Strategies on How to Develop and Manage a Successful Membership Marketing Program for Your Association.

1. How to Develop and Manage a
Successful Membership Marketing
Program
AmCham Worldwide Executive Director’s Conference
Presented by
Tony Rossell
Senior Vice President
Marketing General, Inc.

2. Developing a Membership Strategy
“There is nothing like a crisis to clarify
the mind. In suddenly volatile and
different times, you must have a
strategy”
Richard P. Rumelt, Strategy in a ‘structural break’, Mckinsey Quarterly, December
2008.

3. What is membership marketing?
• Membership Marketing is a subset
in the field of Relationship Marketing
• Membership is a customer model
being adopted by many other
industries and organizations.
• Membership Marketing is the
process of acquiring, engaging,
upgrading, and renewing members.

4. How to be a Strategic Membership
Marketer
The four strategic areas for success in
membership marketing:
– Economics – Why
– Market -- Who
– Product – What
– Promotion – How
Goal: Take away at least one key
opportunity for your AmCham from
each of these four strategies.

5. Economics
• Response Rate
• Renewal Rate
• Average Tenure
• Lifetime Value
• Maximum Acquisition Cost
• Steady State Analysis

6. What is the basic marketing
measure?
Response Rate
• Response rate measures the number of prospects
who responded to a marketing effort.
– Total number of responses / Total number of
prospects contacted X 100.
– Example: (50/ 10,000) x 100 = .50%

7. How many members do we keep?
Renewal Rate
• Renewal Rate measures the number of members
kept over a given period of time -- usually during a
fiscal or calendar year.
• Total Number of Members Today (minus 12
months of new members) / Total Number of
Members in Previous Year
• Example: (10,000 – 1000)/9,000 = 90% Renewal
Rate

8. How long do members stay?
Average Tenure
• Average Tenure measures how long on average a
member stays with an association.
• Reciprocal of Renewal Rate: 1 – Renewal Rate or,
1 - .90 = .10
• Example: Divide Reciprocal into 1, or, 1 /.10 = an
Average Tenure of 10 years

9. How much are members worth?
Lifetime Value (LTV)
• Assume US $1,000 / Year Dues and US $500 / Year in Non-
Dues Revenue
· (Dues + Non-Dues Revenue) x Average Tenure = LTV
· Example: ($1,000 + $500) x 10 = $15,000 LTV
Maximum Acquisition Cost (MAC)
• Assume Incremental Servicing Costs = $200 and Cost of
Goods Sold = $250
· (Dues + Non-Dues Revenue) - (Incremental Servicing Costs +
Costs of Goods Sold) x Avg. Tenure = MAC
· Example: (($1,000 + $500) - ($200 + $250)) x 10 = $10,500
MAC

10. Where is membership headed?
Membership Steady State
• Annual New Member Input / Reciprocal of Renewal Rate (or
Lapse Rate) Shown as a Decimal = Total Membership Steady
State.
• For example, 500 New Member Input / .20 Lapse Rate = 2,500
Total Membership.

11. What’s the best strategy?
• Focus on acquisition by prioritizing the
membership-marketing budget to maintain
the current 75% renewal rate and add 800
new members each year.
• Focus on renewals by prioritizing the
membership-marketing budget to achieve an
85% renewal rate and maintain the current
level of 200 new members who join during
the year.
• Focus on a balanced approach by prioritizing
the membership-marketing budget to
achieve an 80% renewal rate and adding
500 new members each year.

12. Strategy Impacts Outcomes
• The first option with a 75% renewal rate and
800 new members per year will achieve a
total membership of ____ members over
time.
• The second option with an 85% renewal rate
and 200 new members per year will achieve
a total membership of ____ members over
time.
• The third option with an 80% renewal rate
with 500 new members per year will achieve
a total membership of _____ members over
time.

13. Case Study
The AmCham ABC last year had 10,000 members.
This year 1,500 new members were added to the
association. 600 of these new members were
attributed to two direct mail campaigns of 40,000
pieces each. Membership acquisition mailings cost
$750 per thousand pieces mailed. The
membership now stands at 10,500. Membership
dues are $500 a year. The average non-dues
revenue is $250 a year per member. Incremental
servicing costs average $100 per member. On
average, the cost of goods sold is 25 percent of the
sales price.

