How to deliver value to members in times of uncertainty…
A BIT ABOUT ME
With 10 years’ experience working in the Not for Profit sector I’ve seen many ups and downs in that time. For many, the value of membership is a combination of elements: professional recognition; learning and development; lobbying, policy, advocacy; community and connection. Organisations may be concerned that difficult moments put membership at risk, but in my experience, difficult moments are an opportunity for them to demonstrate value and prove that they matter.
In 2008 I joined the Royal Institute of British Architects (RIBA) as Head of Membership. At that time RIBA had one main goal for this new appointment: finish the implementation of a new CRM and train the team on how to use it.
What the Institute hadn’t foreseen was a far greater challenge on the horizon, and one which would require difficult decisions, bracing for a period of uncertainty, and a change in behaviour across the whole team.
THE CHALLENGE WE FACED
In 2007-08 the UK began to feel the effects of the credit crunch. The instability of banks such as Northern Rock, the change in the mortgage market, and failing house prices all contributory factors.
By January 2009 the UK had officially entered a recession. A reduction in bank lending led to a fall in consumer spending, and house prices fell. The government response was a period of austerity, during which spending was cut and taxes increased, to try to reduce the need for government borrowing.
For the construction industry the impact was severe. Construction value decreased, jobs were at risk, and a re-prioritisation of skills became apparent as the number of planned projects were delayed or abandoned altogether.
The effect swept across the construction industry and built environment, and hit hard. Architects are integral to the planning, delivery and project management phases of projects and so they became a casualty.
With projects pausing or stopping altogether, planned work drying up, and some work not being paid for, Architects were hugely affected.
KEEP CALM AND CARRY ON
On the 17th November 2008 we went live with our new CRM. We’d already sent out our annual renewal notices (via our old, bespoke system) so the test would be collecting the payments and processing the renewals through our new, shiny system.
January 2009 was the craziest month in a Membership body that I’ve ever experienced. As with any new technology there were of course teething problems, and our member portal was still three months away from completion, so we were still managing the huge administrative task without a website to support us.
Sacks of renewal letters were piled up in the office when we returned from the Christmas break. Letter after letter after letter. A mixture of payments, resignations and a few applications for reduced rates were amongst them. Those who wanted to resign were brief or cunning by cancelling their Direct Debit instructions without telling us until we tried to collect their fees each month.
At our busiest, I took on eight temps in addition to my own five staff, just to get through the backlog. £7million of membership subscription income was at stake, and we had to get through it.
THE INITIAL RESPONSE
By March 2009 we still had 10,000 members who hadn’t yet renewed. This was a huge issue, since membership organisations base their forecasting on expected cash flow. The effect of this delay was far reaching, casting a shadow of uncertainty across other, key projects.
Since our Byelaws detailed that any member who hadn’t renewed by the end of March should be lapsed the potential loss in income would be significant. I prepared a report for our membership committee, indicating that we couldn’t possibly afford to lapse these members and right–off that associated income, and included a crisis response plan.
Data management is key for this kind of crisis management. I needed to understand what opportunity we had to get these late renewers to pay, but with such a huge number, we had to be smart, so I interrogated our new CRM to find out:
- All members with a charge for 2010 that was still “due”.
- Then I sorted it by membership category, prioritising the Chartered members first, as they paid the most in subscription fees.
- Then I looked for trends:
- Whose company paid their fee for them? Then we could target the companies themselves.
- Were there any serial late payers? Could we treat them differently? Should the messages be different for those who usually paid on time?
- Who’d cancelled their Direct Debit, and was likely to be trying to resign? How could we stop them?
- Who was actively using their membership, so we could prove the value?
Then we divided the list between us, and we called as many as we could get through. Hundreds and hundreds of them. The rest we emailed.
At times the calls were harrowing. We heard from newly-qualified Architects, who, after seven years of studying, well into their 30’s, with mortgages and young families to support, couldn’t find work. Others, a couple of years into their careers on a starting salary of £25,000, now made redundant. Then came the company Directors and owners who’d had to make entire teams redundant. Others had children to support through university. Many were self-employed or the main bread-winner for their household.
On a handful of occasions members cried on the phone to us. It was a desperate time.
FROM CRISIS TO OPPORTUNITY
At the end of March, the headline was: We can’t possibly save these members.
However, that wasn’t entirely accurate. We could keep the membership, but not necessarily the subscription income.
What our members needed now was the understanding, support and guidance of their Membership Body. They needed to feel connected to their industry. They needed to keep up their CPD to ensure their CV’s stood out. They needed discounts from our Jobs Board, access to our research and to stand with us to lobby government. We couldn’t afford to lose each other.
So, we did something daring. We went back to the Membership Committee and we told them that we had a plan to keep our members, but at a cost. Instead of our predicted £7million income we would need to plan for nearer £6.1million. This would have a drastic impact on projects and wasn’t particularly welcome given our recent, significant investment in new technology (CRM). But if it worked, we’d keep our membership and their subscription potential for the future would be worth it.
We changed our approach and we hit it with everything our small team had: we promoted our Reduced Rate membership fee. One of my first marketing decisions was to remove the option to resign from the renewal form. The previous year’s form had dedicated an A5 space on “how to resign”. I replaced it with a “what to do if you need help or support” section. My colleagues were aghast – they couldn’t believe that I actually wanted to tell members that they could be eligible for a reduced subscription fee.
We called the non-renewers and we listened to their desperation and we offered them membership, and access to all their benefits and services for a reduced price.
It was an instant success. Whereas before members were resigning in their droves, more and more renewed. The vast majority had no idea we even offered a reduced rate (largely due to the fact that it had never actually been promoted before), others had never even thought to ask; in better times they didn’t need to. The net effect was incredible. By June the number of non-renewers was down to below 1,000. Incredibly we just about hit our renewal target for the year (albeit a couple of months late).
The plan worked. The strategy, to support members when they needed us, meant that as things recovered our members remembered. We even received thank you messages. A handful even paid us double the following year to “make up what they hadn’t paid the year before”.
2009 into 2010 was a hard period. Incredibly, a decade later, we face an even harder time. What I learnt from 2009 was this: have a strategy and don’t be afraid to do something different. Now, more than ever, members will need their organisations, and when this time passes, they won’t forget.
Its clear that without a Data Strategy that had been built from our recent CRM implementation, those members were at risk of not renewing. In later years I developed this strategy further, to predict non-renewers by looking at serial late payers and targeted them differently. I also offered incentives for paying on time and started to account manage companies who paid our member’s fees.
Now, more than ever, is the time to ask yourself if your Data Strategy is robust enough to support you and your members effectively.
It would have been impossible to do this kind of Data Management with our old system. Without enabling technology times of crisis are made all the harder. I could only ask the right questions of my system with a sound Strategy in place though.
Finally, this crisis tested the value of our membership. When it mattered our members needed our collective voice to support government reform and they needed learning and development to keep their skills up to date and keep a competitive advantage over their peers. And more than ever they need to feel like a citizen of our Institute, reach out to their community, share ideas and support each other. If you’re working on your Member Value Proposition now, it’s the right time to be doing so.