Chapter 1: A Complete Guide to Membership Organizations

[fs-toc-omit] Chapter 1: Membership Organizations - How To Create a Successful Membership Business Model

Do you want to create a community of like-minded individuals, advocate for a philanthropic cause, or secure recurring monthly revenue? Look no further than a membership business model! A membership organization is ideal for those who wish to provide a service in exchange for reliable income and those who would prefer to provide partnerships to drive community engagement.

However, like any small business, those searching for how to create a membership program must begin with the basics — like the structure of a membership business model and the role one can play in the local community. In this comprehensive guide to membership organizations, you will discover everything you need to know about a member-based model in three simple chapters.

Continue reading to familiarize yourself with various membership types and use cases, from donation-based advocacy groups to subscription-based art societies.

Once you review the six steps to starting your own membership organization, head to Chapter 2 to reveal the top membership management best practices and the best-kept secrets for ultimate membership engagement.

Let's get started!

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What Are Membership Organizations?

A membership organization is any professional association or business that allows individuals to subscribe to its entity in exchange for access to a dedicated community or specific services. The purpose of a membership organization is to gather like-minded individuals to engage with or further interest in a shared activity, industry, profession, or mission.

Alongside the ability to share specific interests with others, a membership business model has several additional benefits. The primary benefit of launching a membership organization is access to a stable source of revenue. A paid membership model with recurring dues enables membership organizations to anticipate steady income month over month and easily forecast cash flow.

Aside from financial incentives, opening a membership organization also creates unrivaled insight into the wants and needs of your peers. Members with a strong interest in your mission are typically open to providing helpful feedback on your operations. By understanding what matters most to your members, you can offer services and collaborative efforts that enhance the local community.

Use Cases for Membership Organizations

When it comes to membership communities, the opportunities are truly endless. From professional associations and art societies to economic development groups, there's room in the market for just about every activity, industry, and mission across the country. Take a look at a few of the most popular use cases for membership business models to decide which appeals most to you.

Professional Associations

As one of the most plentiful membership communities worldwide, a professional association offers members pertinent resources and networking opportunities that focus on a specific industry or career path. For instance, the Academy of Criminal Justice Sciences (ACJS) is an industry-focused professional organization, whereas the National Society of Accountants is a career-based group.

The primary role of a professional association is to aid in professional development through in-person conferences, online resources, and continued learning opportunities. When concerns arise, professional associations can also work alongside board members and industry lawmakers to advocate for policy changes to an organization's bylaws, leadership updates, and stronger employee protections.

Clubs and Social Groups

Membership clubs and social groups are also great for those looking to become further involved in a fascination for specific hobbies or activities. Book clubs, photography clubs, gardening clubs, hiking groups, and other sports and fitness groups are just a fraction of the many clubs and societies that follow a membership model to help support long-term participation and organizational growth.

A membership organization that falls under this category typically strives for member engagement through routine discussions, in-person meetings, and planned events related to a specific hobby or activity. Such gatherings provide club and social group members with ample opportunities to connect with like-minded peers who partake in similar hobbies, share relevant resources and knowledge, and participate in group activities that connect with the club's overarching interest.

Nonprofits and Advocacy Groups

Nonprofit and advocacy groups are ideal for membership models emphasizing the greater good. From human rights public charities to environmental conservation and animal welfare organizations, there are tons of membership opportunities throughout the nonprofit world that enable community members to increase involvement in and raise awareness for specific causes.

Across these many organizations, members are presented with opportunities to participate in volunteer and fundraising events that can impact the local community. Likewise, many nonprofit and advocacy groups will also supply members with outreach materials and educational resources to help promote the cause and inform non-members of the group's philanthropic efforts.

Art Societies and Galleries

To encourage up-and-coming artists and promote the local creative community, art societies, and art galleries are other types of associations that frequently operate on a membership model. A membership-based organization centered around the arts community can connect local creatives with other art lovers and generate a central location to share interests and skills.

For instance, art society and gallery memberships are ideal for connecting group members to local art events and venues where they can display and discuss their artistry with the community. Many membership art associations also provide recurring members-only instructional events and materials to help creatives enhance their existing skill set and network with potential partners.

Chamber of Commerce and Economic Development Groups

Economic development and Chamber of Commerce groups are an impactful variety of membership organizations that adhere to the mission of assisting and promoting regional businesses. These groups work to advocate for local businesses and corporations and conduct lobbying work amongst local leaders and trade associations to support long-term local economic strength and scalability.

