The biggest benefit of a membership program is sustainable revenue that is also predictable. A reliable source of income year after year is achievable if the right elements are put into place. A membership program can be a part of your overall Annual Campaign or it can actually be the entire campaign depending on how many levels of membership you want to offer. Will your membership program be just about smaller donors or will your major donor program be incorporated into your membership program?
Our membership program is a tangible-benefit driven program and is separate from our other giving campaigns such as Historic Preservation or Community Outreach. With other programs the benefit is good-will, but the benefits of Membership are about getting something in return – free parking, advance notice of show, access to better seats or advance purchase options. You can see our list of benefits here.
Membership programs come in all shapes and sizes, but for ease of explanation let’s start with how to get and retain just 10 members and then grow that into a membership program.
The major components to a membership program are:
A Prospect or Acquisition Campaign
A Renewal Campaign
A Lapsed or Reinstatement Campaign
Additional Gift or Special Gift Campaigns
The key to a successful Membership Program is consistency and persistence. You have to keep it going all year every year. One person can kick it off but eventually you will need to add staff as you add members.
Is a Membership Program Appropriate for your Organization?
Membership programs require substantial upfront commitment of financial resources and continued administrative support. Before any group undertakes a membership program, it should consider the following:
- Is the organization achieving its mission and financial objectives without a membership program? If so, why is one needed? Maybe a capital campaign or special appeal for funds makes more sense.
- What dues structure will be required to help meet the revenue goals of the organization? Will dues be prohibitively high or exclusionary?
- Can the organization afford to invest/”lose” money for the first few years to build a roster of dues paying members? Net losses are predictable during the start up phase.
- Does the organization have the staffing and administrative support necessary to support a membership program with services and communication that will motivate donors to renew?
To get your first members you need to decide what they are joining, why they are joining and what will you give them in return for joining.
The Purpose of a Membership Program can be simply ongoing preservation efforts for your theatre – “ Funds from our membership program will be used for ongoing maintenance and preservation of our beautiful XYZ Theatre. Like an old house, there is always something that needs attention.”
Our program at the Paramount is very loose. Gifts support the theatre in general but the focus is really on the benefits of membership. We also have a Film Membership Program called the Film Fan Club. At the very highest level we have our Century Club . At this level members are personally invited to join. This group is attached to our 100 year anniversary coming up in 7 years. The goal is to have 100 couples giving $10,000 each year with 10% of their gift going into and endowment. In our second year we are already at 50 members – four of them are giving $50,000 annually.
Maybe you’ll have a membership program centered around your season of shows – “Become a member and get access to the best seats. Remember subscribers who donate receive priority status.” That is true of our program. Members get better seats when they subscribe.
The important thing is that your members have a sense of ownership over the purpose. “Thanks to you, we are able to make tickets affordable for the entire community.” or “Thanks to support from our members, we were able to put a new roof on the building.”
BTW – members and donors are pretty much the same thing. Membership is just one way of getting someone to donate.
So determine what your membership program is about and then determine what benefits you can give in return for joining. The best benefits are the ones that have little or no cost to you. If a benefit has a monetary value then that value must be disclosed for tax purposes. An example of a benefits with no monetary value would be things like access to tickets before they go on sale to the general public, reserved seating or behind the scene tours. Benefits that have a monetary value could be free tickets or a complimentary CD of the concert. Items that have a value but are optional do not need to be disclosed. An example might be free popcorn when you come to a film. That benefit has no monetary value associated with it because the members may or may not choose to take the popcorn.
The biggest draw for our members is advance purchase options. A week before tickets go on sale to the general public, members get an email telling them to call now and reserve the best seats. By the way, we have collected over 30,000 email addresses from people buying tickets on-line. If you are not a member, you get an email telling you about the show and letting you know that if you become a member now you can purchase tickets before the on-sale date. We get lots of members this way.
The best benefits are also those directly tied to the purpose of the membership program. Things that allow your members to better enjoy your theatre (priority seating, free parking) will increase the chances that your members will join again next year. At some level maybe your member gets to be the sponsor of a movie or show and see their name on the marquee or maybe they get to decide what school or charity will receive the free tickets in your outreach program.
