A Membership Marketing Diagnostic Tool

Last month was really busy. I met with many organizations that have cut budgets over the last couple of years.  They are now realizing that there is very little else to cut and they need to grow membership.

And it is sad to say that some of them do not realize just how much trouble they may be in going forward.

When I meet with groups, I use a simple method to calculate where their membership is headed given their current metrics. It is called a Steady State Analysis.

Using your current data, you can also do this analysis to see what the ultimate equilibrium of your association membership count will be. You can also use the analysis to model where it might be if you add more new members or have higher renewals.

To do the calculation, you only need two numbers; your renewal rate and your total new member input from the past year. Here is how it works. You take your new member input from the past year and divide it by your lapse rate presented as a decimal. So if your renewal rate is 80%, then your lapse rate is 20% or .20.

For example, 20,000 New Member Input / .25 Lapse Rate = 80,000 Steady State Total Membership.

Here is the formula: Annual New Member Input / Reciprocal of Renewal Rate (or Lapse Rate) Shown as a Decimal = Total Membership Steady State.

Here are three examples of how you can project your future membership.

• A 75% renewal rate and 8,000 new members per year will result in a steady state membership of 32,000 members
• An 85% renewal rate and 2,000 new members per year will result in a steady state membership of 13,333 members
• An 80% renewal rate with 5,000 new members per year will result in a steady state membership of 25,000 members

In addition to using this tool to determine where your membership is headed now, you can also use it for project “what if” scenarios.  This can help you determine the best strategy going forward.

One other thought to consider. From my personal observation, the organizations that I am seeing in the most distress are those that pulled back from marketing over the past couple of years. Groups that continued to aggressively market membership actually came through in much better shape.

However, it is not too late to get your membership growing again.  Please let me know if you would like help in looking at the membership marketing options that might fit your organization.  You can send me an email at Tony@MarketingGeneral.com.

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