14. Exercise - Numbers
Please determine the following for
AmCham ABC:
– Acquisition Response Rate
– Association’s Renewal Rate
– Cost to obtain a member
– “Lifetime Value” of a Member
– “Maximum Acquisition Cost”
– “Steady State” Membership of ABC
Association

15. Exercise -- Strategy
• Based on the member economics,
what would you recommend as a
strategy going forward for this
organization? Some possible
recommendations are:
– Move monies from acquisition to retention.
– Increase member acquisition.
– Stay the course. Don’t change anything.

16. Market
• Serve a Market, Not a Product
(What do members use and value?)
– Awareness
– Usage
– Importance
– Loyalty (not satisfaction)
• Use behavior and characteristics to
segment your market
• Spend time, energy, and resources
on top prospects.

17. Product Awareness and Usage
Position
Service Total
Board Member Superintendent
Aware 83.0% 77.8% 90.8%
Policy Manual Customization
Used* 68.0% 67.3% 69.0%
Policy Reference Education Aware 74.2% 61.4% 93.4%
Subscription Service
(PRESS) Used* 81.6% 72.1% 91.0%
Aware 70.5% 64.5% 79.5%
Policy Manual Update
Used* 48.4% 47.3% 49.8%
Aware 55.6% 47.4% 67.8%
School Board Policies Online
Used* 41.9% 38.6% 46.2%
Administrative Procedures Aware 48.4% 39.6% 61.5%
Project Used* 38.5% 34.0% 42.9%
E-tools for Boards and Aware 42.4% 38.1% 48.7%
Districts Used* 28.0% 32.1% 22.7%
Aware 37.7% 29.3% 50.2%
PRESS Plus
Used* 44.4% 38.3% 49.6%

18. Product Gap Analysis
Academic Practitioner
Overall Both Student
Only Only
Improving my research Importance 3.25 3.74 2.83 3.26 3.53
skills
Meeting needs 2.55 2.72 2.56 2.56 2.56
Enhancing my professional Importance 3.45 3.04 3.41 3.17 3.94
credentials/capabilities
Meeting needs 2.37 2.57 2.30 2.45 2.37
Providing information on Importance 2.78 2.83 1.99 2.80 3.55
graduate training programs
Meeting needs 3.09 3.04 3.14 3.12 2.95
Providing test prep/support Importance 2.54 1.89 2.42 2.05 3.19
for licensing
Meeting needs 1.96 2.26 2.01 1.99 1.84
Enhancing my performance Importance 3.80 3.22 4.02 3.47 3.78
by providing information
on best practices Meeting needs 2.43 2.62 2.31 2.43 2.63
Improving my consulting Importance 3.40 2.44 3.55 2.89 3.75
skills
Meeting needs 2.00 2.34 1.91 2.03 2.16
Red=statistically significant decrease
Blue=statistically significant increase

19. Potential Acquisition Market
Segments
Former Members
Like Associations
Subscribers
Directories

20. Market Segmentation Through
Data Modeling
80% of responses with
20% of the market

21. Look for Thriving People,
Companies, and Sectors
“Prosperity, success and happiness at
work encourage association membership,
because associations are where the
winners meet in many professions.”
– 79% of association members “very happy in
job”
– 49% of association members “very happy in
job”
Arthur C. Brooks, PhD., Where the Winners Meet: Why Happier, More Successful
People Gravitate toward Associations, The William E. Smith Institute for Association
Research, January 2008, page 13.

22. Product
• Value Proposition
• Product Line Extension (Increasing
share of wallet)
– Product Packaging (Don’t sell a “black” Ford)
• Pricing
– Maximizing revenue through the inelastic dues demand of
membership

23. Product -- Value Proposition
“The message . . . Is that no company
can succeed today by trying to be all
things to all people. It must instead find
the unique value it alone can deliver to
a chosen market.”
Treacy and Wiersema, The Discipline of Market Leaders, page xiv

24. Product -- Value Proposition
What separates you from all
Vision other organizations?
ASAE’s Decision to Join --
research of 16,944 members and
Reward Relationship former members from 18
associations -- highlights these
components of value that a
member is looking to receive.

25. Product -- Defining Elements
• Vision – When we cast a vision for members that
together we can do more than we can do alone, we
create a compelling answer to the question, “Why
belong to this organization?”
• Reward – Members want tangible value to support
their continued membership with product that
makes a difference in their lives or career. This
answers the question, “What’s in it for me?”
• Relationship – We are a communal people. We
want to be around people that we can help and that
can help us. Relationship can be with staff or other
members and face to face or electronic. It answers
the question, “Who can I connect to here?”

