BETTER
PRACTICES
Retention
Performance
There are many factors that go into
retention rates. Some common issues that impact
retention performance include:
1. Who pays the dues?
For individual & professional societies
where the employer pays the dues, there is usually a
higher retention rate than when the individual pays their
own dues. However, in recent economic times, more & more
employers are stopping the practice of paying dues as a
way to cut costs. One CEO of a very large organization we
interviewed said he saved over $1 million by no longer
paying association dues. (His background was in accounting
& he was known as a cost cutter).
For some associations facing this problem,
we recommend re-evaluating benefits to add more of
interest to the individual, such as job banks or career
counseling.
2. Limitations on the number of
association memberships the employer will pay for.
For example, until recently many doctors
belonged to multiple associations.
Now, in the [U.S.] managed care
environment, the employer is saying we will pay for only
one. Ironically many of these doctors are making well into
6 figure salaries, but the culture is such that
some will not pay for additional associations, if it must
come out of their pocket. Besides looking at benefits,
these associations must sell their value and a shift in
culture.
There are currently 43 radiology related
associations, and it is unlikely that will be the case in
a few years.
3. Trade associations - member
bankruptcies, mergers and consolidations
Many industries are experiencing these
corporate changes...that are akin to death for an
individual (i.e. it is hard to get them to pay dues if
they are dead). Since many trade associations have a
sliding scale for dues, the best way to protect the
association is to have a high cap rate on dues (e.g.
assume that the 3 largest members will merge and set the
cap accordingly).
If your industry is going through this,
you want to not only look at retention rate, but share of
industry you are representing. We had one client who went
from 350 to 125 members due to mergers & consolidations in
the industry. But the share of the industry they
represented went from 75% to 82%. For them, that was the
more relevant measure than retention rate since they
really did not lose members, they were consolidated. Be
sure you are using the right criterion to measure what is
happening.
4. Why are members defecting (not
renewing)?
As noted above, finding out what is going
on in your industry, profession or cause is critical. You
need to understand what is causing the retention rate to
fall or rise. If I had to choose between seeing a
retention rate & understanding the facts of what was
causing it, it more important to understand what is going
on. With the facts...the research...the association can
adjust their future planning. If a lot of companies are
going out of business in my industry, can the association
help? In one association, the problem was poor service. By
improving education for the entrepreneurs buying
businesses, they improved the reputation of the product,
and increased sales, eventually creating more members as
the "pie" increased.
In another very large individual
membership association, when they finally got someone to
study the primary reason for defections, they found it was
death. The volunteer leaders & staff had not focused on
how much the association was graying (it turned out the
average age was 59, but no one had paid attention to that
change). Clearly they needed to be recruiting younger
members.
Retention rates vary from association to
association due to many factors. Many associations are so
different, therefore beware of comparing apples to
oranges.
You are much better off looking at your
industry, profession or cause. Look at your past history
and see what has been happening and what you can project
for the future.
Arlene Farber
Sirkin, coauthor Keeping Members: The Myths &
Realities, is president of the
Washington
Resource Consulting Group, Inc. in Bethesda, Maryland.
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