16 Stay Forever Young: Avoid Aging with Your Members – The Forever Transaction: How to Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave

16 Stay Forever Young: Avoid Aging with Your Members

Pål Nedregotten is the EVP of Amedia, Norway’s largest publisher of local media titles.1 For several years, Amedia has been revamping its approach to creating news worth paying for, using a subscriber-first strategy. The leaders learned a lot. They learned that what their editorial team produced most was read least. Local readers prioritize transportation, healthcare, and social, crime/police/legal, real estate, and accidents/incidents. They didn’t read as much about culture (which comprised the highest number of stories), politics/public sector, or international sports coverage.

Readers loved hyperlocal live video feeds, even with basic recording quality. One of the most popular digital articles featured a live feed of the minister of fisheries visiting a local village to talk about fishing rights. And subscribers loved having access to third-tier Norwegian football (soccer), something the television stations didn’t bother with. Amedia discovered that one reason younger audiences weren’t subscribing (or reading) their titles had less to do with “millennials don’t like news” and more to do with “millennials don’t like how we’re doing news.” Most of the articles were about older people, dealt with topics older people found interesting, and featured photos of older people.

Amedia had been serving its existing subscribers so well that it was ignoring its future. As a result of this assessment and refocusing, the organization was able to attract a younger base of customers and identify new ways to generate revenue for formerly struggling local papers.

While Amedia recognized the problem and adapted, many organizations don’t think it’s an issue to have an aging cohort. From newspapers, to professional associations and nonprofits, to country clubs, many of the longest-standing subscription businesses are risking the trap of becoming irrelevant by focusing too much on longstanding members.

The Dark Side of Loyalty

Many organizations enjoying great success with a loyal cohort cater so much to their current members that they forget to stay relevant for tomorrow’s members. Longtime members are often engaged and vocal. They may serve on an advisory board. In a nonprofit, they may have governance roles, so their voices are powerful. In many member-oriented organizations, the employees are also treated like members. While this is often a good thing, employees can age along with the customer cohort. As a result, the organization lacks a diversity of voices and continues to offer products, processes, and services aligned with the needs of the aging cohort.

When you see a customer-centric organization with aging members, it’s often because the organization has stopped listening to tomorrow’s members—both their prospects and their newest subscribers. The organization may have begun as a disruptor, appealing to edgy prospects looking for a better way. But with success, that organization may grow insular and immutable. It looks and behaves as it did 20, 30, or more years ago. And it exhibits its greatest loyalty to existing members, rather than the mission of those members in its entirety. As a result, the organization’s offerings are no longer relevant to new prospective customers, who are still considering alternatives.

The Problem with Loyal Congregations

Pastors, rabbis, priests, and other religious leaders often struggle to attract and retain new members in the Membership Economy. For better or worse, prospective congregants sometimes behave like consumers, especially when making a decision about which organization to join. These modern seekers have access to better information about options; what once worked to attract members may not work anymore. Having a majority of elderly parishioners can be a signal that current offerings aren’t “competitive” or relevant to parishioners in 2020. Members who joined a long time ago may not have “shopped for alternatives” since.

In many cases, religious organizations find that their services and approach were optimized at peak appeal when today’s members first joined. Once organizations enjoy some measure of success, they often stop innovating, thus becoming less able to attract new members. If you have an older community, it’s tempting to create services optimized for that current membership—after all, they’re the ones you see every day, and they’re the ones who speak up. It’s “customer-centric” right? But beware of focusing only on today’s (and not tomorrow’s) members. If all of your programming options are held at midday and have words like “retirement” in the title, it’s exponentially harder to reach working adults and families. How can you evolve and innovate your programming to serve the working mom? The millennial? The college student?

This problem can be exacerbated by a governance structure in which longtime members have the most power. Many churches, synagogues, and mosques are led by older people who have been members for many years. It’s great to have the wisdom and long memories of such members, but organizations need to hear the voices of tomorrow’s members too, or they risk not attracting them.

An aging cohort suggests that the organization has stopped reaching out to new prospective members (a marketing issue), or that the organization delivers on the problem in a way that is no longer optimal (a product issue). This point applies to more than just religious institutions. Any membership organization with a graying population, such as news organizations, professional associations, or popular entertainment franchises, can find itself a victim of its own success and longevity.

If you’re a leader of a congregation struggling to attract new members, there are options. Target people who’ve already tried a digital-only religious community but didn’t find it satisfying. There’s an opportunity to win them back to a more intimate experience. For example, if your prospective parishioners are going online and realizing that there’s no substitute for a live, human connection, you could try something like this: “If you want more than inspiring speeches over your EarPods, join us for live connections with your neighbors every week.” Or: “Meditation is good, but meditation with a strong spiritual framework is better.”

Another option is to evolve the services your organization provides. If your prospective members use digital tools to research local houses of worship and don’t choose you, or if prospects seem to prefer a digital-only solution, you might need to make major changes. The needs of prospective members evolve, and better ways of delivering value emerge too. Of course, this is true of businesses as well—members’ needs are always evolving, as are the tools to provide and package benefits that meet those needs.

Don’t Forget Tomorrow’s Members

Remember, part of the beauty of a forever promise is that once customers are committed, they stop behaving like a buyer and start acting like a member, no longer evaluating other options. Even if existing customers say they’re happy, it may be inertia talking. Meanwhile, the options available to uncommitted prospects continue to expand.

Prospects might be treated like outsiders when they do join, and therefore not feel welcomed. One professional association’s entire governance board was comprised of people over 50 (white men, actually) concerned with issues of succession planning and retirement. New members of the profession were paying off student loans and seeking the right next job. Guess which topic was programmed for the annual meeting.

