The continued steady recovery of association membership headlines the findings in the 2013 Membership Marketing Benchmarking Report, the fifth annual survey of leading association indicators conducted by Marketing General Incorporated.

New membership

This year’s benchmarking survey found that 63 percent—almost two-thirds—of the associations sampled reported new member growth, which is a significant improvement from the 42 percent reporting new member growth at the depth of the recession in 2010.

Total membership

More than half—52 percent—of the associations surveyed said their total membership grew in the past year while far fewer—31 percent—reported declines. When the association sector bottomed out in 2010, just 36 percent were adding new members while 48 percent were losing them.

Most membership organizations use three key indicators to measure trends in their overall health: total membership, new members acquired, and members renewed. This data helps gauge performance compared to the industry as a whole as well as identify areas of strength and weakness in their membership marketing efforts.

This year, 695 membership organizations participated in the benchmarking survey, the only study of its kind to examine the practices associations commonly use to recruit new members, retain current ones, and reinstate those who have lapsed.

Renewing membership

If there is a weakness in association health revealed by the survey it lies in renewals. Just 35 percent of the associations polled reported improved renewal rates in 2013. That is just slightly higher than the 31 percent of associations that saw their renewing members decline this year.

This year’s 35 percent renewal rate is a marked improvement over 2010 when just 21 percent of associations surveyed reported increased renewals. At the height of the recession in 2010, 44 percent of associations saw their renewal rates drop.

As the economy recovered, renewal declines were half that—24 percent in 2011 and 22 percent 2012. This year’s 2013 survey found that associations with declining renewals jumped up to 31 percent, the same level as in 2009.

The majority of renewal rates are healthy

There was some improvement in association economic health as evidenced by the strong majority of associations—68%—that reported their renewal rates at 80 percent or higher while only half as many—32%—reported renewal rates below 80 percent. The mean renewal rate for participating associations is about 81 percent.

Impediments to association growth

Asked in this year’s survey about obstacles to membership growth, respondents selected these as the top three: (1) Insufficient staff; (2) Difficulty attracting and/or maintaining younger members; and (3) Perception of the association and/or its culture.

These largely mirrored the 2012 responses, except that in 2012 “Membership too diverse” was the issue most cited, while in 2013 it fell out of the top three to fourth place.

Most important goals

When respondents were asked their association’s most important membership goals, an equal percentage—74%—cited “increasing member engagement” and “increasing both membership acquisition and retention.”

Want to learn more?

MGI makes the annual benchmarking report freely available in print and online for the benefit of the greater association community. To download a copy, visit the web at www.MarketingGeneral.com.

• Who are your most valuable members and customers?
• Which engagement activities are tied to higher renewal rates?
• Your renewal rates by member type, segment, and tenure?

Would you like answers but can’t get them because data is spread across databases and formats? Well, you are not alone. Your first task is to review, condition, organize, and connect files using relational databases. Once completed, data analytics becomes a very real and important management opportunity.

Data analytics begets business intelligence

Data analytics is the process of collecting information and applying proper analysis so that it reveals new insights that we call business intelligence. In the case of association member development, business intelligence is used to develop a crisper and more useful picture of the characteristics of those who interact with the organization. That is essential data when optimizing membership marketing programs and designing engagement programs that are best suited to the members.

Understand where you are to plan where you want to go

Data analytics can be used to uncover the predictive indicators needed to accelerate membership growth and product sales. Knowing the demographic and behavioral characteristics of an organization’s most valued members and customers enables association marketers to identify stronger prospects early on, recognize engagement needs by specific variables, and improve retention programs to keep more members year after year.

The first step toward improved recruitment is building up-to-date member profiles using recency, frequency, and monetary value—analysis across membership, conference, and product databases. This identifies:

• Clusters within databases that rank members and customers from best to those at-risk
• Customer rankings by potential to generate revenue
• Average lifetime value of customers and members
• Meaningful relationships linking member and customer characteristics to revenue generation
• Spending patterns both in total and by member and customer segments

Start digging … you may be surprised by what you find

One organization discovered a member who was spending more than $500,000 a year on products, but was being treated the same way as someone who bought a $10 report. Experiences such as this beg the questions:

• Should a staffer be dedicated to this member or their organization as a concierge level service?
• What are additional product needs?
• Why does this member buy? What is your value proposition—through their eyes?
• And finally, should there be an acquisition strategy that targets prospects that have the potential to become such revenue gold mines?

Put your knowledge to good use

Once an association has identified “best” members, it should examine behavior to find common group characteristics that set this group apart. Then, use this knowledge to seek out new prospects that fit that profile. Understanding who top customers are can be leveraged in several ways:

• If revenue growth is a target, one may plan highly targeted acquisition campaigns that would seek out only prospects that are the most likely to become an organization’s best revenue-generating members. In this scenario, the return on investment will be maximized, as only potentially profitable members will be acquired.
• If member growth is a target, cut out the bottom-of-the-barrel prospects that are least likely to respond. The dollars saved can be returned to the acquisition bucket to mail more of the better prospects more frequently. In other words, the less revenue-generating potential a prospect has, the less money should be spent to acquire him or her.

Consolidate and integrate

Associations that have identified their best customers often fail to examine the big picture; that is, how to best integrate all membership, product sales, conference marketing, training, webinars, magazine subscriptions, and so forth.

Data analytics gives associations the capability to convert information into actionable knowledge. Membership, product sales, and conference marketing divisions should not be treated as separate revenue sources. Instead, members and customers should be monitored as they go through the association’s programs at every stage of the Membership Lifecycle. Integrating all available information through data analytics is a reliable way to identify the true problems and opportunities within an organization.

