Moving Members to Action: A Benchmarking Study on Member Referral Programs. October 2010

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1 Ave M. A Benchmarking Study by Moving Members to Action: A Benchmarking Study on Member Referral Programs October Associations Participate in Major Benchmarking Study on Member Referral Programs Ask a random selection of members how they first Key Finding #1: Tangible, individual rewards such learned about your organization and many will mention a friend, boss or colleague. Word of mouth is still one of as gift cards are the most commonly used incentives by associations. the most powerful and influential methods for acquiring new members. Yet many organizations still struggle with how to create an effective and active referral program. So, how do you move members to action? According to the association executives who participated in this study, it is by constantly reminding members of the referral program and by providing invitations to test drive membership. In August, Avenue M Group, LLC (Avenue M) launched Key Finding #2: The most effective type of incentive cited by survey participants was Exclusive Club for Members Who Make Referrals. Key Finding #3: Associations are staying in the forefront of their members thoughts by using a combination of online and offline tactics to constantly remind members to recruit their friends and colleagues. a survey designed to benchmark how associations use member referral programs to encourage members to Key Finding #4: Invitations to live events and loyalty recruit their colleagues and friends. Eighty-one percent programs were rated as the most effective tactics for (81%) of those surveyed have used a referral program encouraging members to recruit their friends and to successfully recruit new members. The following are colleagues. the key findings from the study:

2 Survey Method The Member Referral Study was launched online August 30, 2010, and was left open to respondents until September 14, Approximately 130 professionals from membership associations responded to the survey and supplied data from their organizations. Not all of the respondents answered every question. 66% Professional societies 26% Trade associations 8% Hybrid of both Industry 23% health care 12% science/engineering 12% real estate/const 7% finance/accounting 5% legal 4% manufacturing 3% education 1% retail 1% social services 1% association management 30% other industries Membership 32% have less than 1,000 35% have1,01-4,999 5% have 5,000-9,999 7% have 10,000-24,999 9% have 25,000-49,999 4% have 50,000-99,999 8% have 100,000+ Operating Budget 61% have less than $5M 11% have $5M - $9.9M 11% have $10M - $19.9M 7% have $20M - $49.9M 4% have $50M - $99.9M 3% have more than $100M 4% Don t know October 2010 Welcome to Avenue M Group s Member Referral Benchmarking Report In August 2010, we launched an online survey to collect information on how associations use member referral programs and member-get-a-member campaigns to recruit new members. The goal was to identify effective ways to leverage an existing member base to help grow an organization. We are pleased to present the findings in this benchmarking report. We welcome your comments and feedback and look forward to serving the association industry with other benchmarking reports in the future. Cheers, Sheri Jacobs, CAE President + Chief Strategist Avenue M Group I October

3 Has your organization ever used a referral program to acquire new members? "%#$!"#$ &'($ )*$ Total responses to this question: 129 What best describes the type of member referral program your organization has deployed?!'#$ %&#$!"#$ A short-term campaign (< 12 mo)! An on-going program (> 12 mo)! Both short-term campaigns and ongoing programs! Total responses to this question: 100 Avenue M Group I October

4 What is the average length of a short-term member referral campaign? ($)*+,-.-/,0$ $ 78/))$-*26$9%$0+6-*):$!'#$ %&#$!"#$ (6$ $3,+5,20$ 78+65/,$-*26$9%$0+6-*):$ ;+-*$)*+,-.-/,0$ )$26<$ $ 3,+5,20)$ Total responses to this question: 57 Does your organization track referrals in its AMS system? %!#$!"#$ &'($ )*$ Total responses to this question: 100 Avenue M Group I October

