Tony Rossell

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The Number One Mistake in Membership Marketing

Perhaps the number one mistake in membership marketing is not conducting marketing tests in each promotion. By not testing, organizations sub-optimize the effectiveness of their marketing.

My colleague, Jeremy Griffin, and one of our clients presented a case for market testing at the just concluded ASAE Great Ideas Conference. The presentation highlights the power of incorporating marketing tests in membership marketing promotions and details high leverage testing opportunities.

Here it is. I hope you find it useful.

March 12th, 2010 | Tony Rossell | Comments | Continued
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Unleash the Power of Market Testing in Your Membership Recruitment

Claude C. Hopkins is acknowledged as the great grandfather of direct marketing. In 1923, Hopkins wrote Scientific Advertising in which he declared that: “The time has come when advertising has in some hands reached the status of a science.” 1

His fundamental marketing thesis was: “We learn the principles and prove them by repeated tests. This is done through keyed advertising by traced returns . . . We compare one way with many others, backward and forward, and record the results. When one method invariably proves best, that method becomes a fixed principle.” 2

Today, his premise of testing is as true as ever. In fact, testing may even be more important now because the vast array of options available to marketers. A test can mean the difference between a stunning success for a product or an abject failure.

And because of the larger quantities and costs involved, testing is a particular necessity and an ideal opportunity when it comes to membership recruitment.

It is not uncommon to see a successful test change recruitment response rates by the following percentages:

• List tests – Can impact response by 500 percent.
• Offer tests – Can impact response by 200 percent.
• Creative tests – Can impact response by 100 percent.

These test outcomes highlight that by doing the same old thing over and over again, there is likelihood that a marketing program is substantially sub-optimizing the potential returns that could be achieved.

If testing is so important, then how should it be done?

There are two aspects of testing. Let’s call them the “art” and the “science” of testing.

The art of testing involves thinking outside the box and creating a new way to do things. In a market driven organization, each project should start up with a brainstorming session that asks: “What if?” or “How about?”

Bob Stone, in his landmark book, Successful Direct Marketing Methods, suggests creative helps like the following questions to get the thought process going. He recommends asking:

• Can we combine?
• Can we add?
• Can we eliminate?
• Can we make an association?
• Can we simplify?
• Can we substitute?
• Can we reverse? 3

Once a good set of test options has been developed, it is time to prioritize them. The key here is to test big things. Look for a breakthrough in testing. Too many testing dollars are spent on inconsequential testing – like who signs the letter. The fact is that testing small things will have such a small impact on the results that chances are good it will not have statistical validity.

In addition to brainstorming, there are some specific high leverage areas to consider testing. These high opportunity areas include the following:

Lists – One of the easiest and most productive tests is trying new lists. For a full discussion on testing lists, take a look at my post, Five Strategies for Picking the Best Marketing Lists.
FrequencyTry marketing more frequently to top prospects and customers.
Pricing and offer – Psychological price points are for real. As a rule of thumb, a price ending in a “7” or “9” will generate more orders and dollars. You can test price points by offering a special acquisition dues discount to new members.
Packaging – Test a bundled membership product instead of selling a one size fits all membership product.
Media – Many media are available today and need to be tested. Try direct mail followed by an email linked to a microsite compared to a stand alone email or mailing.
Messaging – Try new messages that emphasize a different value of membership. An easy and fast test of messages can be done with email subject lines. Send out a small portion of the list with a variety of subject lines. The group with the highest open rate wins and that subject line is used for the remainder of the list.

Equally important to the “art’ of testing is the “science” of testing. The science of testing starts with creating proper test structures. The key here is establishing a control package and testing against it. This is done by drawing a portion of names out of the control group of the marketing effort and using them for the test. Then structure the test by holding everything else constant except the variable that is to be tested. For example, if the test is for a special discount offer, then on the test segment use the same format as the control package and mail the test promotion to an equal ratio of the control lists in the mailing.