Want to learn more?

By their very nature—and as a matter of survival—associations should continually reexamine their recruitment and retention procedures, study their histories, and apply the lessons learned to improve their membership marketing practices in the future.

Consistent measurements, most often monthly, of several stages of the Membership Lifecycle help keep an organization focused on the areas that need attention and not be distracted by those that don’t.

Enter the Membership Dashboard

The Membership Dashboard is a proven, simple to use marketing tool that highlights key membership characteristics and tracks growth with sufficient detail to be actionable. The Dashboard reveals trends, exposes strengths and weaknesses at key points in member tenure, and can be a valuable guide for an organization’s future marketing efforts.

All that the Dashboard requires is the steady, consistent collection of accurate data to produce knowledge that most membership organizations consider essential.

Data input

Here are the components of the dashboard, the information you will need to enter:

• Total Membership – Current Membership in all categories of the association collected month-by-month and compared to membership month-by-month in the previous year.
• New Members by month – Current New Members compared to new members the same month the year before.
• Membership Conversion by month – First year members who are eligible to renew are called “conversions,” because it is the critical moment in membership when fledgling members decide whether to stay or leave. For most organizations, first year members are the most likely cohort not to continue. Using the Dashboard, these new memberships are compared month-by-month to first year members in earlier years to see how they are trending. This is calculated by: renewing new members / eligible to renew new members.
• Year Two and subsequent renewals (Y2+) by month – Y2+ members eligible to renew are compared to Y2+ members who actually do renew. This is calculated by: Y2+ renewing members / members eligible to renew to measure year two retention rates.
• Total Renewals by month – Total members eligible to renew vs. total members who actually do renew to measure total retention rates.

The Dashboard design

The membership dashboard’s layout is straightforward. Columns list the months and rows contain the collected data that is entered into the dashboard. Some cells contain formulas that calculate percentages of change for the user which should not be overwritten.

The charts beneath the Dashboard itself use graphics to summarize and illustrate the data, giving managers a better perspective on trends that are tracked by this management tool.

Membership Types

Associations with several membership levels or types are able to use the Dashboard’s detail to aggregate membership statistics in the uppermost tab of the spreadsheet. Users may also add additional spreadsheet tabs to accommodate additional membership categories.

Once the Dashboard is in place, the Dashboard can identify if an association is “holding” or “leaking” members and at what stage it’s happening. The Dashboard can help pinpoint where within the Membership Lifecycle the association is growing or not growing, whether it is because new member input is up or down or because of good or bad retention rates.

Takeaways

It is said that history repeats itself; however, those who don’t keep records will never know if it does or not. Planning for the future is difficult enough; without a notion of what was and what is, it’s almost impossible to predict what will be.

The Membership Dashboard serves marketers well, bringing to light strengths and places where attention is needed.

Download the Dashboard

Go to http://www.marketinggeneral.com/downloads/MGI-Membership-Dashboard-Sample-2.0.xlsx to retrieve your copy of the Membership Dashboard. It is in an Excel format.

It’s a common perception that the largest and savviest associations do it best. In fact, with proper guidance almost any membership organization can do it, too: Develop highly productive and lucrative corporate partnerships that enhance the corporation’s image and expand the benefits an organization is able to offer. Many associations relegate sponsorships to single items such as a logo on a convention tote or lanyard. Strategic partnerships, on the other hand, coordinate sponsorships across the entire organization to deliver far more valuable results for both sponsor and association. Partnership activities can be scheduled to drive both revenue growth and cash flow throughout the year rather than be limited to an annual event.

The March 21st ASAE Alexandria Brown Bag Luncheon will present a case study on how the National Business Officers Association turned an average performing sponsorship program into a highly successful and profitable corporate partnership that increased revenue by 45 percent. The noon session at MGI’s J. Scott McBride Education Center is free and open to the public. Preregistration is required.

The value exchange

Many corporations want to be seen as trusted partners who help organizations support their missions, as long as both receive value from the relationship. Unfortunately, many associations don’t maximize the potential of a corporate relationship because they may not fully understand how partnerships work.

The equation is fairly simple: corporations want exposure; organizations want non-dues revenue. The knack is to design ways that do both.

Partnership potential

Consider: Of 100 conference exhibitors, it’s highly likely that ten have the resources to invest further if they see value in it. That’s not an unmanageable number and certainly justifies trying to lift the all-too-common exhibit sales business model to a more productive level.

Partner aspirations

Let’s understand what sponsors want:

• To be acknowledged as strategic partners who support education and mission-driven initiatives
• To gain prestige, visibility, and preferred yet reasonable access to members
• To become valued partners recognized for their investments in shared goals

To make this happen, association executives must commit to a new paradigm: mission-focused business development. That means stepping beyond the meetings department’s tote bags and lanyards to a broader program that meets sponsors’ aspirations to “be, gain, and become” true partners.

5 steps to partnership

This is the path to building relationships, starting with the hardest first.

1. The silo mentality must go

Breaking down walls among organization leaders may be the most difficult of the five steps. The silo mentality is the all too common tendency by association departments to wall themselves off from other departments to protect their own turf and meet their narrowly defined revenue goals.

Cross departmental planning and collaborative execution is essential to succeed with corporate partners, and a membership organization won’t succeed if it’s locked into the silo mentality.

