How to Improve Member Engagement with Digital Transformation.
Steven Hargreaves
Experienced Technology Executive | 25+ Years Driving Innovation, Growth, and Digital Transformation | Strategic Leader in Business Expansion & Client Engagement
Why Is Digital Transformation Important for Membership Organisations?
Membership Organisations face unique challenges in the current climate. Attracting, retaining, and delivering value by?engaging members in the right way will drive top-line growth but delivering these ambitions is more reliant on technology?than ever. Businesses that invest in the right systems and processes to provide a more joined-up service for their members remotely and in-person will be the ones that succeed.
The success of a journey towards digital change within a membership organisation can be split into three key outcomes:
Technology can hugely change how an organisation achieves all three of these?objectives, and a commitment is required from leaders across departments within the organisation to embrace change and?increase collaboration to overcome challenges during the transformation journey.
One of the biggest challenges we see in the industry is inefficiencies through a lack of joined-up systems and processes.
Multiple applications, processes, and services which do not integrate immediately prevent organisations from achieving a?‘single view of the truth’. Knowing when to intervene when member engagement is shrinking is critical to prevent churn and?unsubscribing. With disparate applications and data silos when the information reaches management through these systems,?it is already too late. Delivering the right engagement at the right time through predictive data analytics is imperative to?react to changing markets and consumer demands when disposable incomes are already stretched.?
Many memberships organisations are at odds with their current systems, perhaps it’s due to the following:
This can lead to frustration across departments as systems become siloed, marketing and sales see potential new members slip the net between handover, while customer service and engagement teams can find multiple employees contacting the same member too frequently. At a time when members can offer real value and a community when we are more isolated, the technology to deliver a joined-up, self-service experience can help your organisation stand out from the crowd.?
Is it better to purchase an off-the-shelf product or go with a platform approach?
Around the tech community, there's a consensus that platforms are better than products. As discussed above, it may be cheaper in the short term to acquire an off-the-shelf application that solves an immediate business problem in your organisation, doing so will eventually lead to lots of disconnected systems, all producing data which isn’t being used to improve your services.
Buying into a platform such as Microsoft, Google or Salesforce will ensure when you solve that problem within the confines of that platform, you can be sure it is secure, you have no lock-in to an individual provider, you have minimal setup time and you are able to extract more value out of the data that application produces.?
Listen to Marie Abery of Microsoft discuss Digital Transformation and its application to membership-based organisations.
The problem with this approach, is often that a platform can be quite generic, and it is intimidating to turn the overwhelming library of features, tools, and services into a more streamlined CRM system for your specific needs as an organisation, especially as all your users may not be tech-savvy.?
If we take the Microsoft Ecosystem there are many free add-ons for Microsoft software (called Accelerators) that gives you a huge head start on the platform by giving you pre-built tools and experiences that are often required by a membership organisation, so you can focus on your unique data and services, rather than solving the same problems that similar organisations have already solved.?
These accelerators can help:
Each outcome is delivered by a combination of IP, and custom configuration of features available in the Power Platform and ensures departments such as Service Delivery get an experience very similar to what they might expect from a specific product, while another department such as Training and Development will also see tools and experiences that feel familiar. This means all the data produced across the organisation is shared, and at an executive level, you can begin to see insights in real-time to make faster, better decisions.?
While not all elements may be relevant to your organisation – it enables integrators to help build experiences that feel familiar and valid across your organisation, without needing a huge initial investment before you see the benefits as an organisation.
Avoiding Vendor Lock-In
There’s little point in starting a Digital Transformation project if your organisation might end up locked into a single vendor, unable to grow anymore due to mounting third-party costs.
Before you start a Digital Transformation project it’s important you understand the risks of Vendor Lock-In, what it might mean for your organisation, and how to mitigate them…
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Complete Your Due Diligence - Be sure you know what your goals are when starting a Digital Transformation project and how they’re likely to evolve over the next 6, 12, and 60 months. Can your chosen partner deliver those for a cost you’re comfortable with? Set clear Target State Architecture goals for your project and build towards them so that everyone knows where they stand
Plan For An Eventual Exit – When budgeting for your digital transformation make sure you cost in a possible exit strategy should you outgrow your current CSP (Cloud Service Provider). Make sure there are no hidden fees when taking your data back from the Cloud (or shifting it to a different provider).
