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?
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.
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.
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.
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 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.
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?
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.
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.
Chris Vaughan, PhD, is the Chief Strategy Officer at Sequence Consulting, which has helped associations and nonprofits of all sizes grow their audience and revenue through innovative strategy and marketing since 2001. His clients include AMA, AARP, United Way, Make-a-Wish, American Lung Association, and the Jewish United Fund, and many others. For more information on how top associations are using lessons learned during the pandemic to transform their content strategy, download Sequence Consulting’s report here.
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