How membership is presented is also important when promoting to prospective members.
So when I came across some behavioral concepts from the consumer market in the Mckinsey Quarterly magazine, I thought that they could be applied to how we market and present our membership product. Here they are.
1. Offering payment terms – Many organizations find that adding a bill-me to a membership promotion or offering installment billing can improve responses. In fact, over 45% of associations report that they now offer a dues installment payment option. Similarly “retailers know that allowing consumers to delay payment can dramatically increase their willingness to buy. One reason delayed payments work is perfectly logical: the time value of money makes future payments less costly than immediate ones. But there is a second, less rational basis for this phenomenon. Payments, like all losses, are viscerally unpleasant. But emotions experienced in the present—now—are especially important. Even small delays in payment can soften the immediate sting of parting with your money and remove an important barrier to purchase.”1.
2. Offering a tiered membership with lower and higher priced options – I have commented in the past on the benefits of developing a tiered (or multi-level) membership product. These tiers allow a member to pick the best value for themselves and allow the organization to maximize its share of wallet. As an example from the retail world, “many restaurants find that the second-most-expensive bottle of wine is very popular—and so is the second-cheapest. Customers who buy the former feel they are getting something special but not going over the top. Those who buy the latter feel they are getting a bargain but not being cheap.” 2.
3. Bundling diverse additional services into a membership package – The opposite problem of having only one membership category is having a membership with lots of choices like interest sections, local chapters, and optional periodicals. This complexity can actually reduce response rates. In fact, “reducing the number of options makes people likelier not only to reach a decision but also to feel more satisfied with their choice.”3.
Trying new ways to present membership really comes down to making the buying decision easier for a prospective member. We make it easier for them to buy if we offer payment over time and if we give a member a product that both meets a member's diverse needs, but also is not too complex or cumbersome to purchase.
What other suggestions do you have to better present membership in your organization?
1. Ned Welch, A marketer’s guide to behavioral economics, McKinsey Quarterly, February 2010.
Originally posted @ Membership Marketing Blog
Wednesday, December 29, 2010
Thursday, December 23, 2010
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Another entry in my irregular "What I highlighted and why while reading Here Comes Everybody" series.Our social tools are turning love into a renewable building material. When people care enough, they can come together and accomplish things of a scope and longevity that were previously impossible; they can do big things for love.When I read this, I immediately thought of Jamie Notter and how often he talks about the importance of love/passion to what we do. I quote:
Shirky, chapter 5, page 142.Passion matters. Yes, it opens up opportunities for let-downs and heartache. But that's the price of admission to a world where more gets done, and potential is realized, and synergy is actually accomplished, not just referenced in a keynote speech. Don't let the hard parts of passion scare you away. Stay with it and marvel at where it takes us.At Tech10, I had the opportunity to sit in on the Open Community fireside chat, and this topic came up there as well as part of a discussion of chat participants' experiences with online communities over the years. The number one thing that distinguishes successful online (or even real life) efforts is that people CARE.
So that raises a key question for associations: do you know who cares about your organization, among your staff, volunteers, members, and other supporters? Because I assure you that not everyone does. Some of your staff members just want a paycheck. Some of your volunteers just want a line for their resume. Some of your members renew out of habit. Some of your supporters are there purely for selfish reasons. But not all.
The people who care are critical to your association. And they're likely going to be some of your most vocal critics, too. Why? Because if what you do or don't do didn't matter to them, they'd just let it slide. And because they DO care, they are your engine for growth, for change, for innovation and for improvement.
Make sure you know who they are. Make sure you know what they want and can do. Make sure you listen to them and make use of their energy. And, particularly at this time of year, make sure you say thank you in ways that are meaningful to them. Without them riding your ass, as painful as it can be, you'd never get anywhere.
Wednesday, December 15, 2010
“Why don’t the small associations just merge?” fumed one Realtor association leader. “Get it over with. We only need a couple of associations in this state anyway. The rest of them just suck up good resources for no real reason.”
There are a couple of implications in that statement—which we’ve all heard many times from Realtors AND association staff—which are at best disturbing.