5 Table 1 Key Finding #1 Tangible, individual rewards are the most commonly used incentives by associations. When asked what types of incentives are used by an organization to encourage members to make referrals, nearly 60% selected gift cards (such as AMEX or Starbucks) with the average value ranging between $100 and $249. The larger the organization, the more likely the use of gift cards as an incentive. Manufacturing associations were the least likely type of organization to use gift cards as an incentive for recruitment. What incentives has your organization offered to encourage members to make referrals? (Select all that apply) Gift Cards (AMEX) 59% Annual Conf Free Registration 45% Other incentives used in referral programs include: Drawing for airfare and hotel to annual conference Association gift cards to pay for books and/or education Free advertising in association newsletter Cash incentives Free subscription to industry encyclopedia Competition with awards by sections or chapters $20 coupons to offset cost of dues or education Free tee shirt Raffle/Tangible Rewards 40% Other Raffle Entry 38% Education Discount 26% Key Finding #2 The most effective type of incentive cited by survey participants was Exclusive Club for Members Who Make Referrals yet none of the rewards received a rating higher than 6.33 out of 10. When asked How would you rate the effectiveness of these incentives on a scale of 1-10 with 10 being very effective, all of the incentives received a moderate rating between 4.39 and Overall, the incentives that proved to be most effective were the ones providing a reward for an in-person event such as education and networking. Occasionally, an item such as an Apple ipad or Amazon Kindle may also spark interest in a member referral program. The incentive with the lowest rating was Association-branded items. (See Table 2) Membership Discount 26% Free Reg./Other Ed Prog. 25% Association-branded items 22% ipad Raffle Drawing 21% Free Book 16% Book Discounts 10% White Paper or Networking 5% Total responses to this question: 100 Avenue M Group I October

6 Table 2 How would you rate the effectiveness of these items? (Scale of 1-10, 10 = very effective) Exclusive club for referring members Raffle drawing for electronics (ipad) Free registration to Annual Conference Exclusive networking events Discounts on books Exclusive networking events Discounts on education Gift cards (AMEX or Starbucks) Discount on membership Free registration to other ed. programs Entry into a raffle Free research Free book Free whitepaper Free membership Association-branded items Total responses to this question: 97 Avenue M Group I October

7 Key Finding #3 Associations are using a combination of online and offline tactics for encouraging members to recruit their friends and colleagues. Regardless of the method being used, association executives cite the importance of an on-going campaign with constant reminders so members don t lose interest or forget. The biggest challenge many associations face is finding ways to be a part of the conversation when a member is speaking to a prospect. The table below shows the usage of various tactics to encourage referrals. The table on the following page (Within Key Finding #4) shows the effectiveness of these tactics. What methods or tactics does your association use to encourage member referrals? Table 3 Currently Using Testing or Piloting Not Using Invitation to a chapter meeting 38% 7% 54% brand ambassador program 37% 10% 53% Forward to a Friend link 37% 8% 54% Loyalty or rewards program 36% 8% 56% Invitation to attend a live networking event 31% 10% 60% Invitation to attend a live educational event 30% 10% 60% Mail/print ambassador program 27% 13% 60% Web-based ambassador program 22% 7% 71% Total responses to this question: 98 Avenue M Group I October

8 Key Finding #4 Invitations to live events and loyalty programs were rated as the most effective tactics for encouraging members to recruit their friends and colleagues. Is your organization primarily using an online strategy to increase member referrals to your organization? If so, you may want to consider integrating invitations to in-person events to close the sale. While there are many channels available to spread the word about membership in your organization, the associations participating in this study cited invitations to chapter meetings, networking events, and in-person educational programs as the most effective method for encouraging members to introduce their colleagues to the organization. Table 4 How would you rate the effectiveness of these items? (Scale of 1-10, 10 = very effective) Invitation to a chapter meeting Invitation to a live networking event Loyalty/rewards program Invitation to a live educational program brand ambassador program Refer a member link on association website Invitation to an online educational program Web-based ambassador program Mail/print ambassador program Mobile marketing YouTube videos featuring members Magazine Tip-in cards Animated YouTube video Forward to a friend link Ad on Facebook Promotional discount on Twitter Ad on LinkedIn 3.79 Total responses to this question: 98 Avenue M Group I October

