This is a guest post by Andy Steggles, and is a sneak preview of a new book Andy is writing called Social Networking for Nonprofits. Andy kindly invited us to write a chapter for the book, so we’re excited to see it when it comes out!

Life Time Value 1.0 vs. 2.0
(engagement, engagement, engagement)

When most people think about the average life time value of a member they quickly try to calculate the average length of membership and multiply it by the average dollars spent per member in a year. While this is the traditional method, it’s also a very narrow way of viewing value. A member may have never attended a conference or event and simply paid their annual dues, but this doesn’t mean they don’t provide any other value to the community. LTV needs to be more holistic and embrace not just dollars spent but value provided.

LTV 2.0 is an emerging area which provides a more inclusive way of measuring who our most valuable members are. For example, I may have renewed my dues every year for the past 10 years with an average renewal price of $200 per year. LTV 1.0 would give me a value of $2000. However, this doesn’t take into account the 5 years I have served as a chapter officer, a further 3 years on a committee or perhaps the articles I’ve written for the association magazines and newsletters. Now let’s take this a step further and consider the emerging social tools available such as blogs, wikis or file sharing. When we look at these different engagement opportunities, we are not just talking about writing a blog, we’re talking about all the associated activities such as rating, commenting, reading, sharing etc. Creating is just one attribute surrounding a blog but there are many more which can be measured and ultimately rewarded.

Let’s suppose we have all our engagement areas identified. How do we quantify the engagement? One solution is to assign point values to each engagement activity and as every member performs an action, allow the system to dynamically record the associated point values. By collecting all the points from both your social platform as well as the more traditional engagement activities (chapter officer, committee volunteer etc.) the society will finally be able to run reports to recognize their most valuable members in general but also for specific activities. Recently I’ve toyed with the idea of assigning a point value to the dollars spent (or conversely assigning dollar values to points earned). The idea being that you can quantify the value of members across the board using a single metric vs. a mixture of points and dollars. I haven’t seen anyone do this yet but it is just a matter of time I think.

Next, how do we recognize the most engaged members? Now you may have selected a social platform with engagement metrics and have an AMS which can provide similar functions and you are finally able to run reports… what next? For the first time we can really start identifying and recognizing members who have contributed in non-financial ways. This is also an opportunity to encourage engagement by providing true recognition.

For example, each month you could feature your top three most valuable members in a page of your printed magazine publication. Similar to how ASAE features a “day in the life” of a member and/or features industry blogs, why not feature/highlight your most engaged members? Another opportunity is to assign threshold values for engagement levels i.e. 200 to 400 points equals a Bronze level of engagement. 401 to 500 is silver etc. you can then feature people who have recently broken into a new level of engagement for the first time. For example, at what level might you give away the prestigious lapel pin which recognizes industry contributions?
Consider assigning digital ribbons or taking advantage of social badging opportunities from your social platform. For example, if you view my profile on the www.SNAMA.org website, you’ll see how digital ribbons have been incorporated to provide a new type of recognition: www.snama.org/andysteggles

Not all recognition has to be online. Think of other more typical ways in which you can recognize and thank members: Perhaps present a certificate to the different members at your annual conference or have a new award for the year’s most valuable member etc? Roy Snell from the Corporate Compliance association recently introduced CE credits for blogs which met specific criteria.

Think about the possibilities of utilizing such measuring techniques and how you could utilize the results to recognize and reward members. We already know from books such as ASAE’s “Decision to Join” that the more engaged our members are, the more they are likely to renew – ultimately improving retention and the bottom line.