2. Plan and bundle by topic

Corporations align with the organization’s mission by topic, not by the silos they have created. Identify all products and services by topic or product line across the entire organization, particularly the three heavyweight departments—education, publications, and meetings. Next, segment them by area of interest or field of study. Then, assign to each subject the appropriate education tracks, publication themes, meeting topics, seminar subjects, and so forth.

3. Select appropriate prospects

Next, design customized proposals for each of the topics and invite prospective partners to participate. This gives sponsors the opportunity to associate with an array of member products and services throughout the organization throughout the year. Because they will receive far broader exposure than before, they can be asked to invest at appropriately higher levels.

4. The Corporate Circle

This is an important component in corporate sponsorship development because it establishes goals, creates incentives, and rewards the most active partners. Creating a priority point system enables the association to steer investments to areas such as education and scholarships, activities the organization considers priorities. A Corporate Circle of supporters also holds tremendous cachet.

Marquee benefits often include high profile house ads thanking the Corporate Circle, VIP invitations to board events, and private briefings with the president and the board chair.

5. Visit your Top 10

Armed with an integrated proposal and a path to the Corporate Circle, an association has fresh reasons to visit its top 10 most likely corporate prospects. Organizations become more attractive to sponsors who can “be, gain, and become” good corporate citizens whose investment—and return on investment—is greater than before. Time and again, they find the partner extremely impressed with the ability to design and present a year round package to them.

The voice of experience

The National Business Officers Association (NBOA) implemented these five steps for a corporate partnership model with considerable success. Executive Director Jeff Shields, FASAE, championed the initiative.

“We very quickly realized a 45 percent increase in non-dues revenue. The revenue is crucial, but even more appreciated was the letter we received from a small institution that was able to enroll in NBOA thanks to a scholarship funded by a corporate partner. The school was thrilled to receive the member benefits and the sponsor was proud to be elevated to the NBOA Corporate Circle because of their scholarship funding. That’s a win-win if ever there was one.”

A final word

Jeff Shields will be joined by MGI Sponsorship Strategies Consultant Brent Mundt to present the NBOA case study at the March 21st ASAE Alexandria Brown Luncheon at 12 noon held at MGI’s J. Scott McBride Education Center on the fourth floor, 625 North Washington Street. Anyone interested may attend. Preregistration is required. ASAE members can earn CAE credit. Arrive at 11:30 a.m. to network.

The case study will also be presented at a Learning Lab at ASAE in Atlanta this August.

There is a four-step progression that elevates an association from listing the features it offers to something far more valuable— providing emotional need. Each step along the way adds impact and brings a deeper and more lasting connection between members and what their association offers.

When marketers promote their organization, the Value Identification Grid (outlined below) is a great tool for refining features from items on a list to drivers of emotional needs.

Aspirations

Let’s step back a moment to review what it is that people want. Many studies have described the core human drivers, and here is a convenient way to look at them:

• People want to be: up to date, efficient, good at what they do, promoted
• People want to gain: time, comfort, respect
• People want to avoid: discomfort, worry, embarrassment
• People want to become: satisfied, wanted, the best

Our job as marketers is to convince prospects how the “things” an organization offers can be redefined to reflect people’s aspirations to “be, gain, avoid, and become.”

The Value Progression

There is a logical four-step sequence that moves us from everyday features to higher aspirations. It progresses from feature to benefit, benefit to value, and value to emotion.

Here are definitions and examples of each of the four steps:

1. Feature: what an organization offers, tangible and intangible—a newsletter or an education course.
2. Benefit: what a member receives from the features and how it helps fulfill needs—knowledge from a newsletter or education from a course of study.
3. Value: what a member interprets as the return on investment—was the cost worth the price?—knowledge from a newsletter or education from a study course may give the member something concrete … a promotion, a better job, a higher salary.
4. Emotional Drivers: how the value gained satisfies one or more basic human needs—a promotion or new job with a higher salary, for example, may fulfill an inner need for increased self-worth and respect of others.

Here is how these four steps are connected to use them as a marketing tool.

The Value Identification Grid

The Value Identification Grid is a way to structure the value progression. The grid shows the four steps, and this example uses three rows, but list as many as you need.

Features

Complete this column first because the others build upon it. Make a listing of all the goods and services your organization offers. Continuing education is our example of a feature, but you may want to add certification programs, advocacy, conferences and meetings, magazines, discounts, and so on.

Benefits

This column takes the features to the next level by personalizing them and speaking to what people want rather than what the organization gives. Benefits are far more robust, more personal, and more powerful motivators than features.

The two benefits in our example speak to what continuing education does for people: it keeps them up-to-date and satisfies licensing requirements. You may have additional benefits to add to the list.

Value

Value is part of the mental equation most of us use to judge the utility of a purchase, such as membership. If a feature turns out to be a benefit so worthwhile that it’s valuable, then promoting the value of an organization’s benefit is more effective than just the benefit.

In our example, benefits do more than keep people up to date: they may enable us to do our jobs better, perhaps leading to a job promotion.

Emotional Drivers

The final step links the original feature to an emotional response. Beyond value, the benefit affects how we feel about ourselves and life, such as feelings of increased confidence and self-worth.

And so we have effectively repositioned the feature—continuing education—to a valuable benefit that can satisfy human aspirations, such as the desire for success and prestige.

Application

Compare these two sentences and how much more compelling is the appeal to an emotional driver rather than a simple feature.

When you join the association, as a member you’ll be eligible for continuing education courses for just $59 per credit.