A test obviously does not always produce better returns than the existing control – that’s why to lower risks tests only go to small segments of a larger promotion. However, statisticians tell us that in each test cell we need a minimum of 40 paid responses to give us a statistically valid test. Therefore the number of anticipated responses will dictate the size of each test segment. If a 0.50 percent response rate is expected then the test cell should include a minimum of 8,000 names (40 / 0.005 = 8,000).

The other challenging yet critical component of the science of testing is tracking. Despite the difficulty in tracking, the bottom line is that the potential returns of testing are so great that one way or another an organization needs to build some kind of mechanism to track returns. Each organization will have to work with its computer staff and order processing staff to find the best way to track returns from a test. However, there are some methods of tracking used by other organizations that have performed well. These include:

• Laser Personalizing, ink jetting, or labeling the reply form with a keycode and requiring the form to be returned to receive a special offer.
• Performing a computer match between the returns from a given period of time and the keycoded mailing lists that were used in a mailing.
• Programming in a “special order code” in order forms on web sites that are required for special pricing or offers.

Once returns come back in, compare the responses in the control group against the test cell. Look to see which cell generated a higher return on investment and make the best performing test your new control.

Testing is an ongoing process. Over time, it becomes part of the culture of an organization. A focus on testing ensures the flow of new ideas and new members that an organization needs to keep growing. And it also provides a methodology for validating each of these new ideas.

To quote Claude Hopkins again, in the past: “Advertising was then a gamble – a speculation of the rashest sort. One man’s guess on the proper course was as likely to be as good as another’s . . . That condition has been corrected . . . Advertising has flourished under these new conditions. The results have increased many fold just because the gamble has become a science.” 4

Testing in membership recruitment allows your organization to market more efficiently. And if Claude Hopkins could do tests back in 1923, I am sure that there is a way to build testing into your membership marketing efforts.

1 Claude C. Hopkins, Scientific Advertising, NTC Business Books, 1991, page 213
2 Ibid, page 215.
3 Bob Stone’s landmark book, Successful Direct Marketing Methods, 1997, NTC Business Books

4 Claude C. Hopkins, Scientific Advertising, NTC Business Books, 1991, page 217-218

March 11th, 2010 | Tony Rossell | Comments | Continued
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When Cutting the Budget is No Longer the Answer

What a difference a year can make. On March 5, 2009 the Dow Jones hit a low of 6,594.44 and gloom abounded. Today the economy is still struggling, but there is light at the end of the tunnel.  

If the number of calls and inquiries that I am getting are any indication, then I think many membership organizations have realized that they have cut all of the expenses that they can. The only option now for fiscal health is to grow revenue.

A recent article in Industry Week by Cory VanBuskirk echoes this perspective.

“Here’s the good news:” he writes, “So far, you’ve been able to survive one of the worst economic downturns in American history. Before you congratulate yourself, you need to face the bad news. The very things that have enabled you to survive will cause your downfall if you don’t shift into growth mode now.”1

VanBuskirk goes on to say, “If you’re going to make a successful shift back into growth mode, you have to retool the organization for driving revenue vs. saving money. It’s time to realign people from efficiency to customer-driven effectiveness. Don’t underestimate the differences between these two approaches. Resources, talent and priorities must flow toward revenue drivers.”2

Have you and your organization made the shift from cost cutting to growth? If you are ready to start growing, here are some tips on where to start.

• Do not judge the health of membership by your renewal rates. Renewals are a lagging indicator for membership in this economy. Judge your economic situation based on new member input.

• Get the jump on adding new members. Just like you, prospective members are looking for a resource to leverage their own growth. Almost everyone I speak with is seeing improvement in membership acquisition right now. In fact, acquisition is actually producing comparatively better results than renewals for most membership organizations.

• Reach out to the members who left your organization during the recession and see if they are ready to come back. They need to grow just as much as you do.

• Grab talent now while it is available. Whether this means adding key staff or bringing on consultants, now is a great time to leverage top people resources to get momentum going in the right direction.

Please feel free to add any tips you might have in the comments section.