9 Open-ended Comments Some specific tactics being used by associations to encourage members to recruit their friends and colleagues include (collected from the open-ended comments): Limited Free Trial Memberships We sent active members a thank you card that contained 4 trial membership gift cards and asked them to give the cards to their colleagues. We gained 1700 new members as a result. We have offered double rewards points and are piloting a program with members giving away a free 6- month no-obligation membership. Contests and Competitions Contests and competitions (especially during National Membership Month). Free attendance to certain events (chili cook-off, receptions, networking nights, etc.). Constant follow up by association membership coordinator (paid staff). Constant follow up by association members (who referred potential members). Builder get a builder program where builders invite potential builder members out to lunch. This has been highly successful. Prize offered by the president for the most successful referrals Local section (chapter) competition to recruit members for national association. Recognition breakfast at the annual meeting. We also have recruiter ribbons and recruiter pins. Monthly drawing to recognize recruiters. Incentives and Drawing Offered free one year membership if they recruit two new members. A variety of incentives for personal reward. We have added chapter financial awards this year for recruiting and using a code. $25 reward for member referrals. We give cash prizes! We had a drawing for those who recruit new members. Not really a "rewards" program but a random drawing of members who recruited a member for a complimentary registration to the Annual Conference. Recognition s, recognition of recruiters in monthly Newsletter, publicity at in-person conferences, graduated rewards levels. Each member recruited is the equivalent of one point towards earning a yearly prize. We instituted "double points" months to for an extra incentive. Articles in newsletters, magazines and announcements at chapter events. Profile successful member recruiters. Tools Top down approach where leadership encourages others by example - Commitments from Board and Membership Committee to recruit specific number of members. Recently developed a membership at a glance business card to give to recruiters. Supply recruiters with a potential member packet. Getting ready to send recruiters a list of members they have recruited (including expired member) to prompt follow-up. Avenue M Group I October

10 Recognition is an important element of many member referral programs. Does your organization use any of the following methods to recognize members who have recruited a new member? J;5.978#>14/7#9>#1>#/./C26=>9C#:;5.9C1F=># )*"# J;5.978#>14/7#9>#1#41L=6#:69>2#:;5.9C1F=># ('"# J.1@;/#=6#1K163# ($"# H28/6I#:./17/#7:/C9?B# &'"# G1:/.#:9># $%"# -EC.;790/#9>0921F=>#2=#/0/>27# $!"# -./012/3#4/45/6789:#7212;7#< #2=#196.9>/#?6/@;/>2#AB/6#C.;57D# Total responses to this question: 90!"#!"# $!"# &!"# (!"# %!"# +!"# *!"# )!"#,!"# What is the typical value of the incentives offered by your organization? ()**#+,-.#/0# $$"# $$"# %"# '"#!"# $!"# $%"# /0#1#/$2# /3&#1#/42# %&"# /0&#1#/22# /$&&#1#/342# /30&#1#/422# Total responses to this question: 90 /0&&#56#756)# Avenue M Group I October

11 Resources and Information on Word of Mouth Marketing and Loyalty Campaigns Books 199 Ideas: Powerful Marketing Tactics That Sell by Sheri Jacobs, CAE (2010) Word of Mouth: How Smart Companies Get People Talking by Andy Sernovitz (2009) The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video and Viral Marketing to Reach Buyers Directly by David Meerman Scott (2010) Articles Frequent Member Program, Association Management (March 2003) Get Members, Keep Them and Reward Them, Marketing Insights (April 2004) Websites Andy Sernovitz offers a tremendous amount of ideas, tips and case studies from the for-profit world on the topic of word of mouth marketing. You can find free downloads via PDF files and audio files, enewsletters, a list of upcoming events and blog postings. Don t forget to sign up for Andy s enewsletter. You ll love the tips and ideas. Word of Mouth Marketing Association offers resources such as a case study library, ethics toolkit, an influencer handbook and more. For some items, membership is required. Colloquy offers fee-based research and publications on loyalty programs. Google the term member get a member and you will see a list of links to other associations member-get-a-member campaigns. Avenue M Group I October

12 About Avenue M Group, LLC No two associations - their challenges and opportunities - are the same. We get that. That is why we provide a highly customized approach to each organization. Avenue M helps organizations: Keep their brands fresh and relevant Define their competitive edge Attract and engage members Increase attendance and satisfaction at association events. Additional information can be found at or by contacting Sheri at Sheri Jacobs, CAE, President + Chief Strategist Sheri is a frequent speaker and a contributor to various associations and publications. She is an association veteran with more than 15 years experience. She is a past chair of ASAE Membership Council and a current member of the Marketing Council. Sheri is also serving as the co-chair of the Association Forum Marketing Shared Interest Group. She is also the co-editor and contributor of Membership Essentials (ASAE 2008) and author of 199 Ideas: Powerful Marketing Tactics that Sell (ASAE 2010). Sheri can be reached at jacobs@avenuemgroup.com. Headquarters Office 500 Lake Cook Road, Suite 320 Deerfield, IL Avenue M Group I October