By: Rick Whelan, CDM.
Now when budgets are stretched and marketing expenses are bound to be cut, the need to know how much you can really afford to spend to recruit, renew or reinstate a member is more important to know than ever.
As a rule of thumb, if you are making net money on recruitment after all expenses, you are probably not recruiting a many new members as you could.
Aggressive marketers know you can afford to breakeven or even lose money on recruiting new members, if those members stay – on average – more than a year.
Most associations renew members in the 80%+ range, which mean most members stay for 5-years. So if your dues are $100 a year and the member is worth upwards of $500 over those years (less some level of servicing costs), you can certainly spend at least the 1st year dues ($100) recruiting those members.
Regrettably, many associations world spend far less that the $100 I suggest so never fully realize their true new member potentials.
The same holds true for renewals and reinstatements. Again here many associations have a fixed number of renewal or reinstatement efforts they do every year without thinking that many more members might renew or come back if they even did one additional effort.
Here my rule of thumb is to keep trying to renew and reinstate until the efforts begin to lose money.
Even then I would place all those lapsed members into my next new member acquisition effort.
Rick is President of Marketing General Inc, a direct marketing firm helping associations recruit, renew and reinstate members from coast to coast. Find MGI on the web at www.marketinggeneral.com