Design Platform Agnostic Apps – One of the biggest causes of vendor lock-in is when none of your apps or processes will work on a different platform, meaning if you do try and move everything you’ve done as part of your digital transformation to date needs to be reversed engineered for a new platform.?
Be Careful How Your Data Is Formatted – Data formatting is one of the hardest aspects of vendor lock-in to overcome. As different Cloud Service Providers (CSPs) all tend to format data differently, transporting it at the end of a contract can be difficult. Try to mitigate this in your due diligence stage by finding a vendor who doesn’t use any kind of proprietary formatting.?
Consider Multiple CSPs – There’s no law saying you must use just one CSP. If vendor lock-in is a concern for you then contract out different parts of your processes to different CSPs. Whilst this massively mitigates the risk of vendor lock-in, it should be noted that making the disparate aspects of your systems communicate effectively may have ancillary costs of their own.?
Treat Your Digital Transformation Like Lego – Component-led Development is the perfect way to digitally transform a Membership Organisation. Build different aspects of your transformation in isolation but design them all to fit together like Lego. That way, if you need to slow down, stop or speed up the pace of your transformation, none of your work is wasted and continues to function.?
Keep Control Of Your Intellectual Property – Different CSPs will have different terms & conditions. It’s likely if you follow a component-led development plan you’ll build up quite a large amount of development work that’s unique to your organisation. If you then want to switch CSPs make sure all that dev work you’ve done is actually yours to take as some CSPs will claim any dev work done within their platform is their IP to keep… meaning if you do leave you’ll have a pile of constituent parts that don’t work together.?
Reducing Membership Churn
Before you can begin to reduce your Membership Churn you need to understand when, and why, your members are leaving. To do that you need data on them, and the crucial point will be that the data is consistent and correct, giving you a ‘Single Customer View’ of all the touchpoints you share with them.
A single customer view is an aggregated and consistent representation of your members that can be viewed in one place which should include:?
Finding and calculating an engagement score by accounting for all channels of activity and using that data to build membership engagement funnels is the most successful way to reduce churn. Being able to use these metrics whilst still being responsive to the preferences of individuals and providing great value for all your members will be key in not giving away subscriptions for free. But to do that you’ll need to calculate the opportunity costs of different Churn Management Strategies.?
Imagine a segment of members who have low engagement. Past data tells us about 20% of those will churn within the next three months. From the 20% figure, you can calculate potential Margin Churn, allowing you to make a calculated decision on incentives to keep that segment engaged. Using the same data, you can see 30% of members who receive that discount will convert. But if it’s sent to a hundred members, you’re most likely giving that discount to ten people who weren’t going to churn in the first place. Using a Single Customer View will allow you to accurately calculate the ‘real’ cost of the discounts you’re offering.
Giving away too much discount isn’t efficient so calculating an accurate Margin Churn allows you to fine-tune the discount percentage offered in a predictable manner. All before you offer anyone the discount in the first place, thanks to the data you’ve collected. You can now calculate where’s best to deploy your resource to generate the most value.
For highly engaged members, you don't need to worry about Churn Management. Instead, you need to consider how to get them more engaged so you can do cool stuff with personalisation and segmentation. For the least engaged members, you can focus on re-engagement campaigns, building a content funnel to send people through with progressively better discounts to get them to re-engage.
And finally for members who you’re almost positive will churn no matter what you do you might start thinking about targeted outreach campaigns… picking up the phone, sending a personal email or maybe even sending a survey to better understand why those members churned allowing you to adjust your value proposition strategy based on the data you receive from it.?
Recommended Approach for Digital Transformation
So, when embarking on your Digital Transformation journey the first step starts with a mandate for change.
Evaluate the ‘As Is’ state, the risks associated with not modernising, and the ‘To Be’ state. Look to remove complexity, by designing loosely coupled architectures so that future upgrades and changes are less impacting and avoid vendor lock-in as previously stated in this article.
Look to leverage public cloud infrastructure to provide scalability, agility, and simplification of IT services through standardisation where possible. The below diagram is a pictorial view of a standard approach to digital transformation and the process of engagement with key stakeholders.
I'd love to hear your thoughts on what Digital Transformation looks like in your membership organisation and what you see as the main challenges you face? If you need assistance then feel free to reach out to me where we can have a 1-2-1 chat.