2013 Benchmark Survey of Membership Organizations

This is the third annual Benchmark Survey of Membership Organizations. This survey focuses on the business and sustainability of the Canadian membership organization with a particular focus on the eight elements of the High Performance Membership OrganizationTM. It is the only one of its kind in Canada. The survey was conducted in the fall of 2013 using a combination of telephone interviews and online responses. The respondents were either Canadian organizations or the Canadian arms of international organizations. There were approximately 100 respondents.

Membership Organization Defined

By membership organizations we mean non profit entities who have dues-paying members and whose primary activity is providing services to those members.

This is a specialized niche within the non profit sector with its own unique characteristics. Membership organizations are typically self-sustaining and cannot rely on government assistance or donations.

Just like service companies in the for profit sector, they need to provide value to the people that they serve or they will not survive.

A membership organization is a business and must be run as one to be sustainable.

There is very little data available for the membership organization niche. The purpose of this survey is to help fill that void and to provide organizations in the sector with critical information about their peers and to give them the information they need to thrive.

The Respondents

The membership organizations surveyed include entities of all sizes. Respondents’ annual revenue ranges from less than $10,000 to more than $25 million.

Respondents include organizations that represent an industry, a trade, a profession or a special interest. This includes organizations whose members are primarily individuals, and those whose members are primarily corporate.

Respondents by Revenue and Type

REVENUE PER ANNUM

TYPE OF ORGANIZATION

TYPE OF MEMBER

Survey Highlights

Interesting Correlations

We ran a number of cross tabulations to find out if there are any relationships between organizational attributes or practices and performance. Some of the results were predictable; some were surprising and others quite illuminating. Here are the correlations we found interesting.

TRACKING METRICS

The results suggest that organizations that track their metrics are more likely to be more successful in attracting and retaining members, and also in attracting and retaining volunteers, and using them effectively.

  • The majority of respondents are doing little to track metrics. About 40% of respondents track their member retention rate. About one third of respondents track member satisfaction. Only 21% track their attraction rate.
  • Those who track member attraction and member satisfaction are more likely to rate their ability to attract new members as Very Good or Excellent.
  • Those who track member retention and member satisfaction are more likely to rate their ability to retain members as Very Good or Excellent.
  • Those who track member engagement are more likely to rate their ability to use volunteers effectively as Very Good or Excellent.
  • Those who track member satisfaction are more likely to rate their ability to retain volunteers and to use them effectively as Very Good or Excellent.
  • Those who track a greater range of metrics are more likely to rate their ability to retain members and to attract new volunteers as Very Good or Excellent.

TOP 3 CHALLENGES

The results show some interesting relationships between the top three challenges cited by respondents and their performance with volunteers. Member engagement is related to attracting new volunteers and not surprisingly, so is competition.

  • Those who cited member engagement as one of their top three challenges are more likely to rate their ability to attract new volunteers as Fair or Poor, and correspondingly less likely to rate this ability as Very Good or Excellent.
  • Those who cited competition from other associations as one of their top three challenges are more likely to rate their ability to attract new volunteers as Fair or Poor, and correspondingly less likely to rate this ability as Very Good or Excellent.

REVENUE AND PERFORMANCE

Does having more revenue mean we perform better? Not really.

  • Issues Management: Higher revenue respondents are more like to have an issues management program but they are no more likely to run it on a proactive (versus reactive) basis.
  • Member Attraction, Retention: There is no obvious relationship between revenue per annum and the ability to attract new members. Nor is there a revenue relationship with the ability to engage or retain members.
  • Effectiveness of Marketing Plan: For those organizations with a marketing plan to attract and retain members, the effectiveness of the marketing plan is not correlated with higher revenue.
  • Volunteers: Higher revenue respondents are more likely to have a strong ability to attract new volunteers and to use them effectively, but the ability to retain volunteers seems unrelated to revenue.
  • Value for Money: Respondents with more than $1M in annual revenue were more likely to cite "Demonstrating value for money" as their top challenge in sustaining and developing the organization. This was not a significant factor for smaller organizations.

REVENUE TRENDS

What attributes are consistent with organizations who are experiencing a 3 year upward trend versus a three year downward trend in revenue?

Most of the interesting correlations are related to organizations with a downward revenue trend. The downward trend in revenue seems unrelated to revenue per annum.