OR …

Our continuing education programs will increase your understanding and elevate your skills, building on your experience and perhaps taking your career to the next level—all for just $59 per credit.

The Takeaway

Use the Value Identification Grid to move what your organization offers through the four-step process from everyday descriptions of features to copy that is more engaging, informative, and persuasive because it focuses on emotion and need.

Want to Know More?

To help with this process, we have created an easy to use tool that incorporates the key coordinates that go into creating an effective marketing plan. We call it the “Marketing Strategy Development Matrix.”

What the Marketing Strategy Development Matrix does

The matrix helps to visually connect each market segment that you are attempting to reach with the proper marketing components: channels, value proposition, special offers, messages or evidence for your claims and frequency of contact.

The matrix is an excellent tool to facilitate planning and brainstorming sessions to help ensure that you have all of these connections adequately thought through for your plan. Here is the matrix:
Constructing the triangle matrix

To use this tool, begin by inserting your market segments in the left hand triangle, from the most productive at the top to the least productive at the bottom. Typically, your best market segments are smaller and your untapped segments are much larger, hence the triangular shape of the market matrix.

Along with the name that you assign for each market segment, you can also allot an estimated quantity of prospects to each group.

Constructing the rectangular matrix

Once you have defined your market segments, work through the rectangular matrix on the right hand side, first defining the channels you want to use—telemarketing, direct mail, email, SEM, etc.

Next, define your value proposition for each group. Essentially, this is your unique promise to a particular audience. Use the next column to include a special offer to one or more segments that encourages prospects to act now.

Then, in the second to last column, you select the particular message you want to communicate to each segment to provide proof of your promise. And finally, you want to determine the frequency and timing of your promotions.

Implementing the matrix

So, if you are creating a plan for membership recruitment, your best market segment might be former or lapsed members. Because they are so responsive, you can afford to spend more on marketing to them using multiple channels that are more costly and perhaps require more staff time to reach them. You might put staff phone calls, direct mail, and email as the channels for the uppermost segment.

The value proposition, offer, message, and frequency of contact for each segment will be different depending upon the segment’s awareness of or affinity for your organization.

Once you have completed filling in each quadrant of the matrix, you have the framework for creating your marketing plan. There is space for six market segments in the matrix, but you obviously may include more or less in your plan.

Want an electronic version of the Strategy Matrix?

Done well, awards ceremonies and proper recognition can be expensive. But too often they are underfunded because of an inadequate sponsorship program.

Awards are valuable both to sponsors and the organizations they support. The positioning a sponsor company shares when associated with an “award” or “excellence” is by and large the gold standard of sponsorship.

That’s why it’s so important that associations develop the know-how to attract sponsors and forge partnerships that enable the organization’s awards program to expand and excel.

How does an association do that? It begins by answering five important questions about how deeply a sponsor invests in and becomes engaged with an awards program.

1. How much visibility to give a sponsor?

This is a crucial evaluation. The key is never to base sponsorship fees on cost; rather, base the fees on value and visibility.

A sponsoring company representative can simply be a guest at an awards ceremony; or be recognized onstage before the attendees; or be allowed to address the audience. Each is more valuable and is earned by an increasing level of sponsor support. If the company logo appears during the ceremony, that’s an even bigger sponsor benefit.

2. What exposure is offered before and after the award?

Added exposure can play a large part in setting appropriate sponsorship levels and the investment each requires. It may include mention in a few or in many member communications, from announcements to applications, from nominations to a place on the website, from pre-publicity to post announcement thanks. Each has a tangible value.

Media channels often communicate with broad audiences beyond membership and those who actually attend an awards ceremony. Extended reach has value, too.

3. Can naming rights be offered as well?

There is a familiar saying that the most important attribute of success is “location, location, location!” The same is true of sponsor naming rights. For instance, the “Bluebird Excellence Award Sponsored by Acme Bird Seed” is worth a lot to Acme Bird Seed. But “The National Bluebird Association’s Acme Bird Seed Award for Excellence” is worth a lot more. Here, value is determined in part by “position, position, position.”

4. Can reach be extended to larger audiences?

A sponsorship can appreciate in value when an organization can guarantee that chapters and affiliated organizations will publicize the award news and include a sponsor mention. Press releases to the general media that include sponsor recognition are another way to increase value.

5. Can association sponsorships be bundled?

The opportunity to expand the number and value of sponsorships occurs when an association can break down barriers among an organization’s departments. It doesn’t matter whether an awards program is developed by the education or the membership department. What matters is the depth and breadth of the sponsorship.

The Audit – And be Honest

The answers can be found in a truthful, introspective review of existing communications, from a high level perspective down to the smallest details. A thorough examination includes every aspect of what an organization says and how it says it … logo and tagline, stationery and newsletters, flyers and display ads, annual meeting materials and editorial style, and of course website and emails. An annual review is not inappropriate.

Who Does It?

There are several approaches to performing an audit. One is to convene a session with internal staff—creative sorts not only able to brainstorm but to act as candid reviewers, able to envision how communications might be done better. This method requires a facilitator to lead the discussion and arrive at apt conclusions. Another way to audit is to retain an experienced consultant outside of the organization, who should be able to render a more impartial assessment. The drawback is less familiarity with fine details.

Here are the most important communications tools that should be reviewed.

The Logo – Icon of the Brand

Logos can sing where words just talk. A well designed logo can be an association’s most memorable identifier because it shows and tells so much: the initials or acronym, the tone and attitude, and when accompanied by a tag line, a statement of being. Colors, typeface, and graphics all play important roles in the composition of an association logo. That is why the primary symbol of an organization’s brand is often so difficult to conceive and so complicated to design.

