A few key signs may indicate that it’s time to change your membership structure. Knowing when and how to act can help slow churn and create opportunities for future growth.
You can think of membership restructuring like a game of poker. Even if you hold all the right cards, if you bet too high or not enough, you could end up with a less than favorable outcome when it comes time to lay your cards on the table.
Using this metaphor in a webinar last week, Dan Ratner, a membership and business development strategist with Next Steps, LLC, addressed the gamble that is a membership restructuring, along with some of the associated risks and rewards.
“If you do it right, it can lead to membership growth,” Ratner told me in an interview. “But if you do it wrong, it can lead to things like retention issues.”
Before embarking on a membership restructuring—whether it involves an overhaul of membership categories or tiers or a change in dues—Ratner suggests asking a few critical questions:
- Have members complained about the existing membership structure?
- Is new member recruitment stagnant or declining?
- Do you have a member retention issue?
- Are membership structures too cumbersome or complex for staff to administer?
If you answered yes to any of these questions, Ratner says, it may be time to make some changes.
“The scary part is that some associations may not take notice or take action,” Ratner says. “And then the member goes somewhere else because they find better value, relevance, or engagement someplace else.”
But any major membership restructuring involves risk. To avoid taking a gamble that’s too big, Ratner recommends three simple steps that can help ensure any changes you make are in sync with members’ needs.
Review the current structure. It helps to understand what you have in place before making major changes. Ratner suggests answering the following questions about your existing membership structure:
- What benefits and services do you currently offer members?
- How much revenue do you generate from dues?
- How does that revenue break down by category and/or tier?
- How many members do you have in each category and/or tier?
- What is your retention rate by category and/or tier?
“For a lot of associations, the tiers can get really out of hand fast,” Ratner says. “If you have dozens of different tiers, I would suggest that the association seek to simplify.”
Talk to members. At the same time, you’ll want to consider whether the timing is right for a membership restructuring. In the July/August issue of Associations Now, I explored five questions worth asking members before making a major membership change. “By asking members about the proposed changes, you really find out what their needs are first,” Ratner says. “A lot of the time, you can ask them to quantify the value of certain benefits upfront, so that you can reflect it back in something like a dues restructuring.”
Think five years ahead. Often, associations considering a restructure make the mistake of focusing only on the current state of their industry or profession, when they should factor in the forces that may dramatically change where their members are headed.
“Start with the end in mind,” Ratner says. “You want to think about who your members will be five years from now, and what products, programs, and services they need.” This type of thinking can help define new member categories and tiers, as well as reframe how member benefits and services are delivered.
“A lot of associations have segments of the industry that they’re simply not tapping into or reaching,” Ratner says. “By restructuring, hopefully, you’ll be gaining new members and moving in the direction of new growth.”