Moving to auto renewal can be as easy as clicking an option in your association management software and setting up the messages designed to lead members through the renewal process or as complicated as trying to sell the concept to volunteer leaders reluctant to change. Regardless of what you face, consider the following:
Think carefully about implementation. Are you going to force members into auto-pay or give them an incentive to join? “I think a carrot is better than a stick,” says Robbie Baxter, author of the forthcoming book The Membership Economy. “Use incentives to get them to sign up and then offer them even more based on their membership level. Think about the behavior you want to reward.”
Think about annual vs. monthly. “One of the things about a monthly payment is that it becomes a part of their life,” says Baxter. “If it’s an annual decision, the number becomes really big so it becomes a budget question every year.”
Test options. Select a subset of your membership to test various pricing strategies. In addition to determining if you’re going to bill annually, quarterly, or monthly, consider tiered pricing which allows you to offer richer benefits at a higher price, possibly resulting in more income for your association. (Take a look at Survey Monkey, TimeTrade and Carbonite’s online pricing pages to get an idea of how this might work for your organization.)
NAIFA’s Seth Ewing admits, “It took some heavy testing and trial runs to work out the finer details for billing. There were some concerns over the increase in bank fees associated with a monthly charge vs. a onetime payment, however, the increased retention rate eased these worries.”
Create a strong business case. If your association is one in which changing how you collect dues would require board action, carefully consider your approach. Author and association consultant Seth Kahan offers this advice: “The CEO needs to have a clear case: a business case and a mission case to show why this will benefit the mission of the organization and benefit the members in the long run and why it makes good sense in terms of business.” The chances of success will be higher if championed this way.
As you consider the benefits of automatic renewal, don’t lose sight of the importance of having a strong value proposition for members and being clear regarding how auto-renewal works. It’s difficult, if not impossible, to sell anything that doesn’t have perceived value. Asserts Baxter, “If an association offers enough value, then I believe a member becomes totally insensitive to price.” When this happens, membership becomes a “must have” rather than a “nice to have.” Ultimately, isn’t a value proposition that sells itself what we’re all seeking as association executives?
Interested in why your association should offer auto renewal? Click here for my previous article on the subject.