PRESENTATION TO THE INFORMS BOARD

Aug 7, 2006

Informs Membership Committee

Strategies for Group Memberships

AGENDA

Introduction & Motivation

Group Membership

Tell-a-Friend Campaign

Corporate Membership

Other Membership Ideas

MOTIVATION

New ways to stimulate and expand our membership base

Possible new revenue streams

Greater exposure to wider audience

Provide more options to our current members

Group Memberships

Exploring the possibility of an Informs Group Membership

GROUP DISCOUNT ON MEMBERSHIP

Idea Members join as a group and receive a discount

Goal Increase membership without hurting revenue

Incentives Reduced costs and peer pressure

KEY QUESTIONS

• Group rules:– Any restrictions?– How sign up?

• Discount policy:– On what?– How much?

• Group demographics:– How large?– Ratio new / existing?

• Price sensitivity:– New members?– Existing members?

Decision variables Data

ANECDOTAL DATA

Informal survey of academic and practice colleagues

• Wide range of potential group sizes (3 to 100’s)

• Current participation moderate (25% to 75%)

• Low price sensitivity (≥ 50% discount on membership dues, heavy discount on practice conference)

ACORD survey of academic department heads

• Reaction was unfavorable

Opinions of membership committee members

A Simple Break-Even Model

New Members Required Per Existing Member

-

0.5

1.0

1.5

2.0

2.5

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Total Discount

THE DEVIL IS IN THE DETAILS If one check per organization:

• How can grant money be used?

• Risk losing entire group if lead departs?

• Can new members join after the fact?

• Not allowed by some schools (SMU)

If individuals enroll with a group #:• How know final group size?

• How enforce restrictions?

• Do we allows refunds?

How construct the discount policy?• Same for all member types?

• Does it include full benefits?

• Is there an increasing discount schedule?

BENCHMARKING OF OTHER SOCIETIES

Of the 25 societies investigated:Only 1 offers a generic group discount

• $10 application fee waived if ≥ 15 join as one transaction

11 offer corporate memberships• Emphasis on visibility for the company and revenue

for the society

5 offer academic memberships• Emphasis on full set of publications

• Often provide free student memberships

Many of these programs are highly customized

RECOMMENDATION

A generic group membership program appears risky

Consider more tailored alternatives:• Tell-a-friend program

• Corporate membership

• Customized group membership

Tell-a-Friend Campaign

“Am I not destroying my enemies when I make them my friends?”

Abraham Lincoln

Tell-a-Friend Campaign

Idea When current INFORMS members renew, they can sign up or refer a new member at the same time.

Goal Increase membership without hurting revenue

Incentives Rewards & Prizes for attracting new members, rewards for new members

Tell-a-Friend Incentive Options Discounts

• __ % discount on membership fees

• First __ months free access to PubsOnline – low cost, sink the hook

Single vs. multi-year options

• Smaller incentive for 1-year membership; larger for 2-3 year signup

• Allows conference networking and journal familiarity to take root

Tell-a-Friend Incentive Options (con’t)

Chapters to run local drives

• Boost chapter fees to fund activities

• ASA example: http://www.amstat.org/membership/cgm/index.cfm

Prize drawing

• Referrer’s name in hat for each new member

• Fewer, significant prizes to create buzz, without large total cost

• Ex: Conference fee waived, conference airfare for sig other, etc.

• Ex: “Science of Better” coffee cup for all referrers

• See attached model for example detailsTell-a-friend prize

model

Prize ExpensesQty Value Cost Expense

Conference fee waiver 1 $950 $950 $950Conference flight 2 $500 $500 $1,0001 year PubsOnline subscription (max 100) 100 $190 $40 $4,000"Science of Better" coffee cups for all referrers 203 $5 $10 $2,026Total expense $7,976

Regular Student Practice Total49% 21% 30% 100%

Current membership (2005) 4,964 2,127 3,039 10,130

Percent of current members referring a new member 2.0%Referrals as new members 99 43 61 203

Margin contribution per new member $334 $54 $255 (from Group Membership model)Probability that new member would have joined anyway 50% 50% 50%New margin contribution due to tell-a-friend event $16,579 $1,149 $7,749 $25,477

Net Gains $17,501

Tell-a-Friend Prize Drawing Option

(@ 2% referral rate)

Pct Referring Net Gains0.1% ($1,183)0.3% $3521.0% $5,7752.0% $17,5013.0% $29,2265.0% $52,677

Breakeven @ 0.3% referral rate

Qty Value Cost ExpenseConference fee waiver 1 $950 $950 $950Conference flight 2 $500 $500 $1,0001 year PubsOnline subscription (max 100) 100 $190 $40 $4,000"Science of Better" coffee cups for all referrers 203 $5 $10 $2,026Total expense $7,976

Membership Gains Academic AcademicRegular Student Practice Total

49% 21% 30% 100%Current membership (2005) 4,964 2,127 3,039 10,130

Percent of current members referring a new member 2.0%Referrals as new members 99 43 61 203

Margin contribution per new member $334 $54 $255 (from Group Membership model)Probability that new member would have joined anyway 50% 50% 50%New margin contribution due to tell-a-friend event $16,579 $1,149 $7,749 $25,477

Net Gains $17,501

Corporate Memberships

Exploring the possibility of an Informs Corporate Membership

PROPOSAL

Explore the possibility a Corporate Membership option for INFORMS membership

Greater visibility within the Informs community Access to Informs resources and expertise Ease of membership application/payment Collaboration Opportunities

To INFORMS:

To the Corporation:

Value Proposition

Increased revenue Increased awareness of the society at a corporate level Greater Membership Options for members Greater recognition of the profession

Possible Corporate Membership

• Included # of Memberships into the society

• Additional discounts for subsequent members

• Hard copy of all journals/access to pubs online?

