Actual Photo of the Iceberg that Sank the Titanic
The Hidden Obvious – Search and Discover it Before Adding another Layer of Complexity.
I said this in the last Tipster I wrote: I am nearing retirement after 41 years of professional marketing. It has been an invigorating, aggravating, and enervating run. I vowed never to become “that guy” who pretends to aphorisms and witticisms about the many experiences I have had in this field.
Finding the Problem to Fix Instead of Fixing the One that’s Not There.
More than one membership client has approached Marketing General and said: “Membership is dropping, our renewal rates are dropping and we can’t seem to grow.” We’re not rocket scientists, we’re direct marketers and we know that typically there is one of two major issues that these situations often face, either they are not contacting enough people to renew or gain new members, or their value proposition is out of sync with what members and prospects need. There are others, but these are the first line of our analysis. Here is a list of some solutions many associations have tried:
Let me not be misunderstood. These are all great things to do after identifying the core issue affecting growth. They can represent diversions into unprofitable complexity, often off-target solutions to issues that may seem apparent but are really secondary to the undertow of macro issues affecting your membership decline. Sometimes, identifying your core issues is what I call discovering Hidden Obvious. Let’s look.
Slow Membership Acquisition
First Question: Are you contacting enough people in the field enough times?
There is no hard and fast formula, but experience tells us that if you are trying to recover membership ground you need to figure on contacting your membership goal minus your number of renewals divided by at least one percent. Said another way, if you are looking to grow to 60,000 members, and you currently renew 40,000, then you will need to contact at least 20,000 members divided by 0.01, for more than 2 million contacts, in the coming year. This is not 2 million unique contacts but 2 million total contacts – prospects found in your lapsed member data combined with outside lists – at least five times in the coming year. If you achieve a 1.00% response rate or above on your lapsed members – and this group is the key to this analysis – then the Hidden Obvious here is that you haven’t been contacting enough people enough times. Oh, and by the way, the same conclusion is true for your renewal program if you are running at below a 65% renewal rate.
Are you doing that? If so, good! Next question…
Second Question: What if we are not achieving that 1% response rate with our lapsed campaigns?
Again, experience tells us that if you cannot achieve a 1% response rate when you throw in all your lapsed members, then you probably have a value proposition issue. Sounds serious.
Look at the Hidden Obvious. If your organization has a dues of $55 and you can’t get one out of a hundred prospects to spend $55 on membership for a year, then they probably either don’t value the organization’s offerings, or they don’t know what the offerings are. Now you are closer to finding a problem you can solve. There are many ways, including research which we offer at MGI, you can discover what constitutes the indispensible value you can provide your members. Be prepared, though, to discover that you currently do not offer it and may need to develop new programs and services to meet members’ expectations of the value you deliver for their $55!
There are More!
There are more examples of finding the Hidden Obvious in the work that we all know and love. Keeping the Hidden Obvious in view is a foundation I have lived by for many years. Here are some hints from other Tipsters and from my own experience:
If you have any questions or need more information, please do not hesitate to contact me at 703.706.0391 or HMaurer@MarketingGeneral.com