Join the Auto-Renewal Economy

Auto-renewals are part of my personal and professional life. That’s true for many of us. On a personal level, we subscribe to services like Netflix, cable, cell phone providers, wine clubs, fitness centers, vitamins, and insurance lines. Professionally, we pay for monthly services like software, cloud-based file storage, internet, and HR. Most of these services are deducted from our bank or credit card accounts monthly. No one asks us if we want to renew—they assume that we are receiving value and get paid automatically.

So, why aren’t more associations, including chambers of commerce, leveraging auto-billing or auto-renewals for memberships? Association staff members can spend up to 20% of their “marketing” time chasing renewals. When renewal letters or invoices are sent out, we’re asking our members to consider the value of membership again while staring at annual invoices. Should we alleviate members from having to make a renewal decision each year and let them tell us when they’re no longer receiving value?

It’s apparent that more and more organizations are agreeing with this quote in an Associations Now article, “Behavioral economists and marketers alike know opt-out is way better than opt-in.” By the end of 2013, about 25 percent of associations were offering members automatic renewals with credit cards or electronic bank drafts, and the trend is even growing with chambers of commerce. Many organizations like the National Association of Neonatal Nurses and the Chester County Chamber of Business & Industry offer automatic annual renewals with quarterly or monthly payment options.

If your leadership team decides to join the auto-renewal bandwagon, you can learn a lot from others who have gone before you and avoid many of the common pitfalls. Ask peers in your industry, trade or professional associations, or fellow IOMers about their experiences. Check out Frank Kenny’s blog post with compiled tips from chamber pros who have adopted auto-renewals and ongoing dialogs on his Chamber of Commerce Professionals page on Facebook. Learn about other association examples from Mary Byers, co-author of Race to Relevance and Road to Relevance, in a recent ASAE (American Society of Association Executives) article.

Yes, it will mean that you have to start having members use credit cards or electronic bank drafts to join and renew. Yes, you can decide to make the option available for renewals and not for the initial year. Yes, you can offer it as an option and not make it mandatory for all members.

If your team is still on the fence about joining this growing trend, realize that this concept isn’t exclusive to associations. In fact, membership models based on recurring payments is a big trend for-profit companies of all sizes, as noted by the author of the new book, The Membership Economy, who was the consultant who helped Netflix and SurveyMonkey develop their recurring revenue model.

Is your organization part of the auto-renewal economy?

Cathi Hight helps organizations build sustainable futures, improve processes, increase productivity, and develop staff & member loyalty. She is the author of The Member Retention Kit and A New Approach to Tiered Membership.