• Logo on promotional material or website

• Special Event for Corporate Members

• Discount at conferences

• Discount on publicationsRoundtable Membership:• $1500/year• Separate conference and reception• One Informs Membership Included• Membership in CPMS• $100 discount for conference fees• No other discounts/memberships

Other Societies Offering Corporate MembershipsOrganization Abbr/Link

American Institute of Aeronautics and Astronautics AIAA

American Institute of Architects AIA

American Management Society AMA

American Mathematical Society AMS

American Society for Quality ASQ

American Statistical Association ASA

Institute for Operations Research and the Management Sciences (Roundtable) INFORMS

Institute of Business Forecasting IBF

Institute of Industrial Engineers IIE

National Society of Professional Engineers NSPE

Operations Research Society of Japan ORSJ

Society for Industrial and Applied Mathematics SIAM

Microsoft Word Document

Benchmark report of Other Societies(click icon to open, in non-viewer mode)

INFORMS Current Company MembershipEmployer

1 IBM

2 United States Army

3SAS Institute Incorporated

4 United States Air Force

5 Mitre Corporation

6 Boeing Company

7 Booz Allen & Hamilton

8 Intel Corporation

9United States Military Academy

10 ILOG Incorporated

11United States Air Force Academy

12General Motors Corporation

13 AT&T Laboratories

14 Hewlett Packard

15 United States Navy

16 American Airlines

17Lockheed Martin Corporation

18 United Parcel Service

19 IBM Research

20IBM TJ Watson Research Center

To

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Number of Members

Number of Companies

Percent of total

Percent with greater than one member

greater than 30 5 0.3% 1.5%

between 25 and 30 3 0.2% 0.9%

between 20 and 25 3 0.2% 0.9%

between 15 and 20 7 0.4% 2.1%

between 10 and 15 14 0.8% 4.1%

9 3 0.2% 0.9%

8 7 0.4% 2.1%

7 12 0.7% 3.5%

6 17 1.0% 5.0%

5 17 1.0% 5.0%

4 30 1.8% 8.8%

3 63 3.7% 18.6%

2 158 9.3% 46.6%

1 1357 80.0%  

Total 1696 100.0% 100.0%

INFORMS Corporate Membership Model• Mean of companies with more than 1 member = 4.7

• Median of companies with more than 1 member = 3

Assumptions:

• 25% of eligible companies would join as Corporate Members

• Conservative model (does not include companies with less members than free memberships to join)

• See attached spreadsheet model for details

Number of Memberships

IncludedNumber of Companies Revenue Impact

Revenue Impact Per Company

Member

1 424 $ 551,836 $ 1,301.50

2 85 $ 127,203 $ 1,496.50

3 46 $ 77,809 $ 1,691.50

4 30 $ 55,620 $ 1,854.00

5 22 $ 44,363 $ 2,016.50

6 18 $ 38,637 $ 2,146.50

7 14 $ 32,326 $ 2,309.00

8 11 $ 27,187 $ 2,471.50

9 9 $ 23,706 $ 2,634.00

10 8 $ 22,112 $ 2,764.00

Rough Model:

Corporate Membership Model

RECOMMENDATION

A corporate membership program appears to be a viable option with a strong revenue impact.

Three or four included memberships seem to be the ideal number.

Needs to differentiate from Informs Roundtable. Biggest expense will be advertising/corporate outreach. Further analysis required to determine correct pricing

structure.

Other Membership Ideas

“Variety is the soul of pleasure.” Aphra Behn

Memberships for Developing Nations

Idea INFORMS would institute some form of low cost electronic-only membership for people from countries that are identified as developing nations

Joint Memberships with Other Societies

Idea Joint memberships with other professional organizations, IIE, APICS, ASA, etc.

Goal Increase joint memberships without affecting revenue, increase collaborative opportunities

Tell-a-Friend Incentives for Institutions

Idea Have Institutions use mass emails to get members. Institutions with the most members will receive prizes and recognition.

Goal Increase membership numbers and overall awarenes without affecting revenue

APPENDIX

July 20, 2006

INFORMS INFORMS Membership CommitteeMembership Committee

Membership Committee Members

Susan AlbinProfessor and Director of the Graduate Program in the Department of Industrial Engineering, Rutgers University

Richard Barr Chair, Dept. of Engineering Management, Information and Systems, Southern Methodist University

John Neale Director of Research, Optiant Inc.

Anne Robinson, ChairManufacturing Manager, Demand Planning, Cisco Systems, Inc.

Jim Williams Operations Research Mgr, Land O'Lakes Dairy Foods

Membership Committee Members

Jacquie JohnsDirector of Finance and Member Services, INFORMS

Barry List Director of Marketing and Public Relations, INFORMS

Bob ShieldsManager of Membership Services, INFORMS

Rick Rosenthal, VP MembershipProfessor of Operations Research, Naval Postgraduate School