26. Sample Value Proposition
“SMPS is a community of marketing and business
development professionals working to secure
profitable business relationships for their A/E/C
companies. Through networking, business
intelligence, and research, SMPS members gain a
competitive advantage in positioning their firms
successfully in the marketplace. SMPS offers
members professional development, leadership
opportunities, and market-ing resources to
advance their careers. SMPS is the only
organization dedicated to creating business
opportunities in the A/E/C industry.”

27. Product -- Exercise
• Discussion of value proposition
• Drafting a value proposition for your
organization
• Sharing your value proposition

28. Product Line Extension
“Product line extension -- adding
depth to an existing product line by
introducing new products in the
same product category; product line
extensions give customers greater
choice and help to protect the firm
from a flanking attack by a
competitor."
The Marketing Dictionary

29. Product Line Extension
• Express Membership -- $29: online only services
• Basic Membership -- $49: online services plus
subscriptions to the monthly periodical and
newsletter
• Comprehensive Membership -- $89: basic benefits
plus 5 association books shipped as they are
published
• Premium Membership -- $219: all of the above plus
an additional newsletter, four additional books and
a $100 professional development voucher
• Institutional Membership -- $899: a package that
includes one Premium membership and 10 Basic
memberships

30. Product -- Pricing Increases
• Association Dues Increase
Research
– Association memberships will support an
increase as high as 11% to 20%.
– Associations in the study raising dues by 11%
to 20% had the highest percentage of revenue
increase, no reported revenue decrease and
the lowest percentage of stagnant revenue.
Full Dues Increase Study can be found at
http://tinyurl.com/mmduesincrease

31. Product – Price Points
A New Zealand study found the
following:
• 87% of prices were defined as odd
prices
• 60% of prices ended in the digit 9
• 30% of prices ending in the digit 5
Judith Holdershaw, Philip Gendall and Ron Garland, The Widespread Use of Odd
Pricing in the Retail Sector, Marketing Bulletin, 1997.

32. Promotion
• Flawed Strategies
– “If you build it, they will come” – Field of
Dreams
– “If someone comes to you with a 'great'
product that just needs some
marketing, the game is probably
already over.” -- Seth Godin’s Blog
– Stop marketing in a bad economy.

33. Another View
“It is well documented that brands
that increase advertising during a
recession, when competitors are
cutting back, can improve market
share and return on investment at
lower cost than during good
economic times.”
John Quelch, Marketing Your Way Through a Recession, Harvard Business School,
March 3, 2008

34. Promotion
Three Foundations of Promotion
1. Hypothesizing – Start each promotion with
the question, “What cool stuff can we do?”
– Can we combine?
– Can we add?
– Can we eliminate?
– Can we make an connection?
– Can we simplify?
– Can we substitute?
– Can we reverse?
– Can we copy (adapting best practices)?
Bob Stone, Successful Direct Marketing Methods.

35. Promotion – How to Validate?
2. Testing – Reveals 1,000% Variance in
Response
– Lists
– Channel (mail, email, FAX, phone, face to face)
– Offers (discounts, trials, premiums)
– Messages (gain, fear, pain)
– Payment Options (ACCR and installment billing)
– Format Graphics
3. Tracking – Benchmarking success

37. Promotion
“Successful companies are learning
companies. They collect feedback from the
marketplace, audit and evaluate results, and
take corrections designed to improve their
performance. Good marketing works by
constantly monitoring its position in relation
to its destination.”
Philip Kotler, Kotler on Marketing, page 34

38. Membership Promotional Strategy
Applied
“Don’t Push Growth;
Remove the Factors
Limiting Growth.”
Peter Senge, The Fifth Discipline

39. Membership Lifecycle
Reinstatement
Renewal Awareness
Engagement Recruitment

40. Awareness
• Defined: The process of establishing your
brand in the minds of prospective
members.
• Members do not join an organization they
do not know, so “90% of success is just
showing up.”
– Search Engine Optimization (SEO)
– Free Email Newsletter
– Online PR Releases (i.e. PR Web)
– Word of Mouth Marketing
– Social Media (LinkedIn, Twitter)
– Development and Participation in Blogs
• Goal – Build Mind Share (and Prospect
Database)

42. Free Email Newsletter
A key step to
building a
database of
prospective
members and
making them
aware of your
organization and
activity is to offer a
free email
newsletter.

