It’s time to prioritize membership programs.
It’s no secret: The cultural organization business model is struggling. Entities ranging from science centers to historic sites to art museums to performing arts entities are facing new challenges in engaging and retaining visitors while securing the monetary support required to thrive.
It is – and has been – time to rethink strategies so that they most align with the wants, expectations, and behaviors of the communities that cultural organizations aim to serve. Attendance is not keeping pace with population growth. The United States’ population is increasing (and growing more diverse along with it) – but interest in visiting cultural organizations isn’t. If yours is an organization dependent upon any earned or contributed revenue at all, then long-term solvency may depend on how well your organization is able to adapt to today’s rapidly changing world.
On this site, we’ve been sharing more and more findings about membership programs – from the top benefits members actually want, to member satisfaction, to the importance of membership retention for an organization’s bottom line. There are deeper dives to come! But before we share them, I want to share more about why we at IMPACTS are currently looking so closely at the concept of membership, and membership programs themselves.
There are three, critical situations facing cultural organizations that make prioritizing membership programs more important than ever before.
1) Expenses are outpacing revenues for the cultural, visitor-serving industry
The costs of running a cultural organization are escalating at a greater pace than the revenues these organizations are earning. IMPACTS tracked the operating expenses and earned revenues for 41 clients and their respective comparative set organizations. Between years 2010 and 2016, average per capita operating expenses increased 27.1% while per capita revenues increased by only 17.3%.
Higher industry costs + lower industry revenues = potentially big industry problems.
To address this issue, cultural entities benefit by examining funding models to maximize programs and opportunities for support. Membership, of course, is one of these foundational programs for many cultural organizations.
2) Cultural organizations are welcoming the same people, more often
With fewer and fewer people who profile as traditional visitors in the US, a primary goal of forward-facing cultural entities is to engage new audiences who can become regular, paying visitors and supporters.
Data suggest that cultural organizations on the whole are still not representatively engaging new audiences. As the population has grown in the United States, the percentage of unique visitors (first-time visitors) to cultural organizations has declined.
This is not cause to despair – it’s cause to adapt. Engaging new audiences and changing up the profile of the “type of person” who visits a cultural organization is a marathon, not a sprint. It takes time, prioritization, and effort – and the need to reach new audiences seems to be increasingly top of mind among leaders.
There’s a bright spot: Re-visitation. Cultural organizations are better than ever at motivating traditional visitors to attend.
The whole situation is illustrative of our industry’s overreliance on audience research (people who visit) and underutilization of market research (which includes the people who are interested in visiting, but don’t). But the benefit of audience research is clear: Understanding how to keep current audiences happy and coming back is a terrific benefit! If repeat visitation is growing then our opportunities for securing new members may be, too!
3) Becoming a member is the best way to support an organization
As regular readers know, one of the primary methods that IMPACTS uses to collect data is called “lexical analysis.” Instead of asking people to choose from a list of responses, the we ask open-ended queries, and advanced computers categorize the responses. There are many benefits to this approach. For instance, it helps avoid framing and cognitive biases, and it allows us to dive into the “why” of data-informed findings. (And with the NAAU Study now including over 124,000 people, it’s also efficient!)
We asked folks to name the top three things they can do to support an organization’s mission. Here are the answers.
Are you ready for a shock, cultural organization insiders?
Joining an organization by way of membership is the best thing that people in the US believe they can do to support an organization’s mission – even more than making a donation!
This finding in itself should be enough to encourage leaders to take a hard look at membership programs and prioritize support for them!
It’s also alarming news for organizations that heavily market transaction-based membership benefits such as retail discounts and member events instead of communicating (or even mentioning) the mission-based benefits of membership. That is a lost opportunity to cultivate support based upon a primary membership benefit. Not only that, members who join primarily to support an organization’s mission report higher visitor satisfaction!
Membership programs may matter more to the financial footing of cultural organizations than they ever have before. The time is ripe to pay special attention to them and strategically integrate these programs into broader goals and objectives. On the whole, effective membership programs may help lower (or help to alleviate) the expense-to-revenue ratio, maximize the opportunity to secure support from repeat visitors, and serve as an even more effective gateway to greater philanthropic giving.
Membership programs harness to power of the people who support our missions, and those who keep coming back again and again. This overlap represents a critical opportunity right now for the visitor-serving sector.
Members matter. And because of this, strategic membership programs matter.