If your communications audit concludes that a new or redrawn logo is needed, make no mistake: the logo is the work of an experienced artist or illustrator able to transfer concept into quality art.

The Tagline – A Statement of Fact

The tagline is meant to convey the character of the association in a few well-chosen words or a phrase. Wording must be economical and precise, a simple statement that mirrors the purpose of the association and the members it serves. A tag line is neither a vision statement nor a mission statement. Rather, it is a few carefully selected words that are able to sum up the promise of an association’s brand.

Taglines should be used often, most appropriately with the logo so that the two are complementary, recognized, and memorable.

Journals and Newspapers – Flagship Pubs

A communications audit should pay particular attention to what ought to be the most notable communications of all—premier print and web publications such as journals, newspapers, newsletters, and books. Auditing these can be particularly challenging because the review examines the often complex connection between the science and art of writing and the appropriate complementary design.

How its publications stand out—formal or informal, serious or witty, in scientific or narrative prose—often defines an organization’s depth of thought and leadership in its field.

Display Ads – Bold Branding

Whether in one’s own publications or in another’s, getting it right in display ads can be one of the more difficult messages to craft. Displays have a lot of work to do in a restricted space that must grasp attention, hold it long enough to incite interest, deliver a simple message or complex idea, and make it memorable.

The best display ads cause the reader to make a double-take on their meaning. Puns are the stuff of good newspaper headlines because they cause the reader to linger and are catchy in their double or triple meaning. Display ads should do more than beg attention; they should be seen as response devices that encourage response to a proposal or an idea.

Editorial Style – Clarity is Key

The ultimate goal of successful communications is clarity—clarity of thought, clarity of expression, and clarity of intent. How successfully an association communicates is a combination of words and images, ideas and tone, and presentation and design. It can be difficult finding quality writers who are able to adjust copy and text to fit topic and audience in the most appropriate ways. The communications audit should not shy away from an examination of writing style and clarity, though these can be easy to criticize yet difficult to do well.

Digital Communications – New Directions

Much attention is paid to the new communicators in the mix—websites, blogs, social media, emails, and mobile. All seem to be constantly reshaping and remaking themselves in the most competitive ways. Auditing them for continuity, consistency, and currency is important. How well an organization is able to stay abreast of who, what, where, why, and how in the digital world is a real measure of both communications and technical achievement.

A Final Thought – Selecting a Professional

A communications audit is important but it can only be as useful as the knowledge and ability of those who conduct it. When done well, an audit can add considerable value to a membership organization by directing messaging and content in ways that are clear, concise, appropriate, and professional.

What are the key pieces that you should include in your plan?

We recommend that a solid membership recruitment plan examine five important elements.

1. The Target Market – who you want to reach.

This includes determining what are your primary markets and acquiring or building lists of these prospects. Who you market to is the single biggest determinant of a successful recruitment program.

Are those you have targeted in the past still the best prospects for today? Are there alternative or ancillary markets that would be appropriate for your growth? Explore them.

Once you have determined what markets you want to reach, spend time researching the lists that include these prospects. Lists come in all shapes and sizes as well as degrees of quality. The best membership recruitment lists are typically non-member lists from your own database, members or subscribers from similar organizations, and buyers of products and services in your marketplace. Proven direct marketing purchasing behavior is the best indicator that someone will respond to your membership offer.

2. The Membership Offer – what a member will receive.

This includes how you package your membership product and what special offers you will make in your promotions to attract new members. Recruitment works best when you can answer the question, “why join now,” with a special limited-time offer.

Once it was standard procedure to begin a recruitment program with a straight non-incentivized offer and then work into increasingly more valuable enticements. Prospects now largely expect some sort of sweetener from the outset, so be prepared to program a series of offers in a logical sequence and with an appropriate mix.

Keep in mind to test offers against one another to be certain you are maximizing your returns. Establish a control letter and try to beat it.

3. The Marketing Message – why a member should join.

This includes defining your value proposition and presenting solutions and benefits to members that are compelling. Here is where you need to develop the case on why membership in your organization is an indispensable resource.

Indispensability is one of the most powerful messages you can present. The same as the unique selling proposition (USP), it will convince appropriate prospects who want what you offer that there is no other place to go to get what they need.

Keep your words clear and succinct. Craft your message to tell prospects not what they will receive but what they will get out of what they receive. In other words, stress benefits not features.

4. The Promotional Tactics – how a member will be reached.

This includes selecting the best marketing channels like personal sales, direct mail, email, telemarketing, etc. and the frequency and timing of promotions. Typically an integrated marketing approach, using multiple channels, is the most effective.

The most appropriate primary channel depends on the degree of marketing power you need to apply. A high price and a difficult decision to buy may require face-to-face selling, while a less complex sale might need telemarketing or, less expensive, direct mail.

Mixing multiple channels allows you to test differing combinations and apply various levels of selling to make the most of your investment. A lagging direct mail program may be rescued by adding emails and then, if necessary, telemarketing follow-ups as well.

5. The Testing and Tracking – where to take future efforts.

This includes trying variations of the four points listed above and recording which lists, offers, messages, and channels produce the best ROI and number of new members. Failure to test and track recruitment efforts is probably the single most neglected element in marketing planning and execution.

Tracking should not be difficult. Assign individual codes to each list and to each offer and compile the results as they come in. That way you will know which work and which do not.

