Membership Discounts and Other Crazy Stuff

18 Apr Membership Discounts and Other Crazy Stuff

Well-Meaning Tom: Thanks for all your help. Per yesterday’s meeting, I’ve set up a Doodle poll for selection of our date for the full day meeting.

DA: What does this mean? “Membership special – 50% off new and renewals March 28 – June 3!” (It was in your email signature.) It sounds like you are offering half off memberships.

Well-Meaning Tom: Yep. The membership committee increased our membership rates last year from $50 per household to $110 per household, and added additional layers of membership above and below that, with varying benefits. For instance, I mentioned the retail discount program and the Tall Oak program.

The new rates were much higher than those of other land trust organizations but were more in line with the rates of The Natural History Museum and Botanic Garden. Rather than lower these rates, the Board authorized a temporary sale on memberships back to the original rate.

DA: With all due respect, Tom, that’s just crazy. You are confusing several different concepts here, and it will confuse your donors and members, too. Please remove that line from your email signature before you do any more damage.

Well-Meaning Tom: What’s wrong with that? We really need the money, and this way people think they’re getting a deal.

DA: Membership is not a “fee” or a “cost” and therefore can’t be “discounted” by definition. Think of it like a birthday gift to a close relative. You would be completely confused if they told that they were giving you a “deal” this year by allowing you to only give them half of a present.

Nonprofit membership is not retail – it’s philanthropy. Membership is a “gift.” Gifts of ANY size should always be accepted, encouraged, and acknowledged.

Well-Meaning Tom: But we can’t give discounts at our native plant sale or on our nature hikes to everyone who gives us a dollar.

DA: As a practical matter alone, it costs money each year to service members – things like sending a thank you letter, mailing news and information, preparing eNewsletters and maintaining the website, sending renewal information a year later, and yes, even providing discounts. For most organizations, this amounts to $20 or so per member, which means that providing these “benefits” to people giving less than $20 really doesn’t make any sense.

So organizations routinely establish a minimum threshold gift – usually $25-35. The main idea here is that it is low enough to not be a barrier to giving at all. Again, you raise money from people who already give you money, so the idea is that you want the threshold to be low enough that lots and lots of people will give. Then, once they are at the table, you work to increase their gift every year. So $35 members get asked to give $50, $50 members get asked to give $100, and so on.

It’s always their choice, because it’s a gift.

Well-Meaning Tom: I don’t understand. If people get the same benefits for $35 that they would for $100, why would anyone ever give $100?

DA: First because they love you, second because you are doing something that ranks high on their priority list, and third because other people they know and respect are doing the same thing.

Well-Meaning Tom: So we should just set the membership at $100 then?

DA: Well, this is where testing comes in. You want to set the minimum threshold gift as high as possible without affecting results. The last time I tested $25 versus $35, there was no difference in the returns. I just made $10 more per member. When I tested $100 versus $35, I got fewer returns – but I netted more money.

So if my goal was to engage more people – like for a new member mailing – I should ask for $35.

If my goal was to raise more money – like for a member appeal letter – I should ask for $100.

Well-Meaning Tom: So we should just set the membership at $35 then?

DA: Sort of. I do recommend that you drop the minimum membership back to at least $50, if not $35, and drop the whole idea of discounted membership, or membership “sales.” I also recommend that you simply have “levels” of membership – unnamed – at $35, $50, $100, $250, and $500. The renewal request is therefore, “Last year, you gave $X. Would you consider increasing your membership to the $Y level this year to make even more of this amazing work possible?” Whatever they gave last year, ask for the next level higher, but offer both on the response card – what they gave last year and what you are asking for this year.

Well-Meaning Tom: So if they joined as an individual last year, ask them to join as a household this year?

DA: Again, Tom – that’s just silly. There is no real difference between individuals and households until you’re working with people wealthy enough to have pre-nups. Think about it – what do you offer to households that one person couldn’t get with an individual membership? Pretending there is a difference is just confusing.

Well-Meaning Tom: OK so memberships start at $35 or $50 and you’re saying I should ask for $100 in my appeals?

DA: No, I’m telling you that you should test it.

Cheers,

-da

Photo by Jackson Allen