1. How to Survive Your Survival: The keys to successfully shifting into growth mode, Cory VanBuskirk, CVB Consulting Group, Industry Week March 10, 2010.

2. Ibid.

March 11th, 2010 | Tony Rossell | Comments | Continued
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Testing a Free Trial Membership Acquisition Program

There is a long history of using free trial offers in membership marketing. In essence a free trial offer substitutes providing member services for marketing efforts. It is an attempt to have the product sell itself.

I thought that I would highlight four basic methods that I have used or observed others use to bump up membership returns using trials. By doing some quick calculations, you can determine if one of these methods might be good to try.

1. Opt-in Trial: This method is perhaps the most common in membership marketing. The option features and initial promotion to prospects and asks them to accept a membership trial. Upon acceptance, the respondent receives membership for a specified period of time and additional promotions requesting that he or she join. Depending on the quality of the list, the initial response can be between three and five percent. The final conversion can be about 30 percent. The advantage is that you are only providing free services to a low number of prospective members and converting a larger portion of them.

2. Force Free Trial: This method provides a free-trial to a qualified audience that did not specifically ask for the trail. It may be a list that you have compiled or that is supplied to you by some other source like current members. Services are provided to these prospective members for a period of time and then these prospects are asked to convert to a paid status. The final conversion rate from a well qualified list can be about 10 percent. One challenge to this method is that you are providing services to a much larger group with a proportionately lower level of payment because they never directly requested the membership trial.

3. No-Obligation Trial: Like the opt-in trial, this method gives a prospective member the choice to ask for benefits. But there is one key difference. When a prospect agrees to this trial, he or she also agrees to allow the organization to invoice them for the membership. The respondent has the choice to pay an invoice or write “cancel” on the invoice and owe nothing. Getting permission to invoice can dramatically increase the final paid rate especially if the prospective member can submit the invoice for company payment. The initial response to this type of offer can be one to three percent. However, the final payment rate can be as high as 50 percent.

4. Negative Option Free Trial: This is a method that I have not used, but it is becoming increasingly common. Under this method, when a free trial is accepted, the respondent provides their credit card information and has a limited period of time to evaluate the membership. If the trial is cancelled by the respondent, there is not charge. However, if no notice is given then the respondents credit card is charged for the membership.

In the March 2010 edition of ASAE’s Membership Developments newsletter, Karen Krzmarzick, CAE, the Executive Director, of the American Society of Ophthalmic Administrators (ASOA) reported on her success with one free trial method. By my definition, ASOA tried both a force free trial and opt-in trial approach.

For the force free trial, ASOA “sent individual emails out to each physician member of ASCRS [a partnering organization] asking for the name of physician’s practice administrator. These individuals where then automatically signed up for the free trial program. “

Also, as an opt-in approach, ASOA said that they “placed ads on our website and promoted the program through business-reply cards in industry magazines.”1

ASOA was encouraged by the outcome. Overall membership is growing. They reported 700 current free trial participants and a conversion rate of 11 percent to membership.

However, what works for one organization may not work for another. If an organization has a large potential market and a low dues rate, for example, the force free trial may be far too expensive to deploy. On the other hand, in a small niche market, getting only 3 percent of the market to try a free trial may not produce the volume of new members needed to grow.

Here is the bottom line, always run the numbers for your particular situation before launching a new membership marketing initiative.

1. ASAE Membership Developments, March 5, 2010, http://www.asaecenter.org/files/images/sectionnewsletters/md0310.pdf

March 5th, 2010 | Tony Rossell | Comments | Continued
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Last Chance to Participate

We are closing the questionnaire for the 2010 Membership Marketing Benchmarking Survey. But before we do, I wanted to give you one last chance to participate.

This is the second year we are conducting this research. And by completing the survey, you will receive a free copy of the final report. The report will include a trend analysis of what has changed over the past year and highlight key data on what associations are doing in membership marketing and what practices correlate with better renewals and more members.

Please take a moment now to complete the survey. It should only take 10 minutes.

