all insights

The four principles of cultivating member loyalty for non-profits and trade associations

By Chris Biggs and Noor Oweis

It starts with loyalty

Member loyalty is the lifeblood of non-profits and trade associations. Without it,  organizations can’t compete for mind-space, especially across generations who view value in different ways.

What is loyalty? In business, it’s what draws customers to a brand on an ongoing basis, achieved via reliably positive experiences with that brand: value. In the world of non-profits and trade associations, value is often the missing piece that organizations need to maintain membership and support their missions. Members are asked to pay annual dues, often without any clear answer to the question, “What value do I get for this membership fee?” Without that clear answer, value is missing—and so is the loyalty.

Think for a moment about the experience of using the Starbucks smartphone app. Customers who use this app can track their progress toward the clear, tangible result of their continued loyal patronage: the next free drink. Having worked with hundreds of clients across both for- and non-profit sectors, we’ve come up with the following four principles for developing and maintaining that kind of simple loyalty. Each principle—derived from best practices of the world’s most successful brands—can be applied to non-profits and trade associations to drive growth, regardless of an organization’s size, maturity, or budget.

Principle one: Harness data to understand your members

A key to building loyalty is to assess the wants and needs of your members—something that can only definitively be done with good data coupled with an analytics solution to understand that data.

Consider Target. Like many successful companies, Target captures data about its shoppers through multiple channels, including usage of its branded credit card and its loyalty pilot program, Target Circle. Target houses this data in a central location, and uses it to understand patterns and deploy incentives to get customers to come back.

Many organizations survey their members, maintain records of event attendance, and note important personal details, such as occupation and age. But non-profits often keep this data stored in disparate systems, making it difficult to compile, thus creating a barrier to understanding their members’ needs.

For a non-profit or trade association, this means two things should be on top of their data to-do list: One, setting up a data store to centrally house segmented data feeds from legacy systems. Two, using analytics software to help zero in on trends. (You don’t need the resources of Target to do this—there are a lot of software products available at a variety of price points.)  Yes, more data is better, but it’s crucial to leverage existing data to offer a more holistic, customer-focused approach to member engagement.

Principle two: Cultivate a value-driven membership model

Many non-profits meet costs largely through annual dues, and so absolutely must be able to maintain relationships with a large base of people. And yet their sales pitch goes something like this: “Pay us $100, $200, or more to be a part of our community.” This may have been compelling to previous generations who became members because it was the right thing to do, and a mark of prestige. Today, however, members expect more in return, and associations are struggling to articulate updated value propositions. The situation is exacerbated by the fact that members can now access free, high-quality products, such as professional training and intellectual property, that they historically got as part of their membership benefits.

To combat this, savvy organizations are creating tiered options at various price points, often including a free (or “freemium”) option. Using the strategy employed by large air carriers like United Airlines, everyone is offered membership at the base level for free (like United’s Mileage Plus Program). Higher tiers of membership come as a result of additional engagement, spending, and loyalty—comparable to United’s Premier, Gold, Platinum, and 1K membership levels—and provide greater benefits.

Like United, non-profits and trade associations are well-served by bringing more people into the ecosystem rather than freezing out potential participants through a rigid, old-fashioned membership model. With some strategic thinking and operational changes, non-profits can create membership tiers that expand their overall reach.

Principle three: Delight members with world-class perks

Few things make members happier than being rewarded with great perks.

Amazon Prime members may not even be able to name all the many benefits that come with an annual subscription: free shipping, access to videos and music, free grocery delivery, and much more. Many Prime participants have become completely hooked, practically unable to imagine life without these benefits.

The goal should be the same for non-profits and trade associations as it is for Amazon. And while many non-profit organizations likely can’t afford the size and scale of the benefits offered through Prime, there’s still room to think about how member benefits can be improved. 

Offering a spectrum of rewards shouldn’t intimidate organizations. It can be as simple and effective as the Starbucks app that rewards customers with a free drink every so often. Do members receive a magazine with their membership? An annual gift? Access to e-learning? Discounts to related events and products? Regardless of what’s offered, there’s always room for innovation. If you’ve successfully addressed Principle One and leveraged data about your members, you can delight them with relevant products and services—and continue to deepen their loyalty.

Principle four: Personalize

Organizations that help their members feel valued and understood are more likely to strengthen loyalty.

Beauty product retailer Sephora uses the popular Beauty Insider program to send tailored communications and product recommendations  to individual customers. This program, paired with technology that helps flag in-store items for potential purchase, has been the bedrock of the company’s success.

For non-profits and associations, personalization is an opportunity to give members a deeper connection to both the brand and its product offerings, and to help members identify opportunities they might be interested in. Example: If a non-profit has a speaker series on leadership coming up in Denver, it should be able to identify members in that region who have read articles on leadership on their website.

Behind the capability typically rests one or more marketing tools (often referred to as an organization’s “marketing stack”) that allow organizations to use available data to identify the right people for a particular campaign, and then automate personalized communications. Centering the member and their individual needs differentiates your mission.

Bringing these principles to fruition

In putting these principles to work in driving membership numbers and loyalty, it’s important to create a holistic roadmap that defines both your strategies and tactics over a multi-year period. You will need to talk to customers, gather feedback, and design a plan. Be ambitious! But work within the strengths and mission of your organization—even as you seek to expand these strengths and that mission.

You can start by outlining key improvements needed to support membership transformation: a new membership model, realignment of pricing, and technology improvements. With the right mix of strategic thinking and planning, you can revitalize your organization with a relentless focus on member needs, and by taking best practices from companies who have been the most successful at cultivating loyalty from their customers.