Evaluating and Strengthening Your Value Proposition
By Jason Gudenius,
It’s all about Value
If you don’t understand the importance and the power of Value then you’re probably having trouble growing your membership. But you’re excused: value can be tricky to understand because it’s a perception, something we feel and experience in a personal way, and value can be very different for different people. So let’s try to define it.
For associations, a simple definition might be: membership value is the price members are willing to pay. If they join, renew, or buy things, they presumably found value; if they don’t, for them value wasn’t there. Even though it’s difficult to define, we can measure value.
How strong is your value proposition?
In the business of associations, members ultimately vote with their wallets whether they believe an organization has value. The value they believe you deliver is their interpretation of the Value Proposition—what the association presents as its definition of value along with the actual experience the member receives. If members continue to pay dues, attend events, and purchase products and services, they have found value and agree with the organization’s value proposition. If they don’t participate in organization offerings, it’s pretty certain they have not found value and don’t accept the association’s value proposition.
There is no single indicator of what value may be but there are two ways to evaluate how members feel about value—market research and data analytics.
Market Research: What people tell you they value
Whether qualitative or quantitative, market research can be an excellent tool to evaluate value. Researchers ask members, prospects, and former members to tell them what they believe is valuable or how valuable they find a specific benefit, product, or service. Whether conducted through email surveys, online forums, in-person focus groups, executive interviews, or a combination, market research is a tool that asks people what they think and what they think about value.
Here are examples of questions market researchers may ask to gain insight into member acceptance of the value proposition:
- What are the principal reasons you joined this association?
- What do you value most about this association’s membership?
- What does this association provide that you find nowhere else?
- What makes this membership stand out among others?
- How does this membership compare to other associations you have joined?
- How has this membership helped your career?
- What are the reasons you allowed this membership to lapse?
- What would enhance the value of this membership?
- What specific elements of this membership are most important?
- How well is this membership delivering on the benefits you want?
Data analytics: What people actually use and how they behave
The flip side of the value analysis coin is to understand your data. Members and prospects continually leave fingerprints—traces of indicative information about their interactions with their organization. In an ideal world, you want to be able to look across all of your data to see exactly what members are using and how that relates to positive outcomes.
But your depth of analysis depends on your organization’s available data. Whatever the size, the organization should have basic data points to conduct at least a rudimentary analysis. If you are beyond the basics, you can use deeper analytics to guide strategic decisions and drive better results. These are just some examples of the degrees of applied data analysis:
- Basic: Overall renewal rates by member type – High renewal levels are a clear sign that your organization has elevated perceived value. Most associations experience wildly different renewal rates across member types. Analyze those renewal rates to see who is receiving value and who is not.
- Basic: First-year renewal rates by member type – First year members are dating the organization and haven’t yet agreed to a marriage—they are deciding whether to commit to the relationship. First-year renewals give insight into how new members value membership and, when measured continuously over time, can provide insight into needed additions or modifications to improve your onboarding and retention programs.
- Enhanced: Key performance indicator analysis – For each member group, look across all member touch points to see which activities have strong correlations to member renewals. If a specific benefit and the frequency of use can be tied to stronger renewals, you’ve found guidance for your retention and engagement programs. You’ve also pinpointed specific value areas within the membership.
- Enhanced: Prospect communication interaction qualification – If you have e-newsletters and other email or web based communications with non-members you may discover relationships between the prospects with whom you communicate and those that choose to join. Looking backwards at your electronic pathways to membership may reveal signals when prospects are more likely to join. Information like that enables far more effective acquisition targeting.
- Enhanced: Total membership profile – Interested in knowing who are your most and least valuable members, your most favorable member demographics, and most common engagement methods? A combination of RFM analysis and non-monetary behavioral data can paint a clearer picture of your membership that can be extremely valuable.
Every data analytics project is only as accurate and comprehensive as the quality of the input information. It really pays off to examine how your information is collected and to check your data integrity regularly.
This edition of the MGI Tipster is meant to be a starting point on the road to better define and measure your organization’s value. If you’d like to speak with us about ways that research and data analytics can help you identify your value proposition and put it to work for you, contact MGI Account Director Jason Gudenius at email@example.com or call him at 703.706.0392.