Membership Renewals Take a Dive

It’s been three years (perhaps more depending on which economist you ask) since the recession hit. Nonprofits and associations have faced tough times as they struggled to raise money, recruit new members, and retain old ones. As organizations continue to plan for 2011, it’s important to examine 2010 benchmarks such as the Membership Marketing Benchmark report that surveyed over 400 association executives.

“Associations reported that they were having trouble acquiring new members, renewing the members that they had and growing the overall membership count compared to last year,” concluded the report.

Check out these Stats:

• In 2009, 31% of associations reported that membership renewal rates decreased in the previous year. In 2010, 44% of associations saw a decline in membership renewal rates. Trade associations have had a much tougher membership year than have individual membership associations.

• On a positive note, 57% of associations reported that membership was up over the past five years and 36% said that membership numbers were up for the past year.

• 43% of individual membership associations experienced membership growth in the past year, but only 26% of trade associations saw membership growth.

Why is membership not growing as much as associations had hoped? Lack of value NOT membership fees! 36% of respondents cited value as the key issue that former members expressed for not renewing memberships. This is an 80% increase over last year.

If your association or nonprofit is seeing a lower response in membership renewals, you need to take a deep look at your membership program.  Are you spending the necessary time and resources to research and talk to members to better understand:

• What they are looking to receive from your organization that is personally important to them and makes your organization valuable.

•  Content (online and offline) and products aimed at your members.

Reaching Members Through Word of Mouth and Websites

How did prospective members find out about associations? 91% was through word-of mouth recommendations and 88% was through the association’s website. 67% learn about associations through emails and direct mail. “Email promotions and co-worker recommendations appear to be effective in generating association awareness, while direct mail and promotion to/at own conference seem to have lost some effectiveness in building awareness over the past year,” said the report. “Interestingly, the percentage of those using email marketing has increased in nearly the same proportion as the decline in the percentage of respondents using direct mail from the 2009 study, suggesting that email marketing may be replacing direct mail marketing for some associations.”

Associations also said that using a personal communications tactic (not generic robot sounding telemarketing) greatly increased renewal rates. Renewals were 80% higher when members received a call by staff member or volunteer.

Is your association or nonprofit experiencing a dip in renewal rates? What are some of the strategies you are using to turn it around and better engage members?



Comments

[Tony Rosssell]

Thanks for the excellent write up of our benchmarking research. Shortly we will be launching the questionnaire for the 2011 study. If any of the readers would like to participate in this year's research, I will be posting a link to the survey on my blog. I would encourage any membership organization to participate. Participants will receive a full copy of the report free. Tony

[Brian Reich]

Interesting analysis. I have no doubt that reaching and engaging members about their interests is something that any/all membership-based organizations could do more of, and do a better job with. The larger issue of value, however, is not addressed by communications alone (a common mistake that organizations make). Keep in mind that we live in an age in which the idea of community -- a collection of people with shared interests, able to band together (when they want) to do something -- has replaced, in many ways, the traditional idea of an organization. People don't feel they need to be a part of a structure to accomplish something, to get access to something, etc. They certainly don't feel as if they need to subscribe, be a member, pay for access, etc. when other opportunities abound. So, organizations could be communicating with their members just fine, elevating the awareness of the value they believe they offer, but by doing so they are actually hurting their chances of driving renewals. Once a member has an opportunity to see how little additional value they are getting, compared to what they can access on their own, membership doesn't seem to be so compelling. And from personal experience, I can tell you that most of the organizations out there haven't significantly upped their game in a while. The opposite is probably true. Organizations should consider the more internal-facing factors -- figure out how valuable a product/service they are (when compared to all forms of reasonable competition). And I don't think they necessarily need much more guidance from the audience to get that. The desires have been made clear. What is missing still is the commitment to change how the organizations operate and serve their audience. When that starts to happen, the numbers will turn around.