Yes Marketing Works

The other day, I received a comment from the CEO of an organization that basically said, “Hey, your marketing didn’t work”.

Marketing done properly provides statistically projectable outcomes that can be done with great precision. If variables are held constant, a mailing list or direct mail package that worked in the past will continue to perform more or less at a predictable level when you allow for some statistical flux.

For marketers, the challenge comes when you do not have a marketing history on which to build your projections. You do not know what lists, offers, messages, or timing are best for a given product or organization. It is like a doctor doing a diagnosis without any of the tools of modern medicine.

You need to set some goal or outline an expected return, so you use results gathered from similar organizations or experiences. You ground your projections with the best information that you have at the time.

But basing projections solely on other organizations and experiences is a very poor substitute for real response data. On any new product or client launch without historical data, you are jumping into the unknown. You are taking a risk. It usually is better to try something than to do nothing, but it is a risk.

You may hit a home run, but you also better be prepared to hear, “your marketing doesn’t work”.

Solutions to a Declining Membership

Back in April, I wrote a post titled, “What are the Biggest Impediments to Membership Growth?”

However, I did not talk through potential solutions to these impediments. So here we go with some thoughts on what to do about a declining membership.

I have been doing membership consulting for over twenty five years. During this time, I have noticed that organizations tend to react to membership declines with two types of responses.

The first response is to demand action now. An organization might say, “Our membership numbers are down. We need to send out emails tomorrow to get the numbers up for the month!”

The second reaction that I see is avoidance. “Our membership numbers are down. But I cannot get the staff, chapters, or board to do anything about it.”

Neither of these reactions tends to bring long term solutions to a membership problem. What I have found works best is to help an organization step back and see the big picture and then develop a systemic solution to fixing the problem.

A classic treatise that speaks to these organizational tendencies is a book by Peter Senge titled, The Fifth Discipline: The Art and Practice of The Learning Organization. In the book he applies the concept of systems thinking to help organizations respond effectively to the challenges that they face.

Systems thinking highlight the inadequacies from the response that says “do something now” or simply work harder to solve the problem. This organizational response generally results in just kicking the can down the road. System thinkers call this “just push harder” reaction “compensating feedback”. This is “when well intentioned interventions call forth responses from the system that offset the benefits of the intervention. We all know what it feels like to be facing compensating feedback – the harder you push, the harder the system pushes back; the more effort you expend trying to improve matters, the more effort seems to be required.”1

In fact, Senge maintains, “pushing harder and harder on familiar solutions, while fundamental problems persist or worsen, is a reliable indicator of nonsystemic thinking – what we often call the ‘what we need here is a bigger hammer’ syndrome.”2

Systems thinking also speak to the avoidance or victim response to organizational challenges by helping to uncover high leverage solutions to a problem.

A basic premise of The Fifth Discipline is that organizations, economies, and people naturally grow as long as the things preventing that growth are removed. Senge says, “Don’t push growth; remove the factors limiting growth.”

“Systems thinking shows that small, well-focused actions can sometimes produce significant, enduring improvements, if they’re in the right place. Systems thinkers refer to this principle as ‘leverage’. Tackling a difficult problem is often a matter of seeing where the high leverage lies, a change which – with a minimum of effort – would lead to lasting and significant improvement. The only problem is that high-leverage changes are usually highly nonobvious to most participants in the system.” 3

So from a practical perspective instead of treating just the symptoms of a membership problem or being in denial what should one do? How do you bring a systems thinking solution to the problem?

A tool that I recommend to help diagnose a membership challenge from a systems thinking perspective is using a concept called the membership lifecycle.

The lifecycle breaks down each stage of the membership relationship. What I find is the most membership problems exist in one of the five lifecycle stages of awareness, recruitment, engagement, renewal, or reinstatement. Identifying the root membership problem can lead to a highly leveraged or efficient solution.

You can download a free whitepaper that outlines this concept using this link.

There is hope for a declining membership. Don’t give up. Step back and identify the key impediment to growth and work on fixing that nonobvious problem first.

1. The Fifth Discipline: The Art & Practice of The Learning Organization, by Peter M. Senge, p 58.
2. Ibid. p. 61
3. Ibid. p 63-64

Using Market Segmentation in Membership Marketing

Everyone talks about the importance of market segmentation, but I find that not everyone knows what they mean when they use the term.

Let’s start out by saying that market segmentation is a tool not an end in and of itself. You use market segmentation to help accomplish an objective like improving response rates by targeting messages or providing differentiated value to a certain group of members to enhance retention.

So before jumping into segmentation, the first step is to define what you want to accomplish and then see if the tool of market segmentation will help you achieve your goal.

If you determine that segmenting your market is appropriate, then it is helpful to further define what segmentation will be practical and useful to accomplish your objective.

Here is one way to classify the segmentation options available.

1. Linear Segmentation – This is as simple as splitting your market into two groups. For example, it probably would not be practical to create hundreds of versions of a monthly print magazine, but you might create two versions to serve some natural split in your membership like students and professionals, owners and operators, manufacturers and distributors. You might describe this as a “one to two” segmentation strategy.

2. Group Segmentation – This segmentation splits your market into specific groups or buckets of people. For example, based on state and local issues, you might provide separate marking messages driven by geography to enhance relevance. Or your segmentation might be driven by categories of products previously purchased. You might describe this as a “one to some” segmentation strategy.

3. Granular Segmentation – This type of segmentation results in unlimited options for your market. For example, based on a purchasing history an algorithm can be built to push a shopping cart of specific items that would be customized for each individual – think Amazon book offerings. Each member could receive a unique offering based on their preferences or previous behavior. Many marketers describe this as a “one to one” marketing strategy.

Granular segmentation is obviously more complex than linear segmentation. But that does not mean that one is better than the other. Remember, as with any tool, the key is using the correct tool for the job.

Segmentation can add to incremental costs for marketing or servicing a member. It also takes time to craft and maintain variable messages, services, and fulfillment operations. So before embracing a segmentation model, it is wise to evaluate both the positive effects it could have and the added costs it will create.

What examples do you have of successful segmentation programs? Feel free to share them here.

Associations Report Jump in New Members, Renewals, and Total Membership Counts

Membership organizations reported a triple play in membership numbers in the soon to be released 2011 Membership Marketing Benchmarking Report.

From this year’s survey, which included 650 participating associations, the major indicators of membership health – total membership, new members acquired, and membership renewals – all showed substantial improvements from the previous year’s benchmarking report.

A total of 49% of respondents said that they had recorded an overall increase in members over the previous twelve months. This is a substantial jump over the 36% who reported membership growth the previous year (see chart).
Growth in new member recruitment appears to be a big driver in membership growth.  Of responding association executives, 57% report the acquisition of new members increased over the past year.  These results are significantly better compared to both 2010 and 2009.
Finally, the survey results also highlight that membership renewals had a more positive outcome this past year with 32% of respondents saying that they have had an increase in overall renewal rates.

The 2011 Membership Marketing Benchmarking Report will be released on August 6th with full results being provided to survey participants.