Thursday, October 2, 2008

Supply and Demand Applied to Membership Marketing

Posted by Princess Eva Angelica at 12:29 PM

With gas prices up and down, we are hearing a lot these days about supply and demand. So I was thinking, how does supply and demand play out with membership marketing?

Here are three observations.

  1. Demand for membership renewals is fairly inelastic. Meaning a percentage increase in dues rates generally does not translate into an equal or greater percentage drop in renewals rates.
  2. Demand for membership acquisition is more elastic. Meaning a percentage dues discount usually translates into more members.
  3. Membership supply is very elastic. Meaning it is easy to increase the number of member benefits (i.e. magazines) to meet increased demand.

What implications does this have for your 2009 planning?

  1. You may have room to increase dues rates on renewing members.
  2. You may want to try a dues discount to encourage new members to join.
  3. You can quickly and easily meet an increase in demand for more memberships, so push growth.

Let me know if you agree with these observations.

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