You can participate using this survey link.

February 25th, 2010 | Tony Rossell | Comments | Continued
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Your Feedback Requested

Over the next couple of weeks, I am beginning to work on the questionnaire for the 2010 version of the Membership Marketing Benchmarking Survey.

As I get started, I would appreciate your feedback on what new benchmarking data might be of help to you and your organization. Some portions of the survey will be repeated from this year to allow for trend analysis, but I also want to add new elements that give you statistical data for questions you might have.

So if you have the opportunity, please feel free post a comment here with your suggestions of any membership marketing areas for which you want additional benchmarking information.

If you would like to take another look at the 2009 Report, here is the link to download a copy: http://www.marketinggeneral.com/accessWp.asp.

My goal is to build the questionnaire over the holidays and your feedback will be a big help.

February 25th, 2010 | Tony Rossell | Comments | Continued
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2010 Membership Marketing Benchmarking Survey: Please Participate

We have just launched the questionnaire for the 2010 Membership Marketing Benchmarking Survey and I want to invite each of you who work for a membership organization to participate.

As you may recall, last year, our survey provided critical comparative data on how organizations recruit members, engage new members and renew their members. This year the report will add trend analysis and segment membership organizations by industry.

The survey gives you a chance to benchmark your organization against nearly 500 other associations.

You can participate using this survey link.

To thank you for your participation in this best practices research project, I will send you a copy of the final report from this study. No specific responses will be reported from any individual or association without your specific written consent. Your participation is much appreciated.

February 25th, 2010 | Tony Rossell | Comments | Continued
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2010 Membership Marketing Benchmarking Survey: Please Participate

February 16th, 2010 | Tony Rossell | Comments | Continued
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Updated Link

February 12th, 2010 | Tony Rossell | Comments | Continued
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How to Calculate where your Membership is Headed

February 6th, 2010 | Tony Rossell | Comments | Continued
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How to Calculate where your Membership is Headed

Last month was really busy. I met with many organizations who are looking for help after a distressing 2009. And some of them do not realize just how much trouble they may be in going forward.

When I meet with groups, I use a simple method to calculate where their membership is headed given their current metrics. It is called a Steady State Analysis.

Using your current data, you can also do this analysis to see what the ultimate equilibrium of your association membership count will be. You can also use the analysis to model where it might be if you add more new members or have higher renewals.

To do the calculation, you only need two numbers; your renewal rate and your total new member input from the past year. Here is how it works. You take your new member input from the past year and divide it by your lapse rate presented as a decimal. So if your renewal rate is 80%, then your lapse rate is 20% or .20.

For example, 20,000 New Member Input / .25 Lapse Rate = 80,000 Steady State Total Membership.

Here is the formula: Annual New Member Input / Reciprocal of Renewal Rate (or Lapse Rate) Shown as a Decimal = Total Membership Steady State.

Here are three examples of how you can project your future membership.

• A 75% renewal rate and 8,000 new members per year will result in a steady state membership of 32,000 members
• An 85% renewal rate and 2,000 new members per year will result in a steady state membership of 13,333 members
• An 80% renewal rate with 5,000 new members per year will result in a steady state membership of 25,000 members

One other thought to consider. From my personal observation, the organizations that I am seeing in the most distress are those that pulled back from marketing this past year. Groups that continued to aggressively market membership actually came through the year in much better shape. This confirms some of the research that we shared at the start of this recession.

February 5th, 2010 | Tony Rossell | Comments | Continued
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Is your SEO Really Optimized?

February 4th, 2010 | Tony Rossell | Comments | Continued
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Is your SEO Really Optimized?

Do you think that your Search Engine Optimization (SEO) is doing great? Well it may not be doing as well as it appears to you.

I missed this news around the holidays, but amidst Google’s China news, they also announced that they were moving everyone to personalized search results.

As they noted on their blog, “Today we’re helping people get better search results by extending Personalized Search to signed-out users worldwide, and in more than forty languages. Now when you search using Google, we will be able to better provide you with the most relevant results possible.” In the past, Google only offered personalized search to signed in users.

