Sometimes, you just get lucky.
Years ago, I became the membership director for the San Diego chapter of the American Society for Training and Development (ASTD San Diego). It's a nonprofit professional association for corporate trainers.
Membership grew 67 percent over the course of my two year term.
It might surprise you to learn we didn't resort to any traditional tactics:
Lower our prices
Offer new member discounts
Run a membership drive
What we did instead was leverage one specific insight to retain members and grow via word-of-mouth.
I discovered this insight by luck. Later, I discovered it’s applicable across a wide range of industries. It's now the cornerstone of my new book, The Guaranteed Customer Experience.
I'll share that insight in a moment. But first, let's look at why so many companies struggle to win and retain customers.
Why companies struggle to grow
In the simplest terms, companies grow by adding more customers than they lose. If you lose one customer, you need to add at least two new customers to post a net gain.
Lose too many customers, and growth becomes insanely difficult.
ASTD San Diego had lost 25 percent of its members over the past year when I became membership director. Even worse, the chapter was almost out of cash.
There was a palpable desperation amongst the leadership team.
Many of my colleagues wanted to offer a membership discount. Some argued we should offer a discount to new members while others felt we should offer a discount to existing members to entice them to renew.
I made a surprising counter-proposal: raise our dues.
It might seem strange to raise prices when you're losing members, but I had good data to back it up.
First, our dues were already lower than comparable professional associations. An additional discount would only cheapen the perceived value of a membership.
Second, we weren't losing members due to price.
I knew this because I had called every person who chose not to renew their membership in the past year. I also contacted everyone whose membership was expiring within the next 60 days.
My calls revealed exactly why so many members were leaving.
What you need to know about your customers
Business leaders have a lot of data, but they don't always know what to look for. There's one particular insight that can make all the difference.
What problem is your customer trying to solve?
This insight was popularized by Clayton Christensen. Customers don't purchase a product or service, Christensen argued. They hire a product or service to solve a problem.
For example, millions of people choose Amazon when they want a fast and convenient way to get nearly any product delivered.
Starbucks wins customers by making it easy to get a consistently good cup of coffee.
People join professional associations like ASTD San Diego because they want to grow in their careers. The chapter was losing members because it wasn't addressing that problem:
It lacked programs and other opportunities for career growth.
When interesting programs were promoted, they often failed to be as good as advertised.
A lack of value was the same reason the chapter struggled to recruit new members.
It didn’t matter what we charged members. Heck, we could make membership free! People wouldn’t join the chapter unless we promised to help them grow in their career.
This insight provided a clear path for our leadership team.
How to fuel customer-driven growth
Addressing the problem your customer is trying to solve is the key to growth. You win customers by promising to solve their problem. You retain them when you prove you can keep your promises.
I was fortunate that my fellow board members took the membership feedback seriously. The team committed to creating the strongest membership value proposition possible.
A mentoring program for new trainers was expanded.
The quality of monthly programs was improved.
Events were offered in multiple places to make them easy for more members to attend.
A one-day conference was created to expand learning opportunities.
Multiple volunteer positions were created that helped people develop new skills.
Our mantra was to make the chapter's value proposition so strong that joining or renewing was a no-brainer.
Amazing things began happening. More members started renewing. Soon, the top two reasons our chapter lost members were:
They moved out of town.
They were no longer in the training industry.
People stopped leaving due to a lack of value.
The more members that stayed, the more new members we attracted via word-of-mouth. Coworkers, professional colleagues, and friends started recommending the chapter to people they knew. Companies enrolled their whole training departments.
Over the next two years, our membership grew 67 percent.
We didn’t offer a discount. In fact, we raised our rates. We didn’t run an advertising campaign to attract more members. Our happy members did the advertising for us.
We simply helped more members grow in their careers.
How to identify your customer’s problem
There are two big advantages to identifying the problem your customer is trying to solve.
You can attract new customers with a promise to solve that problem.
You can retain customers by consistently keeping your promise.
The first chapter of The Guaranteed Customer Experience describes how to identify the problem your customer is trying to solve.
I've made it available as a special preview.
Download it now to read about a chain of convenience stores that earns far more money than its rivals by leveraging an incredibly simple insight: people want clean restrooms.
The Guaranteed Customer Experience