December 14, 2016   |   Vol. 15   |   Issue 12
By Harold Maurer, CDM and CeM, MGI Managing Director, Account Services

Membership Marketing Data: Don't Let Imperfection Immobilize Your Program

How do you know when you have enough data on membership to make a decision?

Does data imperfection stop you from reaching out for more members, better renewal programs, more effective engagement communications, and even from spending budget on a new member drive? Instead, do you put that budget and staff energy into getting perfect data to drive your decisions?

We market membership in a world that has convinced us that perfect data is achievable. But even with “supertools” like data warehousing, big data, data analytics, Association Management Systems, CRM, dashboards, and more, data perfection always seems just out of reach. In more than a few client engagements, I have watched tests, campaigns, and full-year programs get tabled because the data was not flawless.

At MGI, we take a different approach to data. Instead of perfect or imperfect, we try to focus our own and our clients’ decisions on sufficient or insufficient data.

Data Cost Versus Confidence

How do you know when you have enough—when your data is sufficient? Jim Novak was a consultant and mentor I worked with on the for-profit side, and I can still hear him preaching this to any decision-maker he could convince. Novak’s Law:

Capturing the Last Five Percent of Data Accuracy Is Usually More Expensive
Than Any Monetary Gain It Will Produce.*

So bad news! There is no hard and fast standard for sufficient or insufficient data. But there is a very real relationship among cost, accuracy, and decision-making confidence. It looks like this:

For decision-makers, this simply means that based on cost capturing 100% of data offers no equivalent return in increased decision-making confidence for the expenditure. Therefore, as membership marketing professionals, we have to make the best decisions we can based on the best data we can accumulate. But is it sufficient?

Sufficient Data

As I said before, there is no industry standard for sufficiency. But there are a few tips that can help membership marketers be sure they are working with sufficient data:

1. Set Clearly-Defined Key Performance Indicators (KPI). These data points set the measurement standards for your program. MGI uses a number of these to measure the success of our clients’ membership programs. They include:
   • Response Rate – How a campaign performed
   • Cost to Obtain a Member – How much it costs to acquire a new member
   • Renewal Rate – Percentage of members who renew
   • Average Tenure – How long the average member stays
   • Lifetime Value – The value of a member over the time he or she stays a member
   • Maximum Acquisition Cost – The most that should be spent to acquire a new member
     
     

2. Establish Data Rules. Make sure your organization can provide all the accurate data you need to maintain as-accurate-as-possible values for each of your KPI’s.

   At MGI we often hear that “IT has the data, and it’s a mess!” Well, here’s a dirty inside secret…almost everyone’s data is a mess. Make a start. Figure out how to get the best set of reports you can, task the organization with monthly procedures to assure you get it, and then don’t worry too much about the rest. As long as you know your KPI’s, you can stay ahead of your game. Improvement will follow.

3. Use Your KPI’s to Drive Planning, Budgeting, and Success. The reason MGI includes the KPI’s above is that, with a small amount of analysis, we can determine how many dollars it will take to reach any given membership marketing goal. It doesn’t matter whether the goal is in new member growth, revenue growth, or overall membership program return on investment. We use this process every day.

Believe me, I do know it was much easier to write these three bullet points than for you to get them done. MGI will gladly spend personal time with you to help work on these and other related issues. But the important point is this: do not let a perceived lack of data accuracy stop your organization from using data to make membership marketing decisions. Take the best of what you have, apply good logic and analysis, and approach the marketplace to succeed!

If you have any questions about your data or marketing your organization, feel free to contact me at HMaurer@MarketingGeneral.com or (703) 706-0391.