Keeping track of online joins can be a bit more challenging. This requires a web application form that requests prospects to enter coding information themselves. Providing a special offer that requires a code to be input in the website will help capture more codes from online responses.

You are invited to download 100 Super Hints Revealed from the MGI website.

One-to-one direct marketing remains the most powerful tool for membership marketers because it is efficient, targeted, and measurable.

This month we focus on the second series of super helpful hints.

Prospecting

When you are looking for new members, prioritize your mail or email lists for best results.

First, test your own lists in this order: lapsed members and member buyers (tested by year), followed by current non-member subscribers, buyers, attendees, and inquirers.

Next, test outside response lists of similar organizations including current members, lapsed members, recent attendees, buyers, and inquirers.

Then, test outside non-response lists in this order: 3-month or “hotline” names in selects most like your target prospects; older names in less specific selects; and finally, the master list without selects.

Mailing

Not sure how many pieces to mail? Think backwards: first, estimate response rates, then mail as many prospects as needed to reach your new member goal. Resist temptation; test only one item at a time: list, offer, message, or creative. And always code responses to track what you test.

Know the five basic formulas for direct mail: renewal rate; break-even; lifetime value; maximum acquisition cost; and steady state. See MGI Tipster Vol. 11 No. 7.

Production

You hire your vendors to work for you so don’t be reluctant to ask them: what’s new? what’s working? Buy in bulk and print in bulk to save money. Consider off-the-shelf house stocks since paper can be expensive. Piggyback your own mailings to lower costs. Comingle small mailings to boost presort discounts.

Include return envelopes to lift response. Write the application form first and make it simple-to-understand and easy-to-complete. Be sure there’s enough space to fill in the information requested. It should contain helpful devices like numbering and check boxes to help the adult reader. It may seem counterintuitive, but consider not including brochures in your acquisition mailings; test and you may find their inclusion actually depresses response.

Offers

Membership is a push, not a pull commodity: you may build it but don’t expect many to come unless you ask and ask again. And ask membership prospects to do only one thing: join. That’s the only decision you want them to make.

Make it easy to join: let them do it by mail, email, fax, telephone, and website. Make it easy to pay: offer every possible payment option … mail, email, 800 phone number, fax, multi-payments, checks, credit cards, purchase orders, bill-me options, and automatic renewal.

Develop logical price points and test them; you may be surprised to learn that less is not always better. Consider one of the most effective offers of all: a no-risk, no-questions-asked, money-back guarantee.

Research

If understanding member needs is important in a strong economy, it can be critical in a down economy. You’ve got to know how well you serve the needs of your members and their profession, and the sooner the better.

It happens: boards of directors can have biases that may be misguided or downright wrong. Research may validate their beliefs or disprove them. Survey results can be unpopular and uncomplimentary, but don’t ignore them. Rather, correct the negatives and capitalize on the positives. Fulfilling member needs is central to membership growth.

Conferences

Start early: as soon as your annual conference winds down begin promoting next year’s event. When designing promotion materials, stick with the basics. Keep postcards simple, oversized, and colorful. Unlike member acquisition, use self-mailers. Brand your publications so every piece is obviously you.

Promote in a logical manner beginning with “save the date,” then “early bird” registration discounts, then countdown reminders, and finally day pass offers.

While many of direct marketing’s fundamentals are largely common sense, there are a lot of them. Marketing General Incorporated recently published a booklet by MGI Senior Vice President Raylene Kershaw titled 100 Super Hints Revealed, which is a compilation of direct marketing suggestions divided into 13 topics.

You are invited to download a copy of 100 Super Hints Revealed from the MGI website. Some hints may seem obvious; others less so; still others may appear a little odd but have proven their worth over time.

Basics

Develop your concept and set your goals so you know what you are trying to accomplish, including why, how, and when. Be sure to put your plan in writing. Consult it often and have a Plan B.

Know your USP—that’s your Unique Selling Proposition—the one thing your organization can do that no one else can, or at the very least, the one thing you can do better than most others. The USP is what differentiates you. It’s also the foundation of your 15 second elevator speech when you are asked to explain what your organization does and what makes it special.

Test everything—list, offer, format—and don’t reinvent the wheel. If it works, use it, even if you don’t much like it. Think big picture, not piecemeal. Think campaign, not one-offs. Think multiple channel, not single, and sell your brand as well as your product or service.

Copy

Write to be heard, not read. Write in the active voice. Write short sentences and use simple and precise words. Mention “you” often to involve your reader. Author the order and the order form first so you’ll be certain to say what you are selling. And don’t forget to ask for the order.

Be straightforward and succinct, not wordy. Personalize your letters so you speak directly to your reader, one-on-one. When your draft is done, set it aside and review it later with a critical eye.

Offers

Sell benefits, not features. Negatives usually pull better than positives, and fear generally outdraws other reasons to join. Keep the offer simple and avoid combining offers, which can complicate, delay, and even derail the decision.

Looks

Great design can sometimes boost sales but bad design will always hurt them. Use photos and graphics to help you sell. Keep the design appropriate to your audience. Avoid design that is too simple or too smart so it gets in the way of your purpose, which is to communicate your offer and sell. Adults are visual learners: test captions, call-outs, and most importantly, use type sizes which can be easily read by your audience.

The next edition of the MGI Tipster in September will reveal more super tips for direct marketers.

Much of the data reported in the recently released 2012 Membership Marketing Benchmarking Report was encouraging. Many organizations are experiencing member growth by using effective tools to recruit, engage, and retain members.

For your free copy of the final report, download it here.