This might be great for you if you frequently look for certain topics. But it can really fool you if you are trying to monitor the SEO of your site. If your site comes up first every time when you search on key words, it does not mean that it is happening for anyone else. Personalized search may cause your site to come up first because that is what you have clicked on in the past. But for someone else, it your site may show up much lower on the page. 

There is a way to disconnect personalized search. Here is the link to learn how to do that.

The bottom line is that with a Google search what you see is not what others may get.

February 4th, 2010 | Tony Rossell | Comments | Continued
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The Pathway to being a Remarkable Association

January 30th, 2010 | Tony Rossell | Comments | Continued
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The Pathway to being a Remarkable Association

Next week, I have the opportunity to do a presentation taking a look at the future of associations. I will start the talk by reviewing the past. Specifically, I am going over the findings of ASAE and The Center in 7 Measures of Success: What Remarkable Associations Do that Other Don’t.

As you may recall, this book resulted from a thorough study under the guidance of Jim Collins (Good to Great) comparing 18 matched associations. “The project’s value lies in discerning the often subtle differences between two well-matched organizations – what one association did or didn’t do to give it a performance or financial edge on its counterpart” (page 8).

I think the findings of this study are as valid today as they were in 2006 when the book was published. Here is a short review of the Measures of Success.

1. A Customer Service Culture — “Remarkable associations build their structures, processes, and interactions – their entire culture – around assessing and fulfilling members’ needs and expectations” (page 24).

Customer service goes beyond customer satisfaction. In fact, we do not even ask customer satisfaction questions on surveys because we find that lapsed member report virtually the same level of satisfaction as current members.

2. Alignment of Products and Services with Mission — “Remarkable associations speak passionately about fulfilling their mission and constantly test their ideas for products against that mission, using it as a touchstone for everything they do. . . To find the right mix of products . . . remarkable associations engage in experimentation” (page 28).

The goal for an association is to become an indispensible resource for a member. I think this comes from focusing on the three drivers of engagement, vision, reward, and relationship.

3. Data-Driven Strategies — “If there is one phrase that sets remarkable associations apart from their counterparts, it’s ‘data, data, data.’ They gather information, analyze it, and then use it to become even better” (page 38).

As an example, just in the area of membership recruitment, testing and then analyzing data can commonly improve performance as follows:

• List tests – Can impact response by 500 percent.
• Offer tests – Can impact response by 200 percent.
• Creative tests – Can impact response by 100 percent.

4. Dialogue and Engagement — “Many with the study group would no doubt echo the employee at the Society for Human Resource Management (SHRM) who said, ‘We all discuss decisions openly with each other. We have a desire to collaborate with each other, and we do it in mission-driven ways” (page 44).

SHRM membership is reported to have grown by from 36,000 in 1992 to over 250,000 today. Need I say more?

5. CEO as a Broker of Ideas — “While CEOs may be visionary leaders, what’s more important is their ability to facilitate visionary thinking throughout the organization” (page 49).

We are in a knowledge economy. The organizations and clients that I have seen thrive have a culture of ideas. Ideas are the currency in the organization.

6. Organizational Adaptability — “Our data confirmed that no organization – regardless of how remarkable it is – can predict change with full accuracy and therefore be on target with its response . . . Our data indicate that remarkable organizations do not panic . . . They maintain a clear understanding of their core purpose” (page 58-59).

Remarkably through this recession, we have seen a consistent trend that organizations that stayed in the market and continued to reach out to prospective members came through the past year in good shape.

7. Alliance Building — “[Remarkable associations are] secure in who they are and what they bring to the table, these associations communicate clear expectations for each specific partnership and do not hesitate to walk away if a win-win situation does not materialize. But they’re also willing to admit what they can’t do on their own.”

Everyone wants to partner with successful organizations. Be sure to look in the mirror before you propose an alliance.

January 29th, 2010 | Tony Rossell | Comments | Continued

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