Commodification of membership

Some charitable membership organisations increasingly treat membership as a commodity or product to be bought, not a value-based contribution to be given, and their marketing emphasises tangible benefits over ‘softer’ intangible benefits for members. The two approaches may also be combined in a "free economy" model.

What are the implications?

For membership organisations in general

  • To increase revenue and provide a better experience for members, Voluntary and Community Organisations (VCOs) have adapted commercial practices, segmenting their members and offering different tiers of personalised membership benefits. In many cases, this means that membership organisations have become more efficient and recruitment has expanded.
  • At the same time, business is borrowing ideas from social and charitable organisations, making it harder to distinguish between commercial and charitable offerings, as companies use terms like ‘joining’ and ‘belonging’ and describe discount schemes or subscriptions as ‘memberships’.

For recruitment and retention of members

  • As membership marketing becomes more centred around tangible benefits such as free gifts or reduced prices on publications, membership becomes more like a transactional relationship than a charitable gift with benefits.
  • While tangible benefits are attractive to new members, and often have a long-term use (such as a magazine detailing an organisation’s work), they are likely to be less effective in retaining members. 
  • Stressing tangible benefits and moving to a customer relationship approach risk detracting from, or undervaluing, the ‘real’ values of membership.
  • Similarly, it may be that failing to stress intangible benefits – such as the work you are able to do as a result of the membership fee, or the feeling of belonging to a movement – may backfire in retaining members as they forget why they joined in the first place.

For administration

  • As membership has become a more business-like sector in general (in particular for larger organisations), members increasingly expect and demand a professional, business-like service (such as renewing membership at any time, online or on the phone).
  • As Customer Relationship Management (CRM) software gets cheaper, and open source platforms become available, smaller organisations can also access the technologies that allow them to be efficient and apparently member focussed in their operations. 
  • However, maintaining the levels of staff and technology needed to cater to larger, shorter term and more demanding memberships (see attitudes to participation) is expensive and time consuming, and the associated costs might be perceived as being at odds with ‘charity’.

For legitimacy

  • With a constrained public spending affecting VCOs that deliver public services, income from membership will become even more important. Having many members also helps to influence policy makers and demonstrate effectiveness to trustees and funders.
  • But the degree to which those members are active may increasingly be seen as a test of an organisation’s legitimacy. And with sophisticated private sector ‘membership’ such as loyalty cards benefitting popular causes, charities will need to clearly differentiate their ability to bring people together while achieving more ambitious social benefits.

Moving forward

  • How could better knowledge of your members from systems like CRM enable you to retain or grow your membership? Are there tools that can easily help you deliver a more personalised and effective service?
  • Can your organisation emphasise its values and the difference it makes to set itself apart from non-charitable organisations that also offer membership?
  • Does your organisation need to undertake a strategic decision about the direction of membership? Perhaps you should weigh up the potential costs (in terms of increased staff time or investment in technologies) and benefits (an increase in income from members or the size of your membership)?
  • Do you need to remind members why they joined in the first place rather than trying to encourage them to join or stay with free gifts?
  • In five years’ time will you need to stress communal rather than financial benefits of membership in order to attract and keep members?
  • Is there an opportunity to use a "freemium" model to widen membership while maintaining income with premium products or services?
Last updated at 16:16 Thu 17/Feb/11.

Recent comments

AuthorComment

There was an interesting point made at the Big Society Evidence seminar on Monday that I overheard via @karlwilding on twitter that "collecting membership subscriptions by direct debit instead of face to face changes the relationship with members"

It is a reflection of technological change, and not necessarily a bad thing, but there is a big difference between a centralised membership factory with a CRM database, automatic thank you letters and millions of members.

I'm extracting some stats on associational membership since 1991 for NCVO's forthcoming Participation Almanac. I expect that the numbers will show a decline in membership of traditional organisations, but this driver suggests that we will perhaps not be measuring participation but consumption.

Katherine's picture

Katherine

Specialist Editor

Really interesting point Pete.

It points to one of the big elephants in the room when we talk about membership as participation - often we want to measure how much members engage or participate. Since engagement is hard to measure, we use something simpler - consumption. It's a real risk, particularly when we are looking at this from a policy perspective which understands membership as a short-cut to health wealth and happiness (aka high social capital levels on many measures)...

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