Is Auto-Renewal Membership a Good Option For You?
Your members live in a subscription economy.
Many of them pay auto-renewing monthly fees to watch movies (Netflix), listen to music (Spotify), cook dinner (Blue Apron), or enhance their wardrobe (Stitch Fix). Would some of them do the same for association membership?
The data says yes. More associations now offer auto-renewal monthly membership because the demand is there. In our last post, we explained why this is a growing trend. With auto-renewal – also known as perpetual membership – monthly dues payments are automatically charged to the member’s or employer’s credit card or made via an electronic funds transfer from a checking account.
“23 percent of members opt into automatic renewal at associations that offer it, per EnSYNC’s The State of Perpetual Memberships report.”
According to Marketing General Incorporated’s (MGI) 2016 Membership Marketing Benchmarking Report, 29 percent of associations now offer automatic renewal and 41 percent of them offer installment plans as an alternative to annual payments.
How to determine if auto-renewal membership is right for your association
Even ideas that are trending in the association community must be backed up by data based on your own member and market research.
Know who pays for your members’ dues.
Younger or early career professionals who don’t have a professional development budget to spend.
- Professionals in between jobs.
- Retired professionals.
- Small businesses or start-ups with cash flow challenges.
- Self-employed, freelance, or contract workers.
Know how members prefer to pay for dues.
Get a sense of your members’ comfort level for this method of payment.
- Are they already paying dues by credit card or electronic funds transfers?
- Or, are they still stuck on the idea of paper checks?
- Do members make purchases, register for events, or pay dues online?
- Or do they still use mail and fax for these transactions? (Hopefully not fax…)
Poll your members to gauge interest.
Don’t try to sell your members something they won’t use. Find out if there’s an interest in this plan.
- For those whose employers pay their dues, will this method work?
- Will their finance department approve?
- Will members be comfortable using their own credit card, and if so, how will they be reimbursed by their employer?
Do you have the technology in place to make this work? Ask your AMS or CRM vendor if they can support auto-renewal or recurring billing and payment functionality. Make sure you have the appropriate integrations in place too. Don’t forget your chapters in this, if they collect the dues, they’ll have to have access to the technology as well.
With auto-renewals, someone – your association or a third-party – has to securely store credit card numbers and bank account information. We recommend using a third-party partner who is an expert in these activities to ensure PCI compliance and a higher level of end-to-end data security than your association can provide. Make sure the partner is PCI Level 1 compliant.
If you don’t use a third-party partner, the PCI recommended practice for secure data storage is tokenization. Tokenization replaces credit card numbers with a unique, generated placeholder or ‘token’ that makes the actual card number unrecognizable and unusable by outside parties.
Will your members trust your association to securely handle this monthly transaction? You may have members who’ve had a bad experience with automated monthly payments elsewhere, for example, members who belonged to gyms that went out of business or fell victim to bait-and-switch magazine subscription scams.
Be prepared to explain how their bank or credit card data will be protected. State law may require you to do this, but even if it doesn’t, provide security information on or linked from the web page where you offer this payment plan. It wouldn’t hurt to sporadically remind them about your security efforts throughout the year, perhaps in some of the automated notices you send in advance of their payment date.
Once you find out that a worthwhile portion of your membership is interested in an auto-renewal membership plan, it’s time to make a business case to your leadership and prepare for implementation – the subject of our next post.
According to the MGI report, 43 percent of members pay all or some part of their membership dues.
Lower monthly dues payments are more appealing to the budgets of many members and prospects.