In the coming months, I am presenting two sessions on the
transitions and opportunities that are taking place in the packaging of
association memberships, otherwise known as membership models.
What an increasing number of organizations are doing is
re-packaging their traditional membership offering to appeal to new market
segments and to adjust to new business realities. They are encouraging the
market to drive their membership product instead of their bylaws.
There is one change in particular to highlight. An increasing number of individually based associations
appear to be offering both individual and institutional membership instead of
the traditional clear delineation between an individual membership and company
or institutionally based structure.
In fact, since starting our Membership Marketing
Benchmarking research, the proportion of associations reporting that they offer
a combination or “hybrid” membership has gone from 17% to 28%. And as the chart below shows, this has been
accompanied by a drop in associations’ reporting that they only provide
individual membership from 54% to 44%.
When one looks at the outcomes of adopting this hybrid
membership model, one can also see the wisdom of considering of these
changes. In my consulting experience, it
is not unusual to see organizations that offer both individual and
institutional membership options achieving five to ten points’ better renewal rates
with their institutional membership offering compared to their individual
membership. Additionally, our 2014
Membership Marketing Benchmarking Report highlights the mean renewal rate for
individual membership associations is 76% and the mean for combination
associations is 80%. Both, however, fall
short of the mean renewal rate for trade or institutionally based associations
of 85%.
Perhaps the reason for these better renewal rates is an institutional
membership will typically be paid from a company budget, not out of an individual’s
wallet. Also, an institutional
membership obviously supplies benefits to multiple people adding to the
potential endorsers of continuing the membership relationship.
Finally, offering a combination of membership may help with
recruiting new members. Our research
shows that combination associations were more likely than both trade and
individual membership organizations to report an increase in new members over
the past year.
One of the 4 P's of marketing is "product", so
adjusting the membership product to meet the changing market conditions is an
important strategy for associations. One
of these adjustments to the membership model that seems to have been
beneficial, in particular for individually based associations, is offering the
option for the members’ companies or institutions to join and hold the
membership as an organization.