Still, most organizations fail to use membership data

We asked the 667 organizations we surveyed, “What types of analysis do you use to measure the effectiveness of your membership marketing campaigns?” and found that 40 percent use no marketing measurements at all, and fewer than half track response rates of their recruitment programs.This chart illustrates the data and analysis membership organizations say they use. Forty percent use none.
Less than half do any analysis. Five basic formulas tell member organizations how they are doing.

In an age of computers and big investments in websites and databases, many organizations still don’t use basic marketing practices that have existed for years.

As long ago as 1923, Claude C. Hopkins wrote in his book, Scientific Advertising, that “Advertising has reached the status of a science … we learn the principles and prove them by repeated tests. When one method invariably proves best, that method becomes a fixed principle.”

Simple math that tells so much

Five simple but essential mathematical formulas tell membership marketers how long the typical member remains a member; how much each membership is worth over time; how much an organization can afford to spend recruiting a member; and the maximum number of members an association can expect to reach. Here are the formulas:

1. Membership Annual Renewal Rate

The Renewal Rate measures the number of members kept over a period of time—usually a fiscal or calendar year. Here’s the formula:

• Renewal Rate = Total Number of Members Today (minus 12 months of new members) divided by the Total Number of Members in Previous Year.

• Example: When Today’s members = 10,500; a year ago members = 10,000; and new members joined in the same year = 1,500: (10,500 – 1,500) / 10,000 = 90% Renewal Rate.

2. Membership Average Tenure

The Average Tenure measures how long the typical member stays with an association. Here’s the two-step formula:

• First, figure the Lapse Rate, which is the inverse of the Renewal Rate: a 90% Renewal Rate = 10% Lapse Rate, or as a decimal .1.

• Second, figure the Average Tenure, which is 1 divided by the Lapse Rate as a decimal.

• Example: 1 / .1 = 10 years Average Tenure.

3. Lifetime Value (LTV) of a Member

Lifetime Value measures the revenue a member will produce for the organization during her/his tenure. Here’s the formula:

• LTV = Average Tenure multiplied by (Dues + Non-Dues Revenue).

• Example: When Dues = $100 and Non-Dues = $50 per year: 10 years x ($100 + $50) = $1,500 LTV.

4. Maximum Acquisition Cost (MAC)

Maximum Acquisition Cost measures the long-term net incremental value (or margin) produced by a member. That is to say, how much an organization may spend recruiting a member and still make a profit. Here’s the formula:

• MAC = (Annual Dues + Non-Dues Revenue) minus (Annual Incremental Servicing Costs + Cost of Goods Sold) multiplied by Average Tenure.

• Example when Incremental Servicing Costs = $20 and Cost of Goods Sold = $25:
(($100 + $50) – ($20 + $25)) x 10 = $1,050 MAC.

5. Steady State or Equilibrium of a Membership

Steady State projects the long-term equilibrium of a membership based on current new member input and lapse rates. That is to say, it’s the maximum number of members an organization can have given renewal rates and new member input. Here’s the formula:

• Total Membership Steady State = Annual New Member Input divided by Lapse Rate.

• Example: 1,500 / .10 = 15,000.

Why these calculations are important

Organizations that track responses, measure renewal rates, know the lifetime value of members, and measure maximum acquisition cost can make better informed decisions based upon a firm, rational foundation for membership marketing programs.

Putting the 2012 Membership Marketing Benchmarking Report to Good Use Marketing General Incorporated this month published the findings from its fourth annual Membership Marketing Benchmarking Report, which assesses membership growth trends and the techniques that associations use to generate those results. If you would like a copy of the 2012 Membership Marketing Benchmarking Report, click here to download the file. It’s a large file, so please be patient. This year for the first time, MGI has developed the ability to benchmark individual membership organizations against the overall Report findings to pinpoint how organizations measure up on a number of key characteristics. Renewal rates, for example, can be compared to the renewal rates of the entire 2012 studied group or against subsets, such as individual association types such as healthcare or education. It’s Called Competitive Set Analysis Competitive Set Analysis is a system that enables MGI to identify an organization’s space in the association universe by comparing and contrasting results as well as the methods the organization uses to achieve those results. MGI is able to extract pertinent data from the Benchmarking Report to generate a personalized report thanks to the extensive cross tabulations generated. How Competitive Set Analysis Works The 2012 Membership Marketing Benchmarking Report collected data from nearly 700 associations to develop a better understanding

Attention Association Meeting Planners! The MGI 2012 Association Meeting and Trade Show Benchmarking Survey is currently underway. If you are involved in planning, promoting, or carrying out your organization’s annual conference or trade show, your participation in this first-of-its-kind study is vitally needed. Simply click here or go to https://marketinggeneral.us2. qualtrics.com/SE/?SID=SV_ 1Y8e3fp15TnRtfS and let us know how you go about convening your annual meeting, or forward the link to the appropriate individual in your organization. Your input is greatly appreciated! It takes only about 20 minutes to complete online and the information gathered will provide insight and opportunity to benchmark your organization’s meeting preparations, processes, and outcomes against others. Participants will receive a copy of the final results.

of the strategies and tactics they use to recruit, engage, and retain members. The Report is the most exhaustive and comprehensive in the series to date.

The Report generated sufficient data to be able to support analysis of three segments within the association market space with statistically significant accuracy—healthcare, education, and engineering.

A healthcare association, for example, can benchmark against the healthcare organizations that participated in the larger membership study, drilling down for a far more focused and useful comparison of trends and directions just in its own field.