The first is the implication that there’s no real good reason for real estate business associations to exist on a community level. “Merger” assumes a wider geography and an aggregation of societal cultures: we need to examine thoughtfully whether these are the ingredients of a successful community of cooperating competitors. “Real Estate is local”, we’ve always said. Suddenly now it is not? In fact I think a real estate business community is quite local—it is more than just a broader data access. A real estate association is a business community whose members must, in fact, cooperate to get the job done for the buyers and sellers. It is a business community in which members must trust one another, and it is a community which understands and supports local business protocols and traditions.
The second problem with the opening statement is the assumption that a merger is the only answer to a more effective organization. Building a local business community aside, in many cases mergers are certainly not the one-size-fits-all answer to solving the problems of the US Realtor organizations.
(Let’s start with a central premise here: I’m not talking about MLSs. I think there are certainly good reasons why MLSs don’t need full-blown mergers, either, but for purposes of clarification and focus, I am speaking now of local membership associations. )
Recently a consultant asked AEs to answer a survey about whether or not they had examples of successful or unsuccessful mergers in their Realtor organizations. “I dunno,” one of my friends responded. “We merged three associations. We didn’t un-merge. I guess that’s a success story.”
Still being together after all these years is not necessarily a hallmark of success, I think. I am reminded of marriages in which couples spent unwholesome years together ‘for the sake of the kids’ (who breathed a sigh of profound relief when the charade was over). In fact, a merger is only successful if the aggregate volume of work of the combined associations actually increases as a result of the merger, resulting in increased utilization of assets, or if the quality of work and member benefits dramatically increases, raising the members’ perception of their return on their dues investment.
Of course one of the most cited reasons for merging organizations is in reality a myth: overhead costs almost never decrease. Economic surveys indicate that there are few economies of scale (unlike, say, manufacturing) in providing professional services. In addition large organizations spend more per member on overhead than do smaller ones. And the transaction costs (legal, consulting, members’ time and staff overhead) incurred in a merger frequently result in decreased margins in early years.
Valid reasons for merging must be examined closely. Some of those reasons might include what I call ‘offensive’ strategies (the combined organizations can offer measurably better member services or open new markets for current services) or defensive strategies (the combined organizations can downsize operations or fill in gaps in physical and/or volunteer resources). Poor reasons for mergers include: economies of scale, personal ego fulfillment of leaders or staff, getting bigger just to get bigger,’ because NAR said so’, or building a reputation as a full-scale service provider (the old “My Board is better than your Board” refrain).
It’s important to recognize that even when there is sound business reasoning behind a merger, there is still danger in some attendant risk factors, including
Member reaction and loyalty to the new entity
Culture clashes of the merger partners
Incompatibility of management or leadership styles
Economic disparities and dues structures
Conflicts of interest, both business and association-based
Personalities of the professionals, particularly larger brokers and top producers
Post-merger shake out of productive staff , affiliates, vendors, and other partners
Disparate organizational debt, retirement obligations and staff benefits, or capitalization
An overly-large and cumbersome governance structure created to be ‘fair’ to merged parties, but without thought as to efficient and effective decision-making .
In short, there are no easy answers to Realtor association viability—certainly the currently popular merger solution should be examined most carefully. Better results in achieving an association mission might be available through a variety of alternative methods: joint ventures, strategic alliances, service cooperatives, fiscal sponsors, and a myriad of other ways of partnering to achieve results.
There are profound reasons for maintaining and growing a local real estate community, just as there are excellent defensive and offensive business alternatives which can strengthen an organization and prepare it for the future. Due diligence on the part of leaders and managers would suggest an association explore these alternatives, testing them for potential synergies and pitfalls. The merger solution, if one is still needed, can occur at a later time, and with full knowledge of the consequences.
Thursday, December 2, 2010
if NAR loses this battle over the MID, I expect either one of two things: (a) a re-energized NAR, with a smaller membership base but one that is on fire, focused and dedicated to policy matters, that will come out roaring in 2012 during the Presidential election year and grabs back the reins of power; or (b) a depleted NAR that accepts itself as a tier-two political power in Washington, and devolves into a sort of a social club for real estate agents which gives out some awards, offers some group discounts to its members, and holds a really nice party twice a year.