Your Members Are Not Always Your Best Customers

Grow Engagement
Reading Time: 3 minutes

This article first appeared in Sidecar as Are Your Members Your Best Customers?

How to grow engagement? It’s a law of nature in marketing: Your best prospect is the customer you already have. Research consistently shows that it costs six to seven times more to get a new customer than to keep one, and in membership terms, smart associations understand what that means for retention. A dollar spent on retention goes much further than a dollar spent on recruitment.

It goes further than current members, too. Your second-best customers are likely to be your lapsed members – strange as it may sound. Members who have left you may be the easiest to recruit again because they know you, and you know them, which is half the battle in acquisition.

However, are these the only groups that associations should be thinking about to grow engagement?

Looking Beyond Your Membershiop

Are members your only customers? The answer is no, but most associations don’t think that way. After all, they’re membership organizations, and members matter most. While that might be true, they’re not the only ones who matter.

What about all the others you serve who are not members? People who attend your events, take your training, buy your publications and more? These are your non-member customers.

Understanding The Impact of Non-Members

In purely financial terms, these customers are possibly more valuable than most of your members. How? Someone who attends two to three events each year, every year is probably contributing more revenue than a member who simply pays their dues. They will probably be more loyal than unengaged members, too.

“But they should become members!” you say. Of course they should. They might be your best prospects of all. After all, non-member customers know you, have a relationship with you and get value from you. More importantly, you know who they are and how to talk to them. They should be prime targets for recruitment, and they are. One large engineering association tested marketing specifically to non-member customers and found they responded three to five times better than the general market.  

The Challenge for Non-Member Engagement

But what if they don’t want to be members? This is where most associations fall down. They push the non-responders to the side and move on to the next prospective member. In reality, there is plenty of upside in growing those non-member relationships. The people most likely to come to an event are those who come to other events. People who like your events will likely enjoy your training and vice versa. 

Unfortunately, associations don’t think this way, so they don’t cultivate customer relationships and leave a lot of money on the table.

Associations make significant investments in technology to manage their member relationships: to communicate with, engage and renew them. Very few make similar investments in managing non-member relationships.

Building a Customer Engagement Plan

The few who do manage their customer relationships are generally those that don’t depend on dues revenue. Organizations with hugely successful publications or event businesses, for example, manage their customers well because that is what it takes to be successful. 

You may not be one of those organizations, but there are lessons to learn from them that will help you grow engagement and non-dues revenue streams. So what does it mean to manage a customer relationship? Fundamentally, it means gaining insight into your current relationship and building a strategy for what you want it to be.

Consolidating Customer Data

The first part is hard for most associations. Events, training, subscription, and membership data are usually not kept in one place. If they are, they are generally not looked at with a single view of the customer, namely, the big picture of their relationship. 

The first step would be to figure out how many customers you have. If you add up all of the people who have transacted with you in the last five years, including lapsed members, how big is your audience? Your customer universe will likely dwarf your current membership. How much untapped growth opportunity is there? 

Setting Goals for Non-Member Interactions

The second part of managing a customer relationship is making it into what you want it to be. What do you want from your customers besides membership? Is it to maximize revenue right now? To cross-sell your offerings? To grow engagement and repeat business? Only managed customer relationships achieve these things. Unfortunately, that is what most associations leave on the table.

Making the Most of Your Association’s Relationships

While many associations only focus on their members, a customer-centered strategy is just a mental leap away. You have thousands, if not tens of thousands, of relationships today with customers who will never be members. So how will you make the most of them?

If your best prospects are the customers you already have, your best customers are the ones you treat like customers. If you think of membership as one opportunity among others for customers, you unlock many new avenues to deliver value and grow engagement.

Are Your Members Your Best Customers?

Non-Member Customers
Reading Time: 3 minutes

It’s a law of nature in marketing: Your best prospect is the customer you already have. Research consistently shows that it costs six to seven times more to get a new customer than to keep one, and in membership terms, smart associations understand what that means for retention. A dollar spent on retention goes much further than a dollar spent on recruitment. 

It goes further than current members, too. Your second-best customers are likely to be your lapsed members – strange as it may sound. Members who have left you may be the easiest to recruit again because they know you, and you know them, which is half the battle in acquisition. 

However, are these the only groups that associations should be thinking about? 

Looking Beyond Your Membership

Are members your only customers? The answer is no, but most associations don’t think that way. After all, they’re membership organizations, and members matter most. While that might be true, they’re not the only ones who matter. 

What about all the others you serve who are non-members? People who attend your events, take your training, buy your publications and more? These are your non-member customers. 

Understanding the Impact of Non-Member Customers

In purely financial terms, these customers are possibly more valuable than most of your members. How? Someone who attends two to three events each year, every year is probably contributing more revenue than a member who simply pays their dues. They will probably be more loyal than unengaged members, too. 

“But they should become members!” you say. Of course they should. They might be your best prospects of all. After all, non-member customers know you, have a relationship with you and get value from you. More importantly, you know who they are and how to talk to them. They should be prime targets for recruitment, and they are. One large engineering association tested marketing specifically to non-member customers and found they responded three to five times better than the general market.   