Members want to hear about your progress. They want to belong to a “winning” program. Don’t be afraid to celebrate big numbers and large gifts. People don’t want to give to save a sinking ship. They want to help the ship sail further!
Give a worthwhile benefit at every level and make sure your members have a tangible reason to step up to the next level.
For $50 you get advance notice of shows.
For $100 you get to purchase tickets before the general public.
For $1,000 we will call you and ask you if you want to sit in the front row!
So you are looking for ONE member to start it all off. Where does he/she come from?
A prospect or acquisition campaign identifies potential members and how to reach them.
Do you have a list of donors who gave to your capital campaign?
Does your box office have the email addresses of everyone who purchased tickets on-line to your last show?
Do you give tours of the theatre on a regular basis.
Will your Board Members open their Rolodex for you?
Do you need to purchase lists from a mail-house?
Remember, volunteer ushers can join too.
As a destination you have lots of ways to acquire names of prospects when they come to your space.
Put out a book in the lobby asking for names and addresses so you can send them info on upcoming shows and membership programs.
Drop your business card in the jar to win tickets!
Register here for a free soda and popcorn!
Do you coordinate a special fund-raising event? If so, make sure you capture every name and address of every attendee.
You are ALWAYS looking for prospects.
So how will you reach them. A letter? An email? A phone call? Face to face? The answer is all of the above. Mail to your previous donors. Email to your ticket buyers and have your tour guides hand out membership information. Organize a phone bank with your Board or your ushers. Hello. We’re calling tonight with a special membership offer!
The fact is you probably need about 100 names to produce one member. Successful direct mail prospect campaigns might only produce a 1-2% response rate. That means 1,000 letters might only get you 10 to 20 members. Email response rates are even lower with .5% (point 5) being a high response rate depending on the list – but emails have very little cost. Face-to-face has the highest pay off in both response and level of giving. It’s a lot of work, but don’t worry because an economy of scale will begin to kick in.
BTW – the better the list, the better the response rate. The better the letter, the better the average gift size. We’ve had a great deal of success mailing to people who have come to show with a letter asking them to become a member to keep the theatre open and get a better seat the next time they come.
So let’s find that first member and go from there:
Mail 1,000 letters to past ticket buyers (or other customers) asking them to consider becoming a member at the $100 level to get advance ticketing options on future shows or free popcorn at all film screenings. Funding from our members keeps the theatre in tip-top shape and keeps ticket prices affordable for everyone. Plus you get the best seats to the best shows!
You could spend about $1.50 per mail piece and only get ten (10) members. You might spend about $100 in free popcorn or other benefits for your ten new members. You just spent $1,600 to get $1,000. But don’t worry.
During the year here is what should happen:
RENEWALS (where the money is)
First you can expect that if you treat them well and give them their benefits at least 60% will renew next year. So now you have your first ten members. In the renewal campaign you only have to mail 10 letters to those 10 members costing you just $15. Six of them should renew. You just spent $15 and received $600! Imagine if you were renewing 300 members! You might have to mail them more than once.
But during the year you collected or acquired another 1,000 names from people buying tickets or registering for a free gift in the lobby or signing up to be on your mailing list to receive your calendar of events. You spend another $1,600 to get $1,000 from 10 more members but at the end of the year you have 16 members (10 new and 6 that renewed) . So you spend $24 mailing to all 16 and renew 10 of them AND two of them decide to step up to a higher level and get their name on the marquee at the $500 level. One of them comes back at $1,000. So this time you spent $24 but received $2,700.
Remember each year you must renew your current members and you must acquire more new members than you lose. Eventually the numbers will begin to grow exponentially.
Eventually your revenues will far exceed your expenses.
The idea is that acquisitions or prospecting campaigns generally lose money but you should see them as an investment in your future. You make the money back and then some when you go through renewals.
So let’s talk more about Renewals:
People get a great deal of mail. They put it aside and forget about it. You might get them at a bad time and they threw it away without opening it. In fact, mailing to someone five or six times to get them to renew is very normal. But don’t worry, some will renew with that first letter. The letter cost you $1.50 but they gave you $100. Even the person who took five letters only cost you $7.50 to get you $100.
