Psychographics Drive Join and Renewal Rates

Understanding Your Customer.gif
Most likely, you’re tracking demographics about your members. If you’re not using psychographics, you really don’t know why members join and why they stay or not. Knowing more about the “why” than the “what” could also help you attract new members and increase revenue.

Most associations collect basic information from prospects when they fill out the application. Aside from the basic “fields” like Company Name, Primary Contact Name, Company address, etc., the application may ask for the contact’s Position, Number of Full-Time Employees (FTE), Industry or NAISC code, Number of Offices/Locations, and other requested information. This information is then uploaded into the Association Management System (AMS) and used to set up the member account, list the member in the Directory, and for other internal functions.

The majority of the information collected from new members are geographic and demographic. If the new member is also asked to indicate the reason for joining, then a psychographic variable is also collected. In other words, geographic data explains where your member is; demographics explain who your member is, and psychographics explains what’s important to them.”

When I teach the Marketing Strategies course for the Institute of Organization Management (IOM), I have students work in small groups to develop a mini marketing plan for a specific program (e.g., Leadership, Young Professionals). One of the activities is to create 2-3 Target Profiles that include demographics and psychographics. Once the Target Profiles are developed, the groups create Targeted Messages that resonate with different audiences to sell the program. A “one size fits all” marketing strategy doesn’t result in high email open rates or registrations.

Even after teaching this course for more than 10 years, I find that association professionals struggle with profiling members. Identifying demographics is easier if the information has been collected or is readily available, but knowing what certain members value and why is a real puzzler. Is it because we don’t really understand our customers or target markets, or are we lacking the data that would provide the business intelligence that other industries rely on for marketing and retention?

Demographics Give Us Much of the “What”

It’s easy to buy lists that contain demographic information such as age, gender, ethnicity, income, geographic location, as well as other types of information about who customers are, where they live, and what they do. This type of information can be found through a variety of sources like the American Fact Finder that is offered through the Census Bureau. for example. You can learn a lot about your members/prospects, and even your neighbors, just by entering a zip code in a Nielsen PRIZM. (I found it interesting to learn that I live in a neighborhood where most residents do not have kids living at home!)

You can glean similar insights from analyzing business demographics. The Census Bureau conducts a business census every five years and the last one was conducted in 2012. Reviewing the Census Bureau Economic Consensus, you can learn how many businesses are in your area by industry, number of employees, etc. This is a great way to compare the Census with your membership base to see how representative it is to the market. Keep in mind that the Census collects this information based on tax records and may not include home-based businesses that are “under the radar.”

Although demographic data like the Census will help you know more about the types of businesses in the area, it will not tell you what influences business leaders in their buying decisions.

The Secret of Engagement Lies in the “Why”

Psychographics can tell you much more about your members and help you to market to prospects that have things in common. Psychographic data used to market to consumers may include information on what type of music do they like, what other brands they buy, how much they spend on entertainment, and where they hang out. Businesses can use services like Nielsen’s PRIZM, which provides psychographic data by zip code, to better understand target groups of customers.

For associations, psychographics are more about why prospects join and renew each year; which benefits they access or what committees they serve on; why they volunteer; and which links they click on in newsletters. Psychographics help us to understand what people value and what influences their decisions.

Member Profile Matrix—the Framework
The Member Profile Matrix describes four different types of members, why they join, and what they value. There are no demographic variables stated, although the two types on the bottom are usually small businesses and the two on the top are typically corporate entities.

To understand their customers better, association professionals need to leverage both demographic and psychographic information. The more we understand not just “who” our customers are, but “why” they do what they do, and what really matters to them, the better we can serve them. Here are some ways to employ both sets of data:

  • Collect feedback through surveys, filter results by key fields, and use cross tabs for insights.
  • Ask members why they engage in specific benefits and activities, and track data in your AMS.
  • For each program offered, create target profiles that include demographics and psychographics. Understand who the program is intended for and why to market it effectively.
  • Observe the behaviors of members—watch what they do and say—actions are more revealing than surveys.

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.