The Challenge for Non-Member Engagement

But what if they don’t  want to be members? This is where most associations fall down. They push the non-responders to the side and move on to the next prospective member. In reality, there is plenty of upside in growing those non-member relationships. The people most likely to come to an event are those who come to other events. People who like your events will likely enjoy your training and vice versa. Unfortunately, associations don’t think this way, so they don’t cultivate customer relationships and leave a lot of money on the table. 

Associations make significant investments in technology to manage their member relationships: to communicate with, engage and renew them. Very few make similar investments in managing relationship with non-members.  

Building a Non-Member Engagement Plan

The few who do manage their relationships with non-member customers  are generally those that don’t depend on dues revenue. Organizations with hugely successful publications or event businesses, for example, manage their customers well because that is what it takes to be successful. 

You may not be one of those organizations, but there are lessons to learn from them that will help you grow your non-dues revenue streams. So what does it mean to manage a customer relationship? Fundamentally, it means gaining insight into your current relationship and building a strategy for what you want it to be.  

Consolidating Customer Data

The first part is hard for most associations. Events, training, subscription, and membership data are usually not kept in one place. If they are, they are generally not looked at with a single view of the customer, namely, the big picture of their relationship. 

The first step would be to figure out how many customers you have. If you add up all of the people who have transacted with you in the last five years, including non-members and lapsed members, how big is your audience? Your non-member customers will likely dwarf your current membership. How much untapped growth opportunity is there?

Setting Goals for Your Non-Member Interactions

The second part of managing a customer relationship is making it into what you want it to be. What do you want from your customers besides membership? Is it to maximize revenue right now? To cross-sell your offerings? To build loyalty and repeat business? Only managed customer relationships achieve these things. Unfortunately, that is what most associations leave on the table. 

Making the Most of Your Association's Relationships

While many associations only focus on their members, a customer-centered strategy is just a mental leap away. You have thousands, if not tens of thousands, of relationships today with customers who will never be members. So how will you make the most of them? 

If your best prospects are the customers you already have, your best customers are the ones you treat like customers. If you think of membership as one opportunity among others for customers, you unlock many new avenues to deliver value and drive growth.

This article originally appeared in Sidecar as Are Your Members Your Best Customers?
For an example of explosive  growth from non-member customers, see SAE International Multiplied Non-Dues Revenue 10 Times

Are You Doing Affinity Products Wrong? Member Value Comes First

Affinity Products
Reading Time: 2 minutes

The Future Ain't What It Used To Be For Affinity Products

Are affinity products for associations a thing of the past? Or rather part of a future that looks very different?

Membership organizations have always offered third-party products to their members. This usually means a discount, sometimes bearing the association brand. Affinity products have served essential roles. They provide value to members, giving them a reason to join and renew. They also serve as a critical source of non-dues revenue. Associations could count on affinity products to boost membership and income.

No longer. Across the board, the old affinity product model is no longer productive due to market forces beyond associations’ control. As a result, what worked in the past works no longer.

Yet there is a solid and clear path forward for organizations that are open to change. For example, they can shift their expectations for affinity products from revenue to favor of member value.

The Decline of Affinity Product Revenue

    • The affinity model is unwinding. Most associations have a basket of affinity products and services that contribute to neither revenue nor member value. But the leaders have re-evaluated their portfolios and eliminated products with low member value altogether. Instead, they now offer only high-member-value products regardless of revenue potential.
    • Maximize member value. Revitalization often takes the form of drastic pruning. A successful affinity program focuses instead on a small number of “signature” offerings. These are products and services uniquely aligned with your mission. Members don’t want you to have it all. They want something that only you can offer.
    • Marketers want a better deal. It is not that marketers aren’t interested in affinity product relationships, but they don’t want to pay for them the same way. The “products as revenue” model has given way to “products as member value,” which leads to more flexible deals to secure products members love. This means trading revenue for much better products. The new model is much more attractive to marketers. It opens up a range of offerings that would have been out of reach in the old-world royalty model.
    • Better offers pay for themselves. Discounts are often one of the very top reasons members join and renew. We see more member engagement by attracting more exciting partners and offers, translating directly into higher member renewal. Even a modest uptick in retention can more than financially justify a loss in royalty revenue.

Affinity Products As Member Value Strategy

Because shifting the affinity model increased revenue for business partners, they are willing to sweeter offers for members. Better offers with stronger consumer brands also elevate the association’s brand. 

Two elements are key to successfully transforming an affinity program:

    • The Right B2B Value Proposition. Organizations must find new sources of value for their commercial partners. Cooperative marketing programs, messaging to members in non-advertising channels, and exclusive access to data are all valuable in bringing new partners to the table.
    • Meeting Unmet Member Needs. For the new model to work, associations must be selective about the offers they include. Explore the products, services, and perks that would appeal most to members and the partner brands that best compliment your organization.

Affinity products are alive and well in organizations that have embraced a “member value first” mentality. Successful associations have collaborated with their partners to create a new win/win/win. The organization, the partner, and the members all benefit from putting member value first.

To learn more about these market trends and how leading associations are responding, see Nonprofit Disruption: 5 Choices for Nonprofits   and Going Back to the Basics in the Affinity Market.