How To Start A Membership Program
One of the most pressing challenges nonprofit organizations face today is being able to attract new members while keeping up with everyone in their community.
That’s why membership management is so vital. Membership programs can be the perfect way to bring new people into your organization and stay on top of their every need.
Here’s what we’ll cover:
- Understanding Membership
- What Are The Pros And Cons Of Implementing A Membership Program?
- How To Structure Your Membership Program
- Keep With Due Diligence
- What Services Members Expect
Let’s do it!
So what exactly is membership, and why is it so important for the success of organizations? At the end of the day, all of us are members of something. Gyms, clubs, churches, you name it.
Some would describe membership as a state of belonging to an organization, and that’s exactly what your organization needs to do: welcome your members and help them feel like they belong.
What separates the great organizations from the not-so-great ones is how they manage their members.
The best organizations have membership management systems through which they can communicate, support, and facilitate the experience of their members.
In this way, well-designed membership programs help to stabilize growth. They are key for attracting new members while keeping current members happy and engaged.
But is it right for every organization to implement a membership program?
Ryan is excited about membership management!
What Organizations Are Best Suited For Membership?
While membership programs are great for most organizations, there are a few instances in which they could result in an unnecessary waste of resources.
To avoid this, it’s important to make sure your organization would actually benefit from a membership program before moving forward.
There are three main factors to think about when considering starting a membership program.
- The first is market desire. Would your organization offer anything worthwhile for its members?
- Next, consider feasibility. Is it actually possible for your organization to provide your members with what they want?
- Lastly, consider the risk associated with launching a membership program. Strike a reasonable balance of risk and reward before diving into a membership program as your organization’s strategy.
So you’ve gone through these key points and you feel ready to jump straight into your new membership program. However, before starting, there are three criteria you should be aware of to be absolutely sure a membership program would be beneficial for you and your organization.
Let’s take a look!
- You have an existing audience, or are expecting to build one. For an organization looking to implement a membership program, it’s ideal to have an existing audience or at least a plan to gain one.
If your organization already has a following on social media, or a good number of email list subscribers, you’re in a good spot.
If that’s not the case, you should have a strong plan in place to grow your audience in order to make a membership program worth your time and effort.
- Your organization has proper web infrastructure. It’s vital to have a fully functioning and up-to-date website when considering a membership program.
You could develop the perfect membership program, but if your website is structured in a confusing manner, your members will have a hard time navigating how to sign up for the membership.
It is important that your membership site is accessible, displays the benefits of membership, and makes sign-up easy. You don’t want potential members put off, because they can’t figure out how to sign up.
- Your organization has the resources to support a membership program. Is your organization prepared to handle a membership program and all of the implied work involved?
Membership programs are typically a lot of work to operate. A powerful membership database, like Springly, is one excellent way to light the load and make this task a lot less daunting.
You should also make sure that your organization has the time and resources necessary to create and properly facilitate a membership program. You should have at least one team dedicated to maintaining your membership program.
If your organization meets these three criteria, you should be good to go! Now that you know your organization is equipped to handle a membership program, it’s time to delve into a few different membership models that you can utilize.
What Are The Membership Models That Exist Already?
At first glance, the concept of membership seems simple. But when you look closer, there are actually many different forms that membership programs can take.
Let’s run through a few examples.
Formal vs Informal: Formal and informal membership models are meant to serve different purposes. Members of a formal group are expected to adhere to certain rules and guidelines.
If your organization is more goal-oriented and your members will have specific roles and responsibilities, a formal membership program is ideal.
Formal groups have a more hierarchical structure, and communication typically flows from the top down. The conduct of members is also expected to be a bit more professional too.
Alternatively, if your organization is more socially oriented (a hockey club, for instance), then it may be better suited to an informal structure.
There is no hierarchy between members in this type of group, and communication flows freely. The members tend to have a less formal and more friendly relationship.
Determining whether your organization is formal or informal is simple. If you are trying to solve a specific problem as a group, go formal. And if your organization is more socially oriented, then informal is for you.
