Post image for Realignment #4: The New Engagement – from Participation to Connection

Realignment #4: The New Engagement – from Participation to Connection

Excerpts from the new book: The Demand Perspective: Leading From the Outside In

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From Measuring Participation to Assessing the Value of Connections

One way that membership organizations measure engagement is by numbers, such as events attended and benefits used by members. While helpful as one of several indicators of members’ levels of interest, these metrics tell you nothing about the real value customers get out of your services and your ability to retain them. For example, you can love an association’s events or mission but still consider them peripheral to the big issues that preoccupy you and, hence, be ready to jump ship if a more relevant service appears on the horizon.

When using quantitative measures for participation and success, you may pat yourself on the back and feel secure because you have a much bigger share of the market than your specialist, for-profit competitor. Yet what if most of your members were nominal participants who pay your annual fee of $150 a year, while they see your competitor as their go-to resource for strategic business problems and are willing to pay thousands for more customized services? Or what if your membership has increased in numbers but there is also a proportionate drop in the participation of CEOs and other decision-makers who were increasingly sending their subordinates in their place?

Not all members are equal in terms of the value they represent for an association. Strategically engaging decision makers, for example, is far more likely to result in retention than having to coax, educate, and convince them of the value of your membership for their employees. It is also the path to growth into new services, products, partnerships, and categories of membership for other categories and levels of employees within a company. Such qualitative criteria based on value are sorely lacking in decisions associations make with regard to strategy, engagement, allocations of resources, and similar determinants of value and relationships.

From Recruitment to Development and Retention

Product-oriented organizations in all sectors tend to treat customer engagement as a “feel-good” experience and an end unto itself with the hope that it will somehow translate into sales. They view customers as end goals rather than as assets to continuously develop into increasingly higher levels of value and engagement. This mindset creates an enormous opportunity loss for associations at a time when developing, upselling, and cross-selling to existing customers is a far more effective path to growth than constantly relying on getting new customers.

Most executives I interviewed could not say what member engagement should lead to. One of the major differences between participation or social interaction and engagement is purpose. Members who choose to make use of an organization’s assets to meet specific needs or solve important problems will be far more engaged than aimless, nominal members who do not see a direct link between the association and the problems facing them. Engagement is not static or directionless. Associations should take every opportunity to convert passive participants into active members, to develop active members into highly engaged members who see the association as the go-to resource, and to transform engaged members into champions and strategic partners who are instrumental to growth and innovation.

The problem is that inside-out associations are wired to produce and sell products—membership, educational programs, insurance, exhibition space—rather than to grow and manage relationships. The impulse is to recruit members rather than develop them. As evidenced throughout this book, there is little thought in most associations I’ve studied about what to do with members once they come through the door. In successful, market-leading companies, customer relationships begin rather than end with sales. Customer value is realized over a customer’s lifetime rather than episodic transactions.

Instead of revenue and value accruing from one-time sales of single products and events, for example, Sermo, an online physicians’ network, is constantly moving corporate members to higher tiers of membership and engagement. Its phenomenal growth was based on developing its relationships with its members and expanding outward to members’ value networks and new applications of its knowledge capital.

Case

Sermo: Targeted Multilevel Engagement

Sermo is a privately owned company that was launched in 2006 and quickly became the largest online physician community in the world, currently with 115,000 physicians in 68 specialties in all 50 states. Sermo’s growth has been explosive. At the time of my interview with its founder and CEO, Daniel Palestrant, in 2012, Sermo was growing by about 1,000 to 2,000 new members a week.

Sermo has a unique business and membership model that engages two different customer categories—individual and corporate members—on their own terms. In a simplified version, Sermo’s formula might be summarized this way: Physicians from all 50 states and 68 specialties interact with each other in real time on Sermo’s web-enabled platform. They engage in case-based discussions and debates, share insights and information, and help solve problems, hence creating and constantly increasing an unparalleled body of knowledge. Organizations from many sectors that do business with physicians—from insurance and pharmaceuticals to government entities—pay hefty subscription fees to listen in on those conversations so they can better anticipate market needs for products and services.

Corporate members can engage with individual members on multiple levels and at various price points, for example, from “observing” (listening in without interacting) to custom research and consulting.

In addition to moving members up the engagement continuum, as one of Sermo’s managers told me, “We constantly learn from the results companies have had by accessing and using the information they glean from our physicians’ conversations. In this way, we are now able to advise companies and add strategic consulting to the value members can get from us. Eventually we were able to assemble portfolios of best practices that became a significant new source of value and line of business.”

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