43. Recruitment
• Definition: The process of inviting
new members to join your
organization.
• Push vs. Pull Products --
Membership is a “PUSH” product

44. 7 Top Recruitment Tips
1. Begin each and every campaign by thinking
creatively and asking “WHO MIGHT BE
INTERESTED IN JOINING?” Then search out lists
that contain these potential members.
2. Develop a special offer to answer your prospect’s
question: “WHY JOIN NOW?”
• Dues Discount
• No-Obligation
• Guarantees
• Installment Billing
1. Carefully develop a strong Unique Selling
Proposition (USP). The USP answers the
prospect’s question of “WHY THIS
MEMBERSHIP?”

45. Why People Buy
Pain
In trouble and want to get out of it.
A
Present Present
Future Future
Fear Gain
See trouble coming Can visualize something great
and want to avoid it. and want to experience it.
B C

46. Your USP for Membership
As employment and consumer spending slows, manufacturing
professionals are concerned. So how can you prepare for change, build
your skills and position yourself for career success? See details inside...

47. 7 Top Recruitment Tips
4. Build your promotion around a metaphor --
something a prospect will recognize and know what
to do with. Try using an invitation, survey,
certificate, or temporary membership card format.
5. Write your promotion in terms of a conversation
between a salesperson and a prospective member.
Ask and answer the questions any prospective
member would ask (e.g., “IT SEEMS TOO
EXPENSIVE”, or "I’M NOT SURE IT WILL BE
USEFUL TO ME.")
6. If you are using direct mail, make the investment in
a computer-personalized format (i.e., lasering the
name and address on the letter and reply).
7. Before you send out your promotion, be sure to set
up a system to accurately track responses.

48. Engagement
• Definition: The process of moving
members from observers into users
of the resources made available by
your organization.
• The first year of membership is the
“Conversion Year”
• Members Who Interact Convert

49. Impact of Interaction
• Data Analytics for one association
on engagement.
– Members who attended an association meeting in the
past year were 19% more likely to renew than those
who did not attend a meeting.
– Members who attended four or more meetings were
30% more likely to renew than members who never
attended a meeting.
– Members who placed a product order in the past year
were 28% more likely to renew than those who had
not placed an order.
– Members who upgraded their membership in the past
year to a higher level of service were 12% more likely
to renew.

50. Renewal
• Definition: The process of
confirming the value that has been
delivered to the member over the
past year and requesting the
continuance of the relationship.
– Renewals are the members chance to “vote” on the
value of what you have provided to them.
• The number one reason members
give for not renewing is: “I
FORGOT”
– Renewal keys: Frequency, Intensity, Duration

51. Renewal Frequency and Timing
Month Activity
1 Renewal Acknowledgment e-mail
2 New Member “Special Offer”
3
4 New Member Survey
5 NCOA/fax/email/phone append
6
7
8 Pre-renewal “Early Bird” Email
9 Mail notice # 1 & Email
10 Mail notice # 2 & Email
11 Mail notice # 3 & Email
12 Expire email or fax renewal
13 Telemarketing
14 Mail notice # 4 & Email

52. Reinstatement
• Definition: The process of re-introducing
yourself to your former member.
• Reinstatement programs test the
effectiveness of your renewal program.
– "Look not where you fell, look where you slipped." - African
Proverb
• Many organizations are sitting on
hundreds of members just waiting to
return.

53. What Lapsed Members Say
Likelihood to Renew Membership in the Future
Among lapsed members
Very/Somewhat
Unlikely Very Likely
25% 25%
Neither Likely nor
Unlikely
16% Somewhat Likely
34%

54. Growth Strategy
“Growth endures not because of
fortuitous demand, a hot
product, or any single tactic.
Growth endures when
management follows a portfolio
of disciplines to ensure that a
broad set of growth
opportunities are identified and
captured as routinely as costs
are controlled and processes
are improved.”
Michael Treacy, Double-Digit Growth

55. Tony Rossell
Tony serves as the senior vice president of
Marketing General, Inc., an Alexandria, Virginia-
based firm that specializes in membership
marketing solutions for associations. A frequent
write and speaker on marketing topics, Tony is a
contributing author to two books, Membership
Marketing (ASAE 2000) and Membership
Essentials (ASAE 2008). He writes the
Membership Marketing Blog. Contact Tony at 703-
706-0360 or Tony@marketinggeneral.com.