Astute Planning, Flawless Execution,
Delighted Customers

Issue #117

Tuesday, September 25, 2007

We are taking a break from our newsletter series Growth by Acquisition to bring you the below article about managing customers of non-profit or membership-based organizations. We will continue with the series in our next newsletter edition with an article about establishing key assumptions and planning parameters for an acquisition/integration.

Creating Member Loyalty
By Craig Bailey

Over the last several years, we have worked with a number of firms that are in, or serving, the nonprofit / membership-based sector. From these opportunities, we have gleaned observations that we feel are worthy of sharing with others who may benefit from our learnings.

Our perspective on this topic will be presented in the following segments:

  • Difficulty considering Members as Customers
  • The reality of the situation
  • What to do?

Difficulty considering Members as Customers

Too frequently, nonprofit / membership-based organizations have a difficult time considering Members as Customers. Often, members are looked upon (by employees of the firm) as "privileged" to be associated with the firm. Taking a step further, we have even seen the situation where the employees of the organization consider its members as colleagues who can "put up with" minor (even major) infractions in their performance and relationship.

A key contributing factor to holding this perspective is the fact that nonprofit / membership-based organizations prefer not to use terms common in the "for-profit" sector, such as sales, marketing, revenue, etc. While the organization may be avoiding such terms (including "customer") to distinguish itself and the noble cause for which it stands, it is still a business. In order for the business to survive and thrive, its income must equal or exceed its outgo. Otherwise the organization will cease to exist. And, it is the member/customer that provides the income.

The reality of the situation

Nonprofit / membership-based organizations are in a highly competitive marketplace. Said another way, each person can only devote so much time, money, and energy to "memberships." These people will make choices on which memberships to "invest in" based upon the value received and how easy it is to do business with the firm.

Similar to commercial organizations, nonprofit / membership-based firms experience churn. That is, members/customers leaving the firm at a rate that is disturbing considering the investment the firm must make to acquire the members.

What to do?

The short answer to the question "what to do?" is to simply change the mindset of every person in the organization to look upon its members as customers. As a foundational step, this will "begin" to create a shift in perspective.

From there, it is recommended that the organization apply best practices from the commercial / for-profit sector. In a nutshell, there are 3 major steps to take:

  1. Know your customer
  2. Align your resources with a focus on the customer
  3. Listen and respond to the needs of the customer

Our whitepaper Embarking on the Journey to Customer Centricity provides more detail in each of these areas.

If you'd like to discuss approaches and techniques to improving customer loyalty, feel free to give us a call. We offer a no-nonsense customer experience assessment that is performed in "short order" resulting in a read-out sharing:

  • What the firm is doing well and should build upon
  • Opportunities for improvement
  • A pragmatic road-map clearly outlining what you can do to close the gap between where your firm is and where it needs to be to achieve exceptional levels of customer loyalty

In closing, simple advice that we'd offer any firm is to expand the meaning of customer. A "customer" is anyone who contacts your firm, to whom you owe a response. Said another way, it is not just the person who is presently "paying" for goods and services that you must treat exceptionally well; rather it is ANYONE who may become a paying customer or influence someone else to become (or not become) a paying customer.

Contents

+ Creating Member Loyalty
 


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We strengthen overall company performance through better service delivery and management.

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In short, we align the resources of your organization to exceed your customers' expectations in the most effective and efficient manner possible.

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