In the 18 months upto the end of 2006, the then 35,000-strong Institute of Physics (IoP) has enjoyed a cash-flow improvement from subscription income of well over £400k - and a 14% increase in membership retention, representing a further cash injection of £155k.
How so? Let's first look back to mid-2005. John Brindley, IoP's Membership Director, comments: "For many years we had a typically reactive and protracted reminder-based renewal process, with income trickling in throughout the year after an initial surge from the good payers and direct debits. We knew we had to do something about it but could not be certain that we could do it in-house either cost-effectively or with acceptable risk".
John Brindley decided to look outside and was introduced to Hall Associates Europe (HAE), a firm with extensive global corporate consulting experience and with a growing reputation in the third sector - and especially in membership organisations.
HAE's Founding Partner John Hall explains how things went from there. "After a short but intensive process review, in August 05 we set in hand a twin-track approach: a member contact process aimed at reclaiming those members who had lapsed in the preceding year and, in parallel, a segmentation of the IoP's database to facilitate a more structured and proactive renewal process for 2006."
Bottom Line
The 2005 lapsed member campaign saw some 1200 members return to the fold with £75k going to the bottom line which otherwise would have been lost - not to mention the long-term benefits of membership retention. Equally important was the intelligence gained on member attitudes and opinions which enabled HAE to be even better at the member contact business the next time around, in 2006.
Brindley again. "The results for 2006 were very impressive indeed. When I looked back to our January 2005 billing, I saw that after 90 days 30% of the bills were still outstanding. At the same point in 2006 only 7.5% hadn't paid. In all, Hall Associates contacted just over a third of our members last year: 12,000 people who paid, on average, 60 days earlier than usual - a total amount of £312,000."
Brindley's Deputy, Sue Lippmann goes further. "Inevitably there will be some members who are going to leave regardless. The fact that we have speeded up the lapsing process means that not only is it less of a demand on scarce resource, but also we no longer send journals and provide services to members who have not paid. And on a more positive note, we now have thousands of members who have been delighted to be contacted by their Institute and who now feel much more engaged."
Value Statements
The HAE view is that member engagement is all-important. The company recently surveyed 25 membership organizations and found that less than 15% of them articulate the full value realised by their member, at the time of renewal. Stuart Wilkinson, Senior Partner, adds: "Our experience tells us that perceptions of value for money, or the lack of it, are the key drivers behind late renewal, or lapse. Engaging positively with members through a strong value statement is a strong stimulant for renewal".
So successful have Hall Associates been at the IoP that they have been retained for a third year. Each month they receive renewal data for that month and segment to determine which members high risk members should be contacted straightaway. In the first two months of this year, the team has already contacted some 400 members, bringing in around £28,000.
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