Economics of building Member

RelationshipsBy Jay T. Dziwlik, CAE, MBAjay@indental.org /@idajay

317.634.2610

Who am I?

Why are you here?

What question(s) brought you to this session and or what

answers do you need prior to leaving?

Agenda and Objectives

• Economics of Membership

• Thirty tips for developing and deepening membership relationships.

• Resources and Questions

Economics of Membership?

Why you should care

It’s Your Job….Literally

The End

High Cost of Not Retaining Membership Relationship

According to the Counselors to America’s Small Business

• For every customer who bothers to complain, there are 26 others who remain silent.

• The average “wronged” customer will tell 8 to 16 people.• 91% of unhappy customers will never purchase services

from you again.• It costs about five times as much to attract a new customer

as it costs to keep an old one.• Each one of your customers has a circle of influence of 250

people or potential customers who hear bad things about you!

Renewal Rate

Renewal Rate = Total # Members Now- # of New Members Last 12 Months/ Total # Members Last Year

Measures the number of members that you keep over a specific period of time, usually 12 months

Renewal Rate i.e. IDA

Renewal Rate = 2,847 Total # Members Now 2011 YTD- 92 # of New Members Last 12

Months/ 2,898Total # Members Last Year 2010= .951 or 95.1% or 4.9% don’t renew

Renewal Rate i.e. IVMA

Renewal Rate = 1319 Total # Members 2011- Estimated 15 New Members Last 12

Months/ 1327 Total # Members 2010= .983 or 98.3% renewal rateOr 1.7% don’t renew Wow! Excellent!

Average Tenure

Average Tenure = 1 / ( 1 – Renewal Rate )

Measures how long a member stays

IDA Average Tenure

1 / ( 1 – .951 Renewal Rate )= 20.4 years Average Tenure for IDA

IVMA Average Tenure

1 / ( 1 – .983 Renewal Rate )= 58.8 years Average Tenure for IVMA

Lifetime Value of Members

(Annual Dues + Annual purchased products/services + annual endorsement royalty income) X average number of years in

membership = Lifetime Value of Member

Example of IDA LVM

( $350 Annual Dues + $ 75 Annual purchased

products/services + $ 100 annual endorsement royalty

income) X 20.4 average number of years in

membership = $10, 710 Lifetime Value of Member

Example of IVMA LVM

( $205 Annual Dues + $ 400 Annual purchased

products/services/annual endorsement royalty income)

X 58.8 average number of years in membership

= $35, 574 Lifetime Value of Member

So, how are we doing?

• What is your lifetime value of member?

• What percentage of members do you lose annually?

• Do you know the top three reasons your members leave?

• What is your member’s #1 expectation?

• When was the last time you talked about member relationships?

Thirty Suggestions to Improve Membership

Relationships

Visit a member

#1

Ask a new member to volunteer

once

#2

Go early, mingle much

#3

Introduce members to each other

#4

Send a member a

handwritten thank you

note

#5

Write article about member

value

#6

Create at balance sheet

for dues, members and nonmembers

#7

Schedule time for member interaction

#9

Point out value to members

#10

Visit a local chapter,

society, or small group

#11

Introduce yourself to

student future members

#12

Post pictures, video from

member events

#13

Examine and develop the

“Membership Experience”

#14

Prioritize Member contact

#15

Ask members why they

joined /nonmembers

why they don’t

#16

Answer/address members questions /problems

#17

Measure member

satisfaction periodically but

regularly

#18

Tech Use/Social Media?

#19

Create a member to

member thank you call-a-thon

#20

Create a “typical”

member profile

#21

Contact a member who is

hurting

#22

Keep track of questions asked

by members

#23

Answer them don’t tell them

#24

Insure worthwhile

meetings and work

#25

Save a member time

#26

Save a member money

#27

Train your staff on membership

relationships

#28

Celebrate success with

your members

#29

Know the economics of

your membership

#30

Book Resources

• Retention Wars and Millennium Membership by Mark Levin

• The Volunteer Recruitment Book by Susan Ellis

• Generational Imperative by Chuck Underwood

Website Resources

• American Society of Association Executives – www.asae.org

• “Best Association” by Stevens and Stevens, LLC. www.bestassociation.com

Association Resources

• Look around at other boards, associations, ask members what they think.

Questions?Thank you for your attention

Jay T. Dziwlikjay@indental.org /@idajay

317.634.2610