As with most membership-based organizations, economic development group members can also benefit from the group's resources and networking opportunities. Connections made by being part of these various associations can further assist in efforts to better connect with local businesses to understand their specific needs and concerns and drive higher economic growth.

On the topic of local businesses, the above five membership organization use cases are just a portion of the limitless types of membership groups. Several small businesses not mentioned here are congruent with a membership-based business model, including museums, theater groups, exercise facilities, and coworking spaces. Select a use case that resonates with you and your local community.

Types of Membership Structures

In addition to the many use cases for a membership organization, a membership business model has several types of membership structures. A membership structure refers to how an organization requires its members to join, from providing mandatory contact details like a phone number and email address upon sign-up to paying a recurring monthly payment for membership.

Take a look at the most common types of membership structures for a membership organization.

Free Membership

As the name might suggest, free membership refers to an unpaid membership structure. In a free membership, members may be required to input various details, like an email address, phone number, and full name, to get started. These details are often used to send members promotional marketing materials, inform them of upcoming events, and share relevant resources.

A free membership is typically offered to attract new members and build a community. Free members often have limited access to the features or benefits of the community but can upgrade to a paid membership for access to more. Free membership structures are ideal for associations with budget-conscious members, particularly student organizations or hobby-focused social groups.

One-Time Fee Membership

A one-time fee membership refers to an organizational structure in which members are required to pay an initial fee to access certain benefits or features. A step above a free membership structure, a one-time fee membership structure should only offer the basics of your membership perks, such as an event calendar for social groups or an employer directory for professional associations.

By restricting access to some of your more exciting or niche offerings, you encourage members to opt for a more expensive paid membership. However, if you opt for a one-time fee membership, it's essential also to offer a secondary structure for users to unlock full membership access. A membership program with multiple structures is known as a tiered membership.

Tiered Membership

A tiered membership structure refers to an organization with multiple participation levels, each with its own benefits, features, and costs. For example, a basic membership — like a one-time fee membership — might include limited access to community content. In contrast, a premium membership might include additional benefits such as discounted event tickets.

If you decide to structure your membership organization in tiers, you'll need to calculate how many membership tiers your group should offer. Most membership organizations opt for a minimum of three tiers: one that may be free or heavily discounted with restricted community access, one at a base price with basic community access, and one at a higher price with exclusive features.

Subscription-Based Membership

A subscription-based membership structure refers to an organization that requires members to pay a recurring fee to access membership benefits and features. Recurring billing for subscriptions often occurs on a monthly, quarterly, or annual basis. Some subscription-based membership organizations also offer a time-restricted free trial for new members to explore its features.

A subscription-based membership structure is mainly used by organizations that offer ongoing services. For instance, a professional association that publishes online content each month may charge a monthly subscription to access new posts. Similarly, a sports club may choose a subscription-based membership to fund continuous access to the community fitness center.

Donation-Based Membership

A donation-based membership organization refers to a membership business model that provides members with the choice to donate funds but does not require payment to become a member. Nonprofit organizations, advocacy groups, and similar organizations that depend on the support of members and volunteers to function most frequently employ this sort of membership structure.

A donation-based membership structure is best suited for organizations with limited overhead costs, like operating expenses, employee payroll, or office supplies. Instead, a donation-based membership model primarily benefits organizations that purely rely on the number of participants to drive community awareness and fund member initiatives.

Event-Based Membership

An event-based membership refers to a business model in which an individual or organization can become a group member by paying a one-time fee or creating a free account, thus gaining access to the group's resources, community, and other benefits. However, this type of membership structure will incur an additional charge for members to attend or participate in each of the group's events.

Event-based memberships are popular amongst professional associations. The secondary fees for an event-based membership often grant members access to conferences, workshops, and networking events. Membership organizations often charge attendance fees to recoup standard event expenses, like the cost of the venue, speakers, entertainment, and refreshments.

Subsidized Membership

A subsidized membership structure refers to an organization with variable membership costs proportionate to each member's income level. In other words, in a subsidized membership, an organization will base the amount of its monthly or quarterly dues on each individual member. It will subsidize or cover the membership costs of members who may have less income.

Also referred to as a concession membership, a subsidized membership structure allows budget-conscious or lower-income individuals — especially students and recent graduates — to join an organization for a low or even non-existent fee. Be sure to assess the average annual income in your operating location to decide how much you should charge members in your organization.

