When was the last time that you walked into a Blockbuster to check out the new releases? At the turn of the century, Blockbuster was a multi-billion-dollar business that had cornered the video market. At the same time, little-known Netflix was carving out a niche in the home-delivery space. Less than 20 years later, which will you be using while you settle down this evening?
The intersecting paths between the two companies is used to illustrate trending consumer demands and the need to stay ahead of the curve in “Adapting Your Membership Models with the Evolution of Technology,” a new report by YourMembership. The report notes that Blockbuster took six years to match Netflix’s delivery model and by then it was too late. Netflix had already moved onto the next innovation — streaming service — and Blockbuster declared for bankruptcy a few years later.
The members of your organization are the same consumers that chose Netflix instead of Blockbuster and so there are takeaways to consider, according to report’s authors. Consumer preferences to consider include the desire to consume information via a preferred method or device, tiered pricing, and the ability to customize experiences.
Paperless billing is one area — commonplace for most consumers’ bill and service payments — where associations lag behind. Many associations still rely on physical invoices and communicate with members via mail. A 2016 survey of leaders at 2,000 associations showed that just 40 percent of membership payments are processed online, according to the report. Membership organizations might look to for-profits such as Netflix and Amazon for models on how to more closely align with trending online consumer preferences. Adjustments to actual membership models detailed in the report include:
* Subscription. The subscription format is adaptable to evolving technologies and works by having you deliver your regular content — magazine, journal, etc. — in a digital format for a monthly online payment that can be renewed automatically. Other facets that might be included are social-community applications and e-learning opportunities such as webinars;
* Freemium. This model gives members a chance to try before they buy by offering a free month of membership, similar to what is offered by companies like Netflix and Hulu. Freemium gives prospective members a taste of your organization and the value of membership with the hope of monthly renewal;
* Hybrid. Hybrid membership combines both individual and company membership and provides the benefit of giving members choices all while expanding your organization’s potential audience. The American Society of Association Executives (ASAE) is one example of an organization that has adopted this kind of model; and,
* Premium. The “Cadillac” of options, premium subscriptions provide members access to all organizational content, webinars, events, and courses into one higher, baked-in cost.
The authors compared membership organizations with turn-of-the-century Blockbuster in the need to adapt to evolving consumer preferences. Adapting can help attract and retain members and appeal to younger generations. For organizations unprepared to make wholesale changes to membership models, preliminary steps such as asking younger staff how they tap into professional societies, conducting surveys and focus groups with membership, connecting with other association professionals who have successfully implemented changes, and beginning a strategic planning process are all positive steps.
As we celebrate our 36th year, NPT remains dedicated to supplying breaking news, in-depth reporting, and special issue coverage to help nonprofit executives run their organizations more effectively.