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Direct Mail is the Foundation for Effective Membership Marketing
As we deploy new and exciting marketing channels, it is often good to step back to be sure that we are not forgetting about the tried and true performers. That’s why I found an article by Kevin Mills, the Director of Membership for the National Legal Defense Association, a good reminder.
In the April issue of Marketing Advents, Mills wrote a piece titled, Direct Mail: The Foundation for Marketing Success. “With more than 15 years of experience developing marketing strategies to increase membership and member benefits,” Mills says, “I have the most confidence in direct mail … Direct mail provides legitimacy to our organization and its cause, and provides the vehicle for email and social media campaigns to be successful. Again, using other marketing tools is obviously a necessity in today’s technology-driven culture. But, in laying the foundation for marketing success, the results are best when we put together a comprehensive marketing strategy that begins with direct mail.”
He adds “that even our younger customers are responding to our direct mail efforts.”
Mills conclusions were confirmed in the results from the soon to be released 2013 Membership Marketing Benchmarking Report. Organizations that used direct mail in renewal efforts were more likely to have renewal rates of over 80%, have increased membership in the past year, and have increased or maintained their annual renewal rates. Additionally associations with 20,000 or more members affirmed that direct mail was their single most effective marketing channel for membership recruitment.
What’s the bottom line? In my experience, working with nearly 100 individual and trade associations over the years, direct mail remains an effective and scalable channel to help organizations get and keep members. Used properly, it is highly targetable, track able, and affordable. If it is not in your marketing portfolio of tools, it probably should be given a try.
Getting A Membership or Customer Relationship Started
In the membership marketing world, there is a lot of conversation about engagement and customer relationship management. These are great conversations. However, to make any of these relational concepts work, you first have to have a name and address in your database! And that is where the challenge lies for many associations.
Where do you find the names and contact information for top prospects with whom to begin to engage and build a long term membership or customer relationship?
For an increasing number of membership organizations one source is using online solutions including search engine marketing (SEM), targeted social media ads, ad networks, and other tools to offer free information that invites prospects to raise their hand and request your content in exchange for their name, address, email and an opt-in for you to continue interacting with them.
When a prospect searches for your information, finds material provided by you, and requests follow up, they identify themselves as excellent candidates to join. You are offering your valuable content in exchange for the inquirers valuable contact information.
Here are some examples of effective free information offers that encourage the exchange of contact information for content:
1. A free whitepaper with a compelling title and useful information
2. A free webinar offering continuing education
3. A registration for a private social network
4. A free organizational or industry e-newsletter
When someone responds to the free information ad, they are directed to a microsite that is designed to reinforce the value of the free content and collect the prospects information. Once the form is submitted, a follow up email fulfills the offer and the membership cultivation or engagement process can proceed.
Sample MGI Lead Caputre Microsite
One of the additional advantages of online lead generation is how measurable it can be. From the initial click to the final join each step the prospect takes can be tracked through the process. Effectively the fingerprints of the prospect are left each step along the way from the ad that was initially clicked, to the follow up emails, to the submission of a member application.
Please let me know if you would like to see more examples of how associations are putting these online tools to work to start relationships with potential customers and members.
Early Benchmarking Results Confirm Continued Growth in Association Membership Counts
As we begin to analyze the survey returns for the 2013 Membership Marketing Benchmarking Report, results show that there continues to be growth in the membership counts for participating associations.
Over 690 associations participated in the research and of those 361 (52 percent) reported that they have an increase in their membership over the past year. This is the second year in a row that the majority of participants reported membership growth and continues the positive trend from the low point of only 36 percent of associations reporting membership growth in 2010.
Interestingly, organizations with larger memberships reported higher growth for the past year. In fact, 60 percent of associations with memberships greater than 20,000 said that they saw growth this past year. While only 50 percent of associations with less than 1,000 members saw growth.
The final report will be released in several months and participating associations will receive a printed edition of the complete report.
Participate in the 2013 Membership Marketing Benchmarking Research
The opportunity to participate in the 2013 Membership Marketing Benchmarking Report is coming to a close. So if you are a membership professional, I wanted to provide this last chance to take part in this year’s research.