Pay attention to your response rate for each letter. It will be easy to determine when to stop mailing to a list to avoid throwing good money after bad. A first renewal letter might get a 30% response rate. The next three mailings to the same list might decease to 10% and the final letter might drop all the way down to 2%. Eventually if you monitor the response rate it will make sense to stop mailng to those that haven’t responded and start mailing to new prospects. Keep mailing as long as your response rates stay high. Don’t worry about too many letters.
Trust me, when I worked for PBS in Dallas we mailed as many as 12 letters before we gave up on you. Out of thousands of members and thousands of letters, I got very, very little complaints about the amount of mail. And after the 12 letters we sometimes assigned you to a telemarketer.
Don’t forget you also have emails, phone calls and face to face meeting to support your efforts.
Members joining at higher levels of $1,000, $5,000 or $10,000 are most likely responding to a personal request and not a letter… but even the mail produces surprises. We have gotten many $1,000 members after only mailing them one letter. Your challenge of course is now how to turn that $1,000 member into a $10,000 member!
We host cocktail parties on-stage and invite members at higher levels. At these parties we talk about our 100 year anniversary and the Century Club. Our benefits at this $10,000 level are hard to resist. A free subscription to four shows. A free table at our annual gala. Advance purchase to every show – even rentals! Access to our Opera Boxes. Free drinks whenever you come to the theatre. Fund-raising immunity for the rest of the year. At the $50,000 level we buy you dinner at a nearby restaurant when you come for a show. They also get a special marker on their seat when they attend a show so that everybody knows they are members of the Century Club. We recognize them from stage. Please note: we have one person on staff dedicated to just this program. CC members call her for tickets and she makes sure that every CC member who visits the theatre gets greeted, seated and thanked again and again.
BUT WE HAVE ONLY JUST BEGUN. We still have names that haven’t responded to the above efforts.
Remember those 4 members who didn’t renew that first year. Every so often mail them again and ask them to come back. You might even make personal phone calls to encourage them to come back.
And how about the 990 people who didn’t respond to your first prospect letter. Mail them again and you might be surprised that another 5 members join. Mail the list one more time and you might find another 3. Remember those 8 members have a life-time value to you that is far greater than your initial expense.
YOU MUST KEEP PROSPECTING. You need to keep adding names to overcome the attrition rate because some of your members will not renew. Keep prospecting and keep growing your numbers. Eventually your renewal rolls will be great enough to more than fund your prospecting efforts.
Our best prospect effort is the weekly email of events to all of our on-line names. Eventually someone is going to see a show that they really want to get the best seats – and that’s when you have them.
ADDITIONAL GIFTS / SPECIAL GIFT CAMPAIGNS
So let’s look at the typical lifespan and value of one member over five years.
You mailed them 3 prospect letters to get them to join.
You mailed them 5 letters each year to get them to renew. (5 letters x 5 years = 25 letters). Each year you asked them to increase their gift by $25.
In their third year they didn’t renew right away so you sent them a reinstatement letter and eventually called them.
Each year you mailed them an Additional Gift letter and they responded 2 of the 5 years with a $200 gift.
This one donor had a life-time value over 5 years of $1,150. ONE donor nearly covered all the costs from the original prospecting piece. The other 9 donors were all profit!
If you have 1,000 members your number over five years would be $1,150,000. AND that assumes that your members only give $100. In fact, some will give much more and some will give less.
At my theatre the total program (including our major donors) has about 2,000 members and we generate nearly $1 million each year. We have four people dedicated to this effort and we use volunteer ushers to help get the mail out.
When I worked for PBS in Dallas we had 80,000 members. We sent out over 1 million pieces of mail each year but the program generated $16 million annually. We had 16 employees and several consultant groups to keep it going. We tested letters and studied renewal rates. We could predict pretty closely just exactly how much each letter would generate.
RENEW. RENEW. RENEW. RENEW. RENEW.
Don’t give up. Reinstate.
Celebrate with your members often.
Give them what you promised. AND THANK THEM!
If you don’t ask for a gift, your prospects won’t give you a gift, and if you don’t ask for a bigger gift, they won’t give a bigger gift.
HERE IS A LINK TO ANOTHER GOOD SOURCE FOR MEMBERSHIP PROGRAMS (Please note: I do not endorse the person/company in this link – I just thought it contained helpful information.)
I hope this helps.