Alumni organizations can't afford to become complacent when it comes to alumni engagement. Is your organization falling to some of these bad habits?
About a 4 minute read
Some bad habits are more troublesome than others. In my role as a consultant for many types of membership and constituent groups, I’m learning of a few bad habits that are increasingly common, and are negatively affecting engagement.
While this isn’t a comprehensive list, here are three bad habits worth mentioning:
Bad habit #1: Ignoring Alumni Churn
Your churn or opt-out rate measures the number of alums that ask to be put on the “do not mail” “do not contact” or “do not solicit” list during a given time period. Some call it attrition; others call it turnover or defection. Regardless of the name, it’s the opposite of loyalty and engagement, and you can’t effectively grow your program without knowing if your alumni loyalty is waning or not.
The recent VAESE alumni relations benchmarking study revealed that the average opt-out or churn rate for alumni organizations is 8.1%. Churn rates vary by industry. Verizon reports a churn rate of .84%. U.S. credit card companies average about 20%, and U.S. newspapers reported an average churn rate of 58% several years ago. (For obvious reasons, most companies are quite guarded about revealing their churn rates.)
The VAESE study also revealed that one in three alumni organizations don’t know or don’t track their alumni opt-out rates.
I’m baffled by that statistic. Mostly because I think that number is under-reported. My gut tells me that many more institutions don’t pay attention to their churn rate.
If your organization is one of those that ignore or neglect your opt-out trends, you’re wasting a lot of time, effort and resources.
How, you ask?
All churn is expensive, but it’s especially so when those that opt-out have previously engaged, joined or given. In any business endeavor, it’s much cheaper to keep a customer/donor/member, than to acquire one. Many businesses spend as much as 80% of their budgets to acquire new customers/donors/members. Lowering your opt-out rate by just 1% could represent a significant amount of revenue. This study found that increasing retention by just 5% can boost profits 25-95%.
If you don’t know if your alumni opt-out rates are trending up or down, you may be doing long-term harm to your alumni relationships without ever knowing. If you're among the 33% of institutions that don’t know or don’t track opt-out rates, it’s it's time to invest some resources to figure it out.
Bad habit #2: Ignoring the Need to Offer Alumni Benefits
Your alumni organization no longer has the luxury of expecting life-long loyalty simply because alumni attended your institution. Offering alumni benefits is not limited to just dues-paying organizations. If you want to engage your alumni, you must first offer them meaningful benefits with real value. Value has the power to attract. Value is the first step to engagement.
In business-speak, in the absence of value, price becomes an issue. In other words, if you want your alumni to become resistant to the costs associated with engagement, (whether it's giving to the annual fund, or joining the alumni association, etc), simply neglect or ignore your value proposition.
The VAESE study revealed that 62% of alumni organizations are “not focused on offering alumni any significant benefits,” or instead “appeal to the philanthropic generosity or loyalty of alumni/ae to (get them to) engage, join, or give.” Those stats are also quite baffling to me.
The value of the benefits you offer is a key deciding factor for many alumni who are considering whether or not to engage. That’s because alumni have been conditioned to demand value…not only from their alma mater, but from any other organization or business they choose to engage with.
The competition for your alumni’s attention and loyalty is increasing. Consumers have memberships in an average of 29 loyalty programs. You’re fooling yourself if you think your organization is not in competition with airlines, supermarkets, and retail loyalty programs.
Your alumni organization may suffer if you don't deliver real value to your alums. And the value you offer must align with the actual needs (not just perceived needs) of your alumni.
Many struggling organizations ignore the alumni /benefit alignment, and rush straight to soliciting their alumni before their benefits are fully developed. Successful organizations have thought long and hard about their benefits, and are focused on relevance, and immediate value.
When the value of affiliation far outweighs the expense, alumni become far less sensitive to the costs of joining or giving, and their rates of engagement increase. Likewise, when alumni question the value of their relationship with their alma mater, increasing opt-out rates are sure to follow.
Bad habit #3: Clinging to Stale Alumni Benefits
In contrast to Bad Habit #2, some organizations alternatively offer an exhaustive list of benefits, concluding that a long list benefits has more value than a focused set of powerfully engaging benefits. It is possible to have too much of a good thing, especially when you ignore whether or not each benefit is popular, adds real value, or is cost effective to maintain.
This article reveals important research into member benefits. It was discovered that 70%-80% of constituents cared about only a handful of member benefits. Researcher Dean West conducted a number of studies for various types of organizations and concluded: “Rarely do we identify more than four or five key benefits that influence the decision (to join or engage). The result is a lot of wasted effort on benefits that don’t improve member value or corresponding membership business metrics.”
Study and prioritize your alumni benefits annually, and identify those that have the greatest impact on engagement. Know which benefits need to be enhanced or eliminated. The best benefits are those that deliver ongoing value, are frequently relevant to your alumni, and generate good will.