
Effectively recruiting and retaining members is a process. Like any processes, if you can streamline and ensure that every part works together smoothly then you will maximize the return from your efforts. The result should make the pathway to membership a very natural, easy process.
The membership machine model in the attached document illustrates the six basic steps to effectively recruiting and retaining members. It is important that you address each of these stages, and the links between them, carefully to ensure immediate and continuing growth.
- Lead Generation – The process you use to generate, qualify, capture and classify membership leads.
- Prospect Relationship Management – A structured process for building trust and credibility amongst prospective members.
- Sales Process – The mechanisms, activities and tools you use to convert a non-member to a member.
- New Member Integration Process – The process you use to assimilate new members into the greater membership pool.
- Member Relationship Management – The process you use to maintain a relationship with existing members. This is mainly concerned with maintaining the perception that they are better off as members than as non-members.
- Renewal Process – The process you use to renew members.
In the same way that one missing cog can affect the output of a large machine, one small task done ineffectively can affect your entire member recruitment and retention process.
Your membership machine needs to be carefully designed and constructed piece by piece.
You need to find the best way for all the small jobs that need to be completed to fit together to minimise loss of opportunities or wastage of funds.
You should be able to map the progress of a lead through your system with ease – knowing exactly what will happen from the moment the lead enters the system until it eventually leaves the system.
If you can’t do this it is not a matter of whether you are losing members, but a matter of how many you are losing.
Consider your member recruitment and retention activities. Divide them up into the six headings above. Are there any gaps that need filling? Where are the opportunities to improve your performance?
Finally ...
A recession represents a golden opportunity to associations to be the "solution" to the challenges that their members are facing in tough economic times. If the above tools are implemented correctly then you may find the recession to produces some of your strongest membership growth ever.