These organizations were less likely to have a strategic plan and much less likely to have an implementation plan. Their board members are engaged but their board meetings are not very productive.

They have less focus on attracting and retaining members and they are more likely to be comprised primarily of corporate members and to have experienced structural change in 2012. They were also less likely to have an issues management program.

They were more likely to have a documented strategy to attract and retain sponsors but less likely to have a documented marketing plan to implement the strategy.

Strategic Planning and Implementation

  • Strategic Plan: 15% of all respondents do not have a strategic plan. For respondents with a downward revenue trend, a somewhat higher percentage (36%) do not have one.
  • Implementation Plan: 82% of all respondents have an implementation plan but only 57% of respondents with a downward revenue trend have one.

Board Efficiency and Productivity

  • Efficiency: 34% of all respondents consider their board to be Highly Efficient in making decisions and accomplishing goals. For respondents with a downward revenue trend, a much lower percentage (18%) get the same score.
  • Productivity: 38% of all respondents consider their board meetings to be Highly Productive whereas only 9% of respondents with a downward revenue trend get the same score.

Membership Strategy and Marketing

  • There is a relationship between the revenue trend and having a strategy and a marketing plan to attract, engage and retain members, and being able to articulate the MVP (member value proposition).
    • Membership Strategy: Approximately 70% of all respondents have a strategy to accomplish this. For those respondents with a downward revenue trend, a much lower percentage (46%) have a membership strategy.
    • Membership Marketing Plan: Approximately half of all respondents have no member marketing plan. For those respondents with a downward revenue trend, a much higher percentage (73%) have no member marketing plan.
    • MVP: 32% of all respondents are Highly Confident that all of their board members can clearly articulate their MVP. For those respondents with a downward revenue trend, a much lower percentage (18%) are Highly Confident.
    • Ability to Attract New Members: 20% of all respondents ranked their ability to attract new members as Very Good or Excellent. None of the respondents with a downward revenue trend ranked themselves at this level.
    • Ability to Retain Members: 44% of all respondents ranked their ability to retain members as Very Good or Excellent. Only 27% of the respondents with a downward revenue trend ranked themselves at this level whereas almost half of them ranked themselves as Fair or Poor.
    • Ability to Engage Members: 25% of all respondents ranked their ability to engage members as Fair or Poor but this level rose to 46% for respondents with a downward revenue trend.

Top Challenge

Interestingly, the top challenge cited by respondents with a downward revenue trend was not member attraction, member retention or member engagement. It was “Lack of funds or staff”. The second most often cited challenge was "Raising the organization's profile". Is this simply willful blindness or is there another factor at work here?

Corporate Membership

  • There is a relationship between the revenue trend and type of member. Approximately 30% of all respondents have primarily corporate members. For those respondents with a downward revenue trend, a much higher percentage (67%) have a primarily corporate membership.

Does this mean organizations with corporate members were more inclined to lose members or does it mean that their revenue is more dependent on member dues?

Structural Change

  • There is a relationship between the revenue trend and structural change. Approximately 30% of all respondents made structural changes in 2012. For those respondents with a downward revenue trend, a much higher percentage (55%) made changes.

Did the trend prompt the change in 2012? There is no similar relationship for structural change in 2013.

Issues Management

  • There is a relationship between the revenue trend and issues management. Approximately 60% of all respondents do not have an issues management program. For those respondents with a downward revenue trend, a much higher percentage (82%) do not have an issues management program.

Is this cause, or effect?

Sponsorship Strategy and Marketing

  • There is a relationship between the revenue trend and having a strategy and a marketing process to attract, engage and retain members, and being able to articulate the sponsor value proposition.
    • Sponsorship Marketing Process: Approximately 70% of all respondents have a documented sponsor marketing process. For those respondents with a downward revenue trend, only one third have a documented marketing process.
    • Sponsorship Results: Not surprisingly, those respondents with a downward revenue trend ranked themselves much lower in terms of the results of their strategy and marketing process.

REGULATION OF THE PROFESSION OR INDUSTRY

If your membership belongs to an industry or profession that is regulated it seems to have an impact on market penetration and the trend in your membership numbers.

