What to Consider Before Launching a Membership Renewal Discount
While a discount might sound like a good way to get more members to renew, consider your options before moving forward. Launching one without a plan could ultimately devalue membership and impact the association’s bottom line.
Choosing to offer a discount during a membership renewal campaign can convince more members to stay, but it’s important to do some thoughtful planning before you make that decision.
“If you often find yourself sending renewal notices and then a discount, members will hold off renewing until they get that discount, because that’s what you’ve trained them to expect,” said Elizabeth Engel, CAE, chief strategist at Spark Consulting. “You’re training them to ignore you, and you can get to a point where you devalue membership.”
Engel shared how associations can offer member discounts that are effective and showcase value, as well as alternative methods to build up excitement like incentives.
When Discounts Work
Discounts could prove useful for certain membership categories, such as those for students, retirees, or young professionals. While this might be unrealistic for trade associations, Engel noted they could keep dues lower for smaller firms.
“Any of those are good opportunities where associations can offer discounts to help communities or subcommunities in your larger communities that would otherwise have a challenge getting involved to get involved,” Engel said.
Another option that Engel recommends is adding a membership tier that costs less but has fewer benefits.
“I had a client do a ‘pay what you can’ membership for a period that included only benefits with fully automated access,” she said. “It was a test to see whether they should create a lower-tier membership, and the answer was a resounding yes.”
Engel and the client went to the board with four scenarios of the “pay what you can” system: a doom scenario (i.e., what would happen if everyone switched to a “pay what you can”) a pessimistic scenario, a realistic scenario, and an optimistic one of what people would opt into and for how much.
“You need to work out the math before you move forward with this kind of offering. What is the bottom line, and what would it be in a variety of scenarios?” Engel said. “And make sure you’re comfortable even with the worst-case scenario.”
Another situation where offering a discount can be effective is if your association is increasing dues. For example, offer members the opportunity to renew early and lock in at the current rate for one or two years.
“The reason to offer a discount when raising your dues is that you’re only making the offer for a limited amount of time,” Engel said. “Members will need to respond right away, and then you won’t need to send renewal notices for another two years, so you’re also saving money.”
When to Consider Incentives
Beyond discounts, incentives can also prove useful in getting members to renew without affecting revenue.
One of Engel’s clients had a benefit that everyone liked, but because it was metered, members could only use so much of it in one year. To get members to renew early, the organization said it would boost the number of times members could use the benefit.
“Another client had a highly valuable publication that pretty much everyone in the industry bought, so they offered a free copy for members that joined,” Engel said. “They knew that their publication would be bought anyway because it was an industry standard, so they offered one free copy as a premium.”
Another popular incentive that associations with a calendar renewal cycle can do is to offer members additional time for their membership, “15 months for the price of 12,” meaning that if members join during the current renewal campaign, their membership is good through next year.
“If you choose to do an incentive for renewal, think about what bonuses make sense for your members,” Engel said. “The key to successfully implementing any of these ideas is that you need to know your audience and what they find valuable.”