Lifetime membership value, or what is participation “worth” & how should we measure it?
Membership Puzzle Project commissioned Joe Amditis of the Center for Cooperative Media at Montclair State University to examine measuring the value of membership and participation. Here is a taste of what he found:
Formulas for calculating the lifetime value of a subscriber are relatively straightforward. Membership, on the other hand, can be much more complicated. There are certain core aspects of membership that are demonstrably valuable to an organization and its members, but it’s much harder to quantify what they’re worth and to nail down a dollar amount. A lot of it has to do with the difficulty in calculating the value of participation, which can be a huge part of membership organizations...
...When people donate to a charity or a good cause, they don’t typically expect to see any financial return on their investment — or any other kind of tangible return, aside from the satisfaction of knowing (and perhaps letting other people know) that they did a good deed.
Membership, on the other hand, is neither pure exchange nor pure altruism. Instead, it occupies a kind of middle ground that combines elements of both in order to create something even larger.
Membership allows an organization to take the economic return of a transactional relationship and the sense of purpose you get from an altruistic exchange and combine them with a participatory element. When done correctly, you get what Heimans and Timms call the “participation premium."
Read the rest of Joe's report for the Membership Puzzle Project here.
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