Market Penetration

  • There is a relationship between regulated industries/professions and market penetration. Half of all respondents have penetration rates greater than 50%. For those respondents in a regulated industry or profession, a much higher percentage (70%) have penetration rates exceeding 50%.

This can cut both ways. Anecdotal evidence suggests that in a regulated professional environment where the organization is not the regulator and does not provide certification or credentials, penetration rates may be lower than in an unregulated environment. On the other hand, where the organization does have a structural role to play, a regulated environment can help with penetration.

Membership Trends

  • There is a relationship between regulated industries/professions and the trend in membership. Approximately half of all respondents saw upward trending membership over the 2009-2012 period. For those respondents in a regulated industry/profession, a much higher percentage (74%) had an upward trend.

Summary Results

TOP 3 CHALLENGES

The top three challenges cited by respondents in sustaining and developing the organization were:

  1. Attracting and retaining members
  2. Demonstrating value for money
  3. Raising the organization's profile

REVENUE... CONTINUES TO STRENGTHEN

Almost half of the respondents saw an upward trend in their revenue over the 2009-2012 period and approximately 60% expect this to continue. The most positive revenue trends are being experienced by organizations with $1M-$5M in revenue.

RESERVES...DITTO

The percentage of respondents with financial reserves has dropped from approximately 80% in 2012 to approximately 60% in 2013. However, the relative value of reserves for those who have them, has increased. In 2012, only 34% of respondents had reserves equal to more than one year of operating expenses. In 2013 this increased to 50%.

However, the percentage of respondents using their reserves remains about the same, around 30%.

COSTS...THEY'RE UP TOO

The majority of respondents experienced higher costs in 2012 and 2013.

MEMBERSHIP TRENDS...OPTIMISM CONTINUES TO DECREASE

Optimism has been decreasing steadily for the past 3 years. In 2011, 80% of respondents expected that they would have more members in the current year. In 2012 only 60% of respondents expected higher member numbers and in 2013 the number dropped a little further to 56%.

VALUE PROPOSITION TO MEMBERS...IT'S UP AND DOWN

In 2011, only a third of respondents were highly confident that their board members could clearly articulate their member value proposition to a prospective member. In 2012, the percentage rose to 47%. In 2013 it moved back down to 32%.

Two-thirds of respondents have a documented marketing plan to retain and attract members but only 32% of them describe the effectiveness of the plan as Very Good or Excellent.

METHODS TO ATTRACT NEW MEMBERS...IT'S PERSONAL

The most effective methods for attracting new members are regional events and education events. The next most effective methods are a national or provincial conference and referrals.

SPONSORS...OPTIMISM CONTINUES TO DECREASE

Optimism has been decreasing steadily for the past 3 years. In 2011, about 70% of respondents expected their sponsorship revenue to increase. In 2012, 60% expected to see an increase and in 2013 the percentage dropped further to 31%.

VALUE PROPOSITION TO SPONSORS...WE HAVE SOME DISTANCE TO GO BUT WE'RE LEARNING

In 2012, fewer than 20% of organizations surveyed were highly confident that their board members could clearly state their value proposition to a prospective sponsor and only 30% had a documented strategy to accomplish their sponsorship goals. In 2013, only 6% were highly confident of their directors’ ability to articulate the sponsor value proposition, but now over 50% of respondents have a documented strategy and just over 40% of them describe the results of their strategy as Very Good or Excellent.

STAFFING AND CONSULTING...NO CHANGE

The majority of respondents had no plans to increase or decrease staff (59%) or contractual/consulting services (61%) in 2013. An exception is the organizations with $1M-$5M in revenue. Approximately half of this group planned for staff increases in both 2012 and 2013.

BOARD EFFICIENCY, ENGAGEMENT AND PRODUCTIVITY...A MIXED BAG

Our respondents' perceptions of board engagement and efficiency are slightly higher in 2013 than in 2012, but estimates of productivity are down significantly. Only 38% of respondents' describe their board meetings as Highly Productive compared to 57% in 2012.

Is productivity really dropping or are our expectations increasing?

PLANNING FOR THE FUTURE...AN AREA OF STRENGTH

Like last year, virtually all of the organizations surveyed have a current strategic plan and approximately 80% of respondents have an implementation plan. 70% of the respondents describe the results of the strategic plan as Very Good or Excellent.