Trade Associations: If your organization aims to hold networking events, conferences, and education relevant to a specific industry, you could consider the group you’re trying to form a trade association.
Trade associations are often funded by businesses and operate within their industry. Trade associations often focus on public relations activities such as political lobbying, advertising, education, and facilitating political donations.
If your organization resembles a trade association, structure your membership program as such. These associations tend to be structured more formally, and require their members to pay dues.
Members as Donors: If you’re running a nonprofit organization and need to keep organized records of your donors, your membership program should accommodate this need.
In this simple membership model, the dues that your members pay are actually their donations to your organization. These can be recurring donations that are billed monthly or one-time donations.
Using a membership program in this way makes it easy to communicate with, and manage, your donors.
Members as Consumers: This is the most common form of membership that organizations use. Many businesses now have some kind of membership program in which customers have the option to subscribe for exclusive benefits. You can apply the same logic to your nonprofit.
In this case, the membership program has a tiered structure in which the member pays higher dues to gain access to more privileges and benefits. An example of this structure would be an airline membership program.
Some consumer membership programs even require customers to create an account in order to gain access to your product or service. Think of a gym or country club membership.
If you run a book club and are looking to keep your readers loyal and committed, members as consumers-style program would be ideal.
Members as Advocates: The last membership model is similar to members as donors in that your members don’t directly gain access to products or services.
Instead, this model is designed to keep track of and communicate with advocates of your organization. With the right membership management software, you can implement a number of different membership models for your advocates.
For example, you could reward your most outspoken advocates, or implement incentives for advocate performance.
Louis knows stellar member
management is heart-racing!
As you can see, there are a whole lot of options for you when it comes to choosing a model for your membership program.
What Are The Pros And Cons Of Implementing A Membership Program?
If you're still not sure that a membership program is right for you, let’s run through some of the advantages you can gain from implementing one.
Customer Retention: One of the best ways to retain active participants in your community is to extend the option of a membership to them. Take customer loyalty programs, for example. The chances are that you have been signed up to one at some point in your life and you’ve remained a customer because of it. Well, membership programs work on a similar basis.
Members as consumers stick around for more when you can offer them program incentives.
Membership programs are also the most effective vessels for incentives. Rewarding consumers the more they donate to your nonprofit is guaranteed to keep them coming back.
Statistics from Forbes show that 78% of their consumer respondents claim that loyalty programs have a large influence on what they buy and for good reason.
Gaining valuable data and insights. Another great gift you can receive from a well-designed membership program is the consumer data you gain.
Many organizations need to spend large amounts of time and money performing market research to better understand their target audience.
With a membership program, your organization can dump the expensive market research and let the data come to you. Surveys, monitoring, and data collection allow your organization to take advantage of valuable insights while collecting the data in a significantly more efficient manner.
Upselling potential: With an effective membership program, upselling becomes significantly easier because of the data you collect from your members.
For example: If a member hasn’t donated in a while, they can be sent an email highlighting the needs of the non-profit and asking for a donation.
Features like this are only possible with a great membership program.
Member Prioritization: The 80/20 rule is an astonishingly accurate phenomenon that applies to nonprofits just as much as it does businesses. The idea is that 80% of your revenue typically comes from 20% of your members or donors.
This means that your organization should ideally focus most of its outreach efforts on this 20%. But without an effective way to know who’s who, this can be tricky.
With a membership program, you can easily identify your highest contributors and prioritize them in terms of communications and benefits.
Better Communication: As we’ve said before, membership programs are simply the most effective solution for communication between your organization and those who support it.
Additional Revenue Sources: The last one of the many benefits we’ll cover is how membership programs offer their organizations additional revenue sources.
Members paying dues to retain membership is the clearest example of how membership programs can generate extra revenue. But there are ways other than this to make money from your member body.
You could gain sponsorship from other companies that wish to advertise to your large membership base. Additionally, people who are proud members of your organization will promote your organization and encourage their peers to sign up. Talk about free advertising!