This is a challenging dilemma. “New members have different needs than long-term members who comprise governing boards,” says Robert Skrob, an expert on association subscription memberships and the author of Retention Point.2 “New members need tactical benefits to launch their careers, while long-timers want networking, advocacy and leadership opportunities.” Remember how shocked the tennis establishment was by players who chose not to wear tennis whites, or dared to wear a catsuit? The problem with many memberships is that they are cliquey and resistant to change. Make sure your front door stays welcoming.

Refreshing Your Offering While Staying True to Your Mission—the HFMA Story

The Healthcare Financial Management Association (HFMA) is an instructive example of member-centricity, and of an organization willing to undergo a two-and-a-half-year journey to fully reinvent itself. With a focus on helping hospital CFOs “lead, learn, and connect” (the core pillars of the organization), the association generated 2018 revenues of nearly $26 million, has about 38,000 official members, and has been around for more than 70 years.3

Like many organizations that have enjoyed longstanding success, HFMA had developed a sizeable portfolio with dozens of products to support its core values—training courses, conferences, e-books, webinars, certifications, an online community, and so on. The organization’s structure corresponded to its product and service lines—membership, education, publications, research, and other departments—not around its promise of helping members learn, lead, and connect. When Garth Jordan joined HFMA in May of 2016 as Chief Strategy Officer,4 the organization was buckling under the sheer weight of its massive product lines and members were feeling nickel-and-dimed, a natural but negative outcome of product proliferation. Subsequently, Jordan conducted a rigorous and inclusive design thinking exercise, which required staff and the governing board directors to shadow or interview members. By August of 2017, Jordan had gathered enough qualitative member data to create key insights about the value HFMA members were really needing from the association. These four key insights informed everything they did going forward:

1.   Offer easy and open access to relevant information.

2.   Collaborate across boundaries to influence change around them.

3.   Navigate the pace and complexity of the change around them, and to be “the smartest person in the room” about the impact of changes to their businesses.

4.   Develop their staff.

With these insights at the forefront, Jordan realized the product-line business model was not serving the value members required. As such, he started sketching design concepts to recommend a member-first overhaul of the entire organization. Soon after, he had a mindset meeting with the board to make sure that the board supported his exploration of an entirely new business model and solidify support and understanding before embarking.

In April 2017, he returned with a prototype business model, digitally transformed in website form, and roughly mapped out using the Wix.com “free website” app. His core thesis was that members wanted to access and play in the sandbox of learn, lead, and connect zones for one price, and the programming HFMA would offer had to align with those goals rather than with the internal structure of various product and service lines.

While the initial model was slightly different from what the team ultimately launched in June 2019, it was enough to get the board’s support to go beyond the prototype and to invest resources that allowed the team to do even more design thinking as well as standard research. Ultimately, they digitally transformed the entire business. With that, HFMA members have an open, all-inclusive personalized access to their experience—including all publications, online learning, certifications, and communities. Just like a Netflix experience! There’s even a new, strong online community.

The implementation required three simultaneous workstreams. One team worked to refine the business model; another worked on integrating three new technology platforms—association, content, and learning management systems (AMS, CMS, and LMS) into a single system. And the third developed a new, purpose-driven internal organizational structure, organized not around product lines, but about delivering on the four insights with an emphasis on purpose rather than products.

None of this has been easy, but the organization has been happy with its major effort to refocus on its forever promise. Even minor changes have had a major impact on the bottom line—like the recognition that many CFO members wanted their teams to have access to learning. By offering organizational memberships, the team generated $3 million in incremental revenue in the second full year.

Jordan attributes HFMA’s success to unqualified support from the CEO and the board, a process that included thousands of hours from longtime members and dozens of staff members, and a big dose of empathy for their ultimate customer.

What to Do to Stay Fresh

You can remedy or altogether avoid these issues by following a few simple guidelines:

1.   Ensure that new customer acquisitions outnumber those that leave (acquisition is greater than churn). If you’re no longer growing in terms of number of customers, your relevance is shrinking. This is true even if your retention and engagement numbers are high for your existing cohort of members.

2.   Invest in onboarding your new members—help them get the most value out of what they’re paying for.

3.   Look beyond today’s happy customers for your “voice of the customer” initiatives. Loyal fans provide the melody, but you need to harmonize with the voices of ex-customers, prospective customers, and prospects that got away.

4.   Revisit the mission that launched your business and ask yourself if you’d still execute in the same way. If your goal was transportation, you probably wouldn’t use horses anymore, right?

Many organizations have done this well for decades. Universities are often faulted for not catering to the wishes of current students. In fact, they are thinking about changes to align with today’s goals and tomorrow’s as well. Weight Watchers has redefined its core weight loss program multiple times since its founding in 1963. Many gyms offer new classes constantly, swapping out aerobics and Jazzercise for Zumba and TRX.

When you’re exclusively focused on longtime members, you may miss the long-term benefits of forever. Growing old with customers might seem natural, but you also must continue to attract and engage with new members. Just because current members aren’t looking for alternatives doesn’t mean future ones won’t, or that the work is done. Bridge the past and future by building a mechanism to hear the concerns of tomorrow’s members.

What to Do Next

    Do a quick diagnostic on where your biggest funnel issue is: awareness, acquisition, engagement, or retention. You can look at trends over time. For example, is acquisition declining even as engagement of existing members is strong? Or is acquisition great but churn is on the rise?

    What’s the average age of your member? Is that age trending up with your organization? If so, you may have an issue.

    Make sure that any “voice of the customer” activities you have consider the voice of lapsed customers and prospects who didn’t join. You need multiple voices.

    Take a step back and look at your forever promise with fresh eyes. If you were launching today, and your goal was to deliver on that promise, what kind of a solution would you build?