Thursday, December 17, 2009

"Amazing Grace": How Sweet Thou Aren't

Free months of membership? Thanks! I'll take it!

I recently became aware that my membership in an organization of which I am member had expired over 3 months ago. I had no idea that my membership had expired because for some reason I never received notification and I also never stopped receiving benefits. The entire time that I was expired I continued to receive access to the member’s only sections of their website, copies of their print publication, members-only pricing on events I signed up for as well as being able to continue to serve in any volunteer roles which I was serving. My question to that organization is why? Why would any organization allow a member to continue to receive benefits after they are in effect no longer paying for access to these benefits as their membership term has expired?

When I ask associations why they “grace” members months of membership the answers I tend to hear are as follows:
1. This is the way it has always been done
2. Lots of our members end up coming back at some point any way so why would we shut them off
3. Our processes are not set up to get a renewal notice until real close to their expiration date so it would not be fair to shut them off at expiration.

To me, unless you can guarantee that 100% of the members that you give free months of membership end up coming back I see no legitimate reason to enact this practice. I feel this way for a few reasons as follows:

1. You are rewarding your members for renewing late in the hopes that they will come back. Reality is that they will not all come back so those folks that do not come back get a period of membership for free.
2. You are losing money because you are not getting dues for this free period yet you continue to pay to serve these soon-to-be lost members.
3. You are training your members to renew late and unless you maintain their original renewal date you will end up giving even current members months of membership for free.

I don’t understand why many associations are so hesitant to start the renewal process earlier and then shut off members who have not paid when they expire? To me losing access to the things you are no longer paying for is the definition of expire. Shutting folks off when they expire allows you to use it as the stick to make people renew on time. For example, what if the association I described above had locked me out of the members-only sections of the website the minute after I didn’t pay my dues when my membership expired. I use the website regularly so the next time I would have gone the website and tried to log in I would have realized my membership had expired and I would have renewed right then and there instead of waiting the 3 months after I had officially expired to renew my membership. I did renew eventually but a lot could have happened during the 90 days I was expired and still receiving benefits that could have led to my not renewing. Is this something that associations can risk? As a membership professional, I think not.



  1. Scott, These are all great points and I agree with all of them but here are a few thoughts/questions that came to mind while I read this and may play a "devil's advocate" role in starting a discussion.

    1. You renewed. So the value proposition at this org is pretty high for you (and likely others). Enough to volunteer and regularly use their website. hmmm. maybe this model works for their needs. What's their retention rate? If its working, why mess with it?

    2. Maybe renewal really isn't that important to them. If they are getting a high lifetime value and non-dues activity from their members regardless of whether they have an "active" status, maybe it's not a bad idea to provide them with a grace period. Maybe they have advertising on those members-only areas you are accessing and you purchase from their store regularly because of your activity in that area, should they shut you off then? Of course, it just makes me think they need to change their membership model to accommodate that dues to non-dues ratio. I still agree with your comments that they should be bringing in the dues revenue from you earlier too. That's just leaving cash on the table. Not smart business.

    3. Are they really losing money during that 90 day period? Does your renewed membership start from when you send in your dues or from the time you expired forward (retroactively)? If so, all of their months are covered and the grace period is erased. They basically are just loaning you the time unless you never renew and they cut you off.

    4. Annual/monthly auto-renewal may be something they should consider (or at least you). Then the renewal is almost invisible and neither party needs to think much about it.

    5. What if they have already figured out that you are a highly engaged member? If they know this from all of your activities, then don't you already offer them value in return (volunteering, actively participating online, purchasing, etc.) They really shouldn't need to be so concerned about you that much. They may be focusing their attention on those members that are more likely to lapse. I'm sure I'm giving them too much credit here. It's like that barber you always go to and you forgot your wallet one time. He isn't going to tell you to get back in your car and go get your wallet. if he wants to keep your business he'll cut your hair and trust your loyalty and "put it on your tab". Smart move IMO.

    6. I'd love to be able to have some of these problems :)

    -Dan Ratner

  2. Dan,

    Great points. I remember debating this with Scott at an Idea Swap a while back. I think the answer lies somewhere in the middle. Each "membership" is different, and you have to know yours and do what works for them. I lean toward no grace period, but I lean farther to an active retention sales process so that you minimize the need for it.