As you can see, there are many benefits associated with starting a membership program. There are even more benefits than the ones mentioned above, but unfortunately, we can’t cover them all here.
But not everything is perfect, and believe it or not, even membership programs can have their flaws. So far, we’ve only been praising these systems, and rightfully so, but now it’s time to go over what could go wrong.
Creating Enough Value: The greatest challenge organizations face with membership programs is creating enough value to keep members paying their dues and interacting with the organization.
This is a big problem, and many organizations fail due to neglecting this important issue. Just because you have a membership program does not guarantee that people will pay to be members.
There’s nothing worse than spending time, money, and resources on a membership program only to have nobody sign up for it. You should be sure to cover this base before setting your program in motion.
System Maintenance: In the digital world, there is plenty that can go wrong. Depending on the nature of your members’ relationship with your organization, they may need to interact with your organization often.
If this is the case, a system failure could be catastrophic for your organization and its members alike. One of the big issues membership programs pose is the constant upkeep required to keep the system running smoothly.
Doing this requires a significant amount of diligence and effort.
The Risk of Rewards: Providing customers with rewards for engaging with your organization is often a somewhat risky matter. For instance, giving potential members a $10 credit for signing up may open your nonprofit to exploitation.
It’s important to constantly consider the bottom line when structuring your membership program, so make sure that you balance your freebies with responsible pricing for the best result.
Market Saturation: Membership programs are great! That’s why there are so many of them out there. However, without differentiation, your membership program might end up looking and feeling identical to your competitors’.
If you fall into this trap, you could end up creating a program with no members even if you followed all the steps and did everything right.
Designing a unique membership program while also attempting to create enough value for your members can be a daunting task for many organizations.
It’s important to make sure that you can handle this load before starting your program.
Ultimately, membership programs are great, but it’s not all sunshine and rainbows. Making a membership program that functions properly, offers worthwhile benefits to members, and differentiates itself from other membership programs is not easy.
But if you dot your i’s and cross your t’s, then you should be ready to begin exploring how to structure your membership program.
How To Structure Your Membership Program
Designing the structure of your membership program is like building the foundation of a house. If you take your time and make the right choices, the house will last for years to come. If you rush the process and cut corners, the house is sure to collapse.
To avoid this, you should determine the right structure for your membership program. Here is what you need to do.
Understand Your Organization
The structure of your membership program depends on the type or form that you adopt. A members-as-consumers organization will need to be structured to include things like scheduling events or meetings, whereas a members-as-donors organization may wish to structure their program more towards offering benefits and donor incentives, as well as a rock-solid communication channel of course.
If you run a club, membership is a simple matter. Members pay dues, communicate with each other, and with your organization. You can use your membership program to schedule events, meetings, and so on.
For charities, it gets a little more complicated. Members can pay recurring dues or make one-time donations. You could offer them benefits for their involvement in your organization, incentives for donation or advocacy, and of course, open a communication medium.
To make the best use of a membership program, you need to have a crystal clear understanding of your mission, what you plan to offer your members, and how feasible the program is.
Align Membership With Your Values
It’s important to keep the values of your membership program consistent with that of your organization. Treat your members in a way that aligns with your mission and values.
Unfortunately, this is often overlooked by organizations. If individuals don’t have the same experience with your organization as a member, they may dissociate the membership program from your organization.
Decide Membership Frequency
Frequency covers many different aspects of membership. How often do you charge your members for their dues? You have a few different options when it comes to membership frequency.
Yearly Rolling: A rolling balance allows your members to choose what periods of time they wish to be members. Members are allowed to freeze their membership for some periods when they’re not using your services and you generally charge your members at the end of the year. Think of freezing your gym membership for a month while you’re on vacation.
Yearly Fixed: Instead of allowing your customers to freeze their membership, a yearly fixed frequency charges your members for a full 12 months of dues once at the end of the year.