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Create a Membership Organization in 6 Simple Steps

With a thorough understanding of the variety of membership organizations and the numerous types of membership structures, you may be curious about how to create a membership program that fits your interests. Like any business, a membership organization requires an established plan of action to launch off the ground. Consider how to create a membership program with these six simple steps.

1. Define Your Mission and Target Audience

The initial and most pivotal step towards developing a well-rounded membership organization is first to define your mission and determine your target audience. Begin by identifying the purpose of your group — is it to earn money or to engage members? Do you want to help others achieve something in a specific industry, hobby, or profession through your membership model?

When determining the purpose of your membership community, consider the goals you'd like your organization to achieve and the benefits you wish to provide members. The mission of your membership organization can range from helping members better connect with a particular nonprofit cause or with like-minded hobbyists to aiding in business or professional development.

After you've solidified your membership's mission, it's time to nail down your organization's target audience with details such as shared activity or profession. Research your target audience's needs and interests, and tailor your program to appeal to them. By crafting your organization around your audience, you create a clear message that can attract the right members.

2. Determine the Value Proposition for Members

Once you've decided on a purpose for your membership organization and the target audience you wish to serve, you can determine your members' value proposition effectively. With the knowledge that members will provide valuable time, money, and collaborative effort toward maintaining your operations, what services or benefits will you provide in return?

The most practical way to decide on your value proposition is to consider which resources your target audience would deem meaningful. For instance, a professional organization may boast opportunities for training programs or member engagement with board members of robust trade associations to advance local professionals. On the other hand, an art society may provide value through discounts on products and exclusive event invites that members could not find elsewhere.

3. Create a Membership Structure and Benefits

By predetermining the value you plan to provide to incoming members, your organization will be better equipped to develop a membership structure that best fits everyone's needs. When determining the best membership structure for your program, first take into account the amount of revenue you'll need to not only cover the program costs but to generate profits as well continuously.

For instance, a social group with no overhead costs may utilize an event-based membership structure to only seek member payment before a conference or concert. In contrast, a sports club that operates from a fitness center may deploy a subscription-based membership to cover monthly rent, equipment, and other operational costs. No matter which structure you choose, it's crucial to balance costs with the value you provide so your program is equal parts affordable and profitable.

4. Develop an Onboarding and Retention Strategy

Now that your membership program has defined a mission, community, and value supported by a set structure, you're ready to develop an onboarding and retention strategy. An onboarding strategy is a collection of practices to welcome new members to your organization. In contrast, a retention strategy refers to an assortment of methods to help keep existing members interested. Retention strategies often focus on cultivating a positive membership experience that will keep your members involved and committed to your cause. We will share our best tips for providing an excellent membership experience in Chapter 3: Maximizing Your Membership Experience [Link to Chapter 3].

An onboarding and retention strategy for a membership community typically involves several communication channels, such as a welcome email sequence or SMS message, to familiarize new members with the group's features or services. Follow-up communications, like regular newsletters, enable members to become more involved with the organization and provide beneficial feedback.

5. Promote and Market Your Membership Organization

Once your membership organization has begun onboarding new members, you can move forward with promotional material to market your community to the general public. Begin by creating an online presence for your membership organization, first by building a membership website that describes your mission and unique value proposition to attract like-minded individuals.

Demonstrate expertise for your niche, highlight relevant qualifications by publishing routine blog posts, and support your online initiatives through a robust social media presence. Get the word out about your organization through these various online channels, taking the time to communicate your organization's differentiators through newsletters, videos, and testimonials.

6. Use Technology to Manage Members and Membership Benefits

When it comes to learning how to create a membership program, the final secret to success is harnessing the right tools for member and benefits management. Members are simply at the heart of every membership business model. With the proper practices in place to onboard, engage, and maintain each member in your membership organization, it's possible to grow a true community.

To help your community successfully scale, invest in a quality membership management system to streamline your administrative processes, automate repeated tasks, and ensure accurate tracking of membership data. Other management tools, like email marketing software and a secure payment gateway, help guarantee that your membership organization is both productive and profitable.

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Wrapping Up

There is limitless potential for membership organizations, from small businesses that provide services in exchange for reliable income to local associations that provide partnerships in favor of community engagement. And with tons of membership types — like free, one-time fee, and tiered memberships — there is significant viability of the membership business model in today's society.

Once you apply the above six steps to create your own membership organization, head to Chapter 2: Master Your Membership Management with These Expert Tips to maximize your community.