If you received an email invitation to participate, please use the link provided in the email to access the survey. If not, you can use this link to fill out the survey.
Last year over 700 membership organizations took part in this research. Our hope is to increase the quantity of participants this year in order to provide analysis with even finer segmentation than in the past.
Of course I will report many of the findings from our research here on the blog. But for those who complete the survey, we will send a free printed copy of the final, full report.
I look forward to sharing with you the outcomes from this year’s research. Thanks in advance or being a part of the 2013 Membership Marketing Benchmarking Report.
Please take a moment to complete the survey now while you are thinking about it.
Do You Budget for Membership Marketing based on the Cost of the Seeds or on the Expected Harvest?
Recently I was interviewed for an upcoming article on association membership in CEO Update. The writer asked me, “What do you think is biggest mistake that organizations make in the membership marketing?”
I shared with him that for me the answer is pretty simple. Most membership organizations under invest in getting new members. The basic mistake that many membership organizations make is that they under estimate the cost of acquiring a new member and they overlook the lifetime value that a new member can deliver to the organization. Their budgets are built backwards.
An organization determines how much they want to spend and then asks the membership staff to use it in the best way possible.
But the correct question should not be how much you are allowed to spend, but how much you can generate in revenue for the organization. In other words, base budgets on the harvest, not on the cost of the seeds.
It is not uncommon for me to meet with organizations that have very lofty plans on how many new members they want to add. When I ask them what they have budgeted to accomplish this, the answer is shockingly low.
One recent group I spoke with, for example, wanted to stem their decade’s long membership decline by developing a marketing campaign to recruit an additional 3,000 members over the next year at a dues rate of $65 each. However, they only budgeted $30,000 to accomplish this goal or $10 per new member. Unless they discover a marketing silver bullet, it is unlikely that they will accomplish their membership goal.
At the same time, members in this organization typically stay for four years. So from the members that they acquire, they will realize an income stream from each new member who joins of $260 plus any revenue from non-dues purchases. Assuming that they have incremental servicing costs of $15 per member, per year, a new member represents a $200 net revenue stream for the organization.
How much should an organization be willing to spend for a new member in order to produce $200 in net revenue? They should be willing to spend more than $10.
Seven Opportunities to Increase New Member Recruitment
Where do you start if your executive director or board tells you that they want to increase the number of brand new members coming into your association?
Usually it is best to look at a broad array of options first and then narrow down to what fits your situation the best. Here are seven strategic opportunities to explore in order to increase your new member recruitment efforts.
1. Enhance the Value of Membership — Finding a need and meeting it is the foundation of marketing. If you can provide an indispensible new product or service as part of your membership offering, you will increase the response to your current promotions.
2. Deploy Market Penetration Pricing – Price is one of the four P’s of marketing, so it is a legitimate and useful tool to explore. To grow the number of new members at a rapid rate, a sharp decrease in the price can be effective.
3. Increase Volume (Quantity) of Recruitment Efforts – From my observation, many membership organizations under budget and do not reach deep enough into their markets for potential members. If you have strong returns from your recruitment efforts, you probably are not reaching out aggressively enough and are not at your full market potential.
4. Add New Marketing Channels – Many organizations get locked into one or two marketing channels like email or sales calls and forget about other options like direct mail, telemarketing, and online. When integrated into one campaign a combination of channels can be particularly effective.
5. Test New Lists, Offers, and Creative – Without regular testing of new lists, special offers, and new messages and graphics, a membership recruitment program is sub-optimized.
6. Expand to Related or Ancillary Markets – Thinking creatively about what other market segments might be appropriate for your membership offer can help to jump start recruitment. This is known as a market expansion strategy.
7. Increase the Frequency of Touches to Top Prospects – For almost every organization, there is a core of prospective members who respond at a very high rate. Aggressive membership marketers reach out to these prospects much more frequently over the course of a year and see strong returns.
Each of these strategies has its strengths and weaknesses. For example, lowing prices or reaching new markets can potentially negatively impact renewal rates. However, if the overall membership is growing at a faster pace, then these changes may make good sense.
If increasing new member recruitment is your goal, I encourage you to step back and look at these options. One of them or some combination of them is likely to be the solution that helps advance your membership.