Semester or Bi-Annual: Similar to yearly frequency, but done twice per year. This model can also be fixed or rolling.
Quarterly: Like bi-annual frequency, but members are charged four times per year.
Monthly: Lastly, and most common, monthly payments are made, well, every month.
The best frequency model depends on how your members interact with your organization. If you run a booster club, for example, monthly membership dues are appropriate.
Building Membership Fees
If you charge your members fees, how much should you charge them? This might seem like a simple answer but really think about it. How much can you reasonably charge people in exchange for the value you create through membership in your organization?
If you charge too much, your membership numbers will drop and it will be difficult to find new members. Charge too little, and your membership program will not be sustainable.
At the very least, your membership dues should allow you to break even to keep your organization running.
Pro Tip: Ask your members for feedback on their dues. Find out whether or not they think the benefits of membership you provide are worth the price they are paying, and adjust your rates accordingly.
Keep With Due Diligence
Membership programs come with some legal implications for organizations but don’t worry, there is not a lot of due diligence to follow on a state or federal level.
The section below will help you navigate the legal landscape of running a membership program.
Specifically, membership bases are intangible assets that are readily marketable and potentially profitable for the organization. The basic gist of membership dues and taxes is that if members receive direct benefits from paying their dues, these dues are not tax-deductible.
But there are exceptions to this rule. Charities, for example, are allowed by the IRS to disregard some membership benefits when calculating a donor’s charitable contributions.
Voting Rights: Can your members vote on decisions made by the organization? As defined by the Membership Voting Interest, each member may have voting rights equal to their membership rights. This is similar to the voting rights of corporate shareholders.
ByLaws: There are many bylaws that govern how organizations ought to operate their membership programs. These involve how to handle expulsion from membership, the non-payment of dues, and many other procedures and requirements.
Any further details about the legal nature of organizations when it comes to membership programs vary from state to state, so check in with your local government to learn more.
In some cases, formal members of an organization should have significant input when it comes to the election of the organization’s board of directors.
Like shareholders, members of the organization should have some say in how the organization is run.
Depending on the nature of your organization and where it operates, you will need to follow different organizational rules for your membership program.
What Services Members Expect
Last, but not least, we’ll help you discover how you can create worthwhile value for your organization’s members.
What kind of benefits will you provide your members, if any at all? For a smaller organization, membership alone is all the benefits you need to provide.
In other instances, you may need to give your members a little something to keep them coming back. For example, many gardening clubs offer their members one free plant after being a member for a period of time.
If you can find a sustainable way to reward your members, implement it into your membership program.
Suzanne is celebrating the joys of member management!
There are a few commodities you can provide your members that help build a sense of belonging and that will make them eager to remain in your organization. Some examples include:
Membership Cards: In some cases, membership cards are completely necessary. They are a great way for members to redeem their benefits, or gain access to your services.
There are many gyms that provide their members with a keycard or key fob that grants them access to the gym. This could be a great idea for your garden club or country club.
Membership Certificates: A membership certificate can give your members a sense of pride for being a member of your organization.
This applies best to those nonprofits with a big focus on their social mission, as the certificate shows how the members have aided a worthy cause.
Membership Directories: Your members may appreciate access to their own member directory through which they can see their fellow members. This provides value to your members by opening up various networking and socializing opportunities to them.
Member Merchandise: One cool way to accommodate your members is to provide them with custom merchandise to thank them. A shirt, sticker, or coffee mug could make your members feel like they truly belong in your organization.
Membership programs are hands down the most effective way to retain customers and grow your organization by increasing membership over a set period of time. When done correctly, a membership program can transform your organization into a well-oiled and efficient machine.
But, remember, before you dive into one of these programs, there are some important things to consider:
Ensure that a membership program is feasible for your organization. Do you have the resources to maintain such a system?
Establish what exactly your organization will offer its members. How will you make membership worthwhile?
Determine the best structure for your membership program. What model best fits your organization?
Lastly, do your due diligence and ensure that your membership program complies with the associated laws and regulations in your region.
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