Renewals Best Practices
Past issues of the MGI Tipster have discussed at some length the five stages of the MGI Membership Lifecycle, (See MGI Tipster Volume 9, #8-12, and Volume 10 #1-2.) In their proper order they are: awareness, when prospective members learn about your organization; recruitment, when prospects are converted to membership; engagement, when an association works to cement the member relationship; renewal, when current members decide whether to continue or cancel; and reinstatement, when former members are recruited anew. We will examine renewal programs in some detail in both this and the December edition of the MGI Tipster.
The Importance of Renewals
Renewals are a vital component of an association’s lifeblood. They are very often the primary income generator and it’s critical that the renewal system be consistent, on time, accurate, and appropriate. By appropriate we mean that it best suits the association’s membership design. Here are the most important factors that come into play.
Perhaps the most common reason members do not renew—other than a breakdown in the value equation—is that they simply forget. That should be kept in mind when designing a renewal program’s timing and messaging. Membership marketers also know that retaining current members is a much less expensive investment than acquiring new ones, and because renewals are such an important revenue source, it is important to put in place the strongest and most successful renewal program possible.
Marketing General Incorporated manages many association renewal programs for various clients. While each has its nuances based on the renewal cycle, number of members, database limitations, and available investment, there are commonalities that we can share with our readers.
The Appropriate Plan
How many renewals touches should there be? Marketers should test various combinations of email, mail, and phone renewal messages to discover which works best. Say the renewal series includes seven touches, but it could easily be more.
Email is less expensive than regular mail, so the renewal message series should begin with it, move on to regular mail notices, and end with a phone call, the most expensive channel. The final communication may link to an online survey to discover reasons some members do not renew.
It might begin with an email to members three months before their expiration month. If they are going to work at all, email renewal notices usually generate a response (whether opening the email, clicking on a link, or renewing) within 48 hours. For this reason, including an email early in the renewal cycle may reduce the need for additional and more costly channels.
If they do not renew from this email, both email and mail notices may follow up at two months, and again at one month before the expiration month. Then send another mailed notice in the month of expiration.
Mailed notices can be sent each month, while phone calls are effective to “bring back” members who are past their renewal dates. Phone calls can be used after expiration to reach members who have still not responded. By analyzing response rates from each renewal touch, marketers can eliminate messages with low response rates and increase messaging in channels that perform strongly.
Messaging and Database
Effective renewal programs and the individual messages within them rely heavily on an accurate and up-to-date membership database. An organization’s credibility and attention to detail is on display when members receive their renewal notices, so all information should be accurate. At the same time, renewing members should be given the opportunity to correct inaccuracies in their records.
Keep the message simple and relevant. Include the date the membership will expire, the cost of renewal dues, how to renew (phone, fax, email, mail, or web), and the benefits that will be lost if the member does not renew. Renewal notices can remind members of the value of their benefits over the past year. Personalization of members’ renewal notices can include savings on purchases, continuing education credit, and annual meeting registration discounts.
However, marketers should resist the urge to add additional materials to renewal notices. No surveys, no annual meeting information, no offers to buy books. As tempting as it may be to save postage by packing the renewal envelope, these additional components only serve to dilute the most important message—Renew Now.
In the December issue of the MGI Tipster, we will review more of the fundamental considerations for successful renewal programs.
If you would like to learn more about renewals and the best practices for implementing them, contact Rick Whelan, MGI’s President, at 703.706.0350 or firstname.lastname@example.org.