The other day there was a discussion among chamber of commerce professionals in a Facebook group I belong to. The question was:
Is Groupon a Solution for Member Recruitment?
First, this is not a slam against Groupon (Living Social, Amazon Local, or whatever the latest discounter is out there).
Secondly, I realize this would be difficult for most associations to do anyway, because of the niche markets some of them serve. However, it is conceivable that some association could explore running a Groupon in a connected area rich with potential members.
But Groupon is not a solution for member organizations for two reasons.
The Groupon Effect
Groupon has made it very affordable for me to visit several local attractions. Every time I have the urge to visit one, I search Groupon.
If there’s a discount, I buy.
If there’s not, I wait.
I have been conditioned, because of the attraction’s frequent usage of discounts, to wait. You don’t want to condition your members, or future members, to wait for the discount.
What is Membership Worth?
The second problem with discounting membership, is that you devalue your offerings. Associations work very hard to show members value. If you discount right off the top, you are undercutting what you are worth in your members’ eyes. What members see is that you must have a large mark-up on membership to be able to discount it so aggressively. Don’t give them reason to ask what is this membership really worth?
Plus by their renewal time next year, you’re not only going to have to prove membership was valuable but that you are worth twice as much (because there won’t be a discount). That’s a lot to accomplish in 365 days.
If you announced today to your current, loyal members that you were increasing dues next year to double what they are currently paying, how many of them would stay? If your loyal, long-time members would leave when you double their dues, what would a relative newbie do?
A Better Solution
If you want to shake things up, and cast a wider net for potential members, offering a freemium web-only membership is a much better option for several reasons:
- There’s less overhead and cost on setting up a limited free membership than discounting a full one.
- You can create a velvet rope campaign that would entice freemium members to upgrade (software companies do this beautifully).
- You don’t have to justify doubling your value in a year to cover the increase in member dues. A freemium membership will always be free and limited and a full-membership will always cost a member what it’s worth.
What do you think about deeply discounting membership? Is there ever a reason to do it? Maybe I’m wrong. You tell me.