What Competitive Set Analysis Finds

The Competitive Set Analysis focuses on changes and trends in acquisition and renewals. It compares the renewal rates, for example, with the overall median renewal rate for the participants in the Benchmarking Report, and also compares the rates with just those associations that are in the same profession.

A key feature of the report is to cross tabulate specific marketing practices with reported membership outcomes to determine which practices support better results.

The analysis then examines recruitment channels and engagement levels to develop a profile not only of the rates themselves but also the systems used to arrive at those rates. This results in far more discrete information that is actionable by the organization.

Analytics That Reveal How to Maximize Growth

The Competitive Set Analysis also reveals the inverse of the suggested solutions—the greatest challenges to growth that are pathways best to avoid. This offers a far clearer tactical picture of the methods necessary to prioritize membership goals and maximize membership marketing spending.

The names of the participant organizations are not released to the client commissioning the Competitive Set Analysis; only the aggregate data is, to ensure the privacy that was promised all member associations taking part in the Benchmarking Report.

How the New Research Tool Came About

This new research tool is an outgrowth of the work done by MGI’s Research Director Dr. Adina Wasserman and Market Research Analyst Jeffrey Tranguch on a project initially conceived by MGI Vice President Erik Schonher.

“This is a comprehensive analytical tool that associations and other membership organizations can use to frame where they are, how they compare to others, and ways to improve their performance,” said Schonher.

Welcome to “what’s next in the evolution of the focus group”—the Bulletin Board Focus Group (BBFG). We all know that the focus group is a tried and true research tool for qualitative study of ideas, trends, and opinions on just about any subject where thoughts and impressions are collected.

Traditionally, staging a focus group has required selecting participants, assembling them, securing an appropriate setting in which to conduct the discussion, assigning an experienced moderator, obtaining dependable transcription equipment, and often supplying refreshments.

The BBFG is the next step in the evolution of qualitative research moving focus groups from the physical to the virtual using online resources. Marketing General Incorporated has used the BBFG method in several research projects and has found it effective, efficient, and a more than adequate substitute for the traditional focus group.

How It Works

Participants are typically recruited through email and asked to participate in the online focus group on a certain date or over several days, depending upon the length and scope of the research. To participate, the individuals in the group log on to a pre-designed bulletin board to access the questions and offer their typed answers. The sessions can be monitored by researchers at any time.

The Advantages of the Method

There are real savings in time and cost using the BBFG method. Participants need not meet in a group but can participate from home or wherever they have access to the Internet. Studies can be held any time and are not contingent on other meetings or conferences. Traditionally, focus groups have been held during these events to help defray the expense of assembling the group.

Rather than taking up a block of time dedicated to the session, BBFG participants can log on to the session on their own schedules. In addition, because the research is online, it becomes cost effective to include international participants—a group that has been both difficult and expensive to access using the traditional focus group. The conversations are already in typewritten form, eliminating the transcription step leading to final analysis.

The Advantages of Insight

Rather than managing the conversation as in a traditional focus group, researchers can engage the entire study group in one conversation, separate the participants into subgroups, isolate them entirely, and prevent them seeing other comments until all are completed to eliminate influences.

Researchers can interact with any or all participants in the BBFG to pose follow-up questions, insert comments, or direct the discussion as needed. The client for whom the study is being conducted can also be an active observer in the research, watching the discussions unfold in real time and directing the BBFG moderators to probe for greater detail from specific participants.

A Dynamic Addition

Because the medium is the Internet, researchers can post pictures, present videos, insert graphs, and upload documents for the participants to view and comment on. The enables a better understanding of discussion topics where graphics tell a story better than words alone.

This year’s survey, which included responses from more than 680 participating associations, found that the major indicators of membership health—total membership, new members acquired, and membership renewals—all showed continuing improvements from the previous year’s benchmarking report.

A total of 52% of respondents said they had recorded an overall increase in members over the previous 12 months. This is the second year of reported membership increases since the low of 36% who reported membership growth in 2010 (see chart). Numbers may not total 100% due to rounding.

Percentage Change in Entire Membership Over Past ONE Year 2009 2010 2011 2012 Increase 45% 36% 49% 52% No Change 16% 14% 16% 16% Decreased 35% 47% 34% 29% Not Sure 5% 3% 2% 3%

Growth in new member recruitment appears to be a big driver in membership growth. Of responding association executives, 60% report the acquisition of new members increased over the past year. These results come on top of a strong 2011 when 57% of respondents said that they had an increase in new members.

Percentage Change in NEW-Member Acquisition Over Past Year 2009 2010 2011 2012 Increase 49% 42% 56% 60% No Change 22% 20% 21% 17% Decreased 21% 26% 16% 14% Not Sure 10% 12% 8% 9%

Finally, the survey found that membership renewals had a more positive outcome this past year, with 35% of respondents saying that they have had an increase in overall renewal rates.

Percentage Change in Member RENEWALS Over Past Year 2009 2010 2011 2012 Increase 22% 21% 32% 35% No Change 39% 27% 37% 33% Decreased 31% 44% 24% 22% Not Sure 9% 8% 7% 10%

The continued increases in each of these three key membership statistics speaks to the improving health and performance of membership associations.

The final report will include in-depth analyses of many topics including:

• The effectiveness and usage of social media in membership marketing.
• The proportion of members using various products and programs offered by associations.
• The global distribution of membership by continent.
• The association management software (AMS) in use.
• The techniques used to engage new members.

All of the data points will be cross tabulated against the membership outcomes that associations are experiencing.