Is Auto-Renewal Membership a Good Option For You?

The initial cost of joining an association can seem like a formidable outlay of funds for many prospects.

• Younger or early career professionals whose dues aren’t subsidized by their employers—or any professionals in that situation.
• Professionals in between jobs.
• Retired professionals.
• Self-employed, freelance, and contract workers.
• Small businesses or start-ups with cash flow challenges.

A one-time dues payment of $325 can be a deal-breaker for many, but it’s much easier to manage if you only have to pay $28/month.

In 2006, the American Occupational Therapy Association (AOTA) was eager to increase its recruitment and retention of younger members. A survey told them young members considered the cost of dues a key barrier to joining.

AOTA decided to test a monthly membership payment plan with auto-renewal on new members. Self-paying members were the most receptive to this new subscription plan. As a result, annual new member dues revenue increased by more than $200K. Yes, you read that right.

When they offered the monthly auto-renewal plan to all members, renewals increased by 15%—a $350K increase in dues revenue and a solution to the slowing renewal response rates (and lower retention) they had been experiencing with younger members.

They also learned that new member participants in the auto-renewal plan were 27% more likely to renew after the first year than new members who didn’t choose the monthly payment plan option. This helps support the theory that members are more likely to maintain an existing subscription, which would lower overall cancellation rates. 

We’re less restrained with our money when we spend it in small increments—ask anyone with an iPad full of $1.99 Kindle ebooks (ahem). A monthly auto-renewal payment plan allows a member to join your association for the price of lunch and start receiving benefits immediately. The decision to join is easier to make at the lower monthly price, especially if a member pays dues out of their own pocket. It’s like a trial membership without any fine print.

When you visit the Air Conditioning Contractors of America‘s (ACCA) website, you see their monthly dues rate of $39 splashed all over the place. Compared to the annual rate of $450, a monthly bill for $39 seems like a no-brainer which is probably why 40% of their new members have chosen this option.

“We’re an organization of small-business owners, so for a lot of our members it’s more of a personal money decision than it is a corporate decision. We want to make it as easy as possible for you to make that decision.”

The great thing about the automatic subscription renewal system is that members can set it and forget it. They don’t have to worry about a service interruption if they forget to pay. And, they don’t have to complete forms and gather approval signatures to get a check cut every year.

To make sure they have the member’s correct credit card number and expiration date, associations send a notice to members in advance of the renewal date (payment date). Members can log in and update their account information if necessary.

Everyone appreciates having options. Some members rather pay their dues all at once because their employer prefers it that way. However, others appreciate having a more budget-friendly subscription option. In fact, MGI found that 33 percent of the associations participating in their survey said one of the top reasons members didn’t renew is because employers wouldn’t pay or stopped paying the member’s dues. That’s less of a problem when dues payments don’t cause sticker shock.

Association staff love auto-renewal payment plans because they reduce the amount of time spent on the renewal process. You no longer have to spend time developing and sending manual renewal notices, making renewal calls (or asking members to make those calls), and finding out where invoices ended up and where they need to go to get paid by the member’s employer. The time you used to spend on these tasks can now be spent on more mission-critical work.

One time-consuming task for staff is dealing with expired or reissued credit cards. However, that’s less of a problem now as more payment processors are offering an Account Updater function. With your members’ permission, if a card is declined, the payment processor automatically requests a card update from the card networks and receives the most current card information along with authorization of the monthly fee.

29 percent of the associations participating in the MGI survey said one of the top reasons members didn’t renew is because they simply forgot to renew. Auto-renewal eliminates that problem.

With auto-renewal, you also don’t have to worry about dues invoices ending up on the wrong desk. And, as long as their credit card still works, you don’t have to worry about members in transition (personal or professional) who forget to provide you with a new mailing or email address.

The business world has taken to the subscription model because it provides recurring revenue each month and a steady predictable revenue flow throughout the year. Best of all, according to the EnSYNC survey, half of the associations offering either automatic renewal or installment plans reported improved member satisfaction and retention. Isn’t that what it’s all about?