What is the value of member loyalty at museums and cultural organizations? We already know that the ten year value of the average member is 4.5x greater than the average visitor — but did you know that renewed members provide 66% more net revenue for cultural organizations than new members?
We live in an era of increased consumer choice and mobility, a trend that has only accelerated with the rise of digital engagement and e-commerce during the pandemic, and which has significantly reduced constituent retention and loyalty across sectors. This has deep implications for museums and cultural organizations, institutions where renewing members are integral to revenue generation and long-term sustainability.
As the maxim goes, “It costs five times more to acquire a customer than to keep an existing one” – and the data backs that up. Reaching new audiences is important, but investing in the satisfaction of your current visitors actually has a higher ROI. Simply by ensuring a positive visitor experience, you increase the likelihood that an individual will become a repeat visitor, a member, and ultimately a loyal advocate of your institution.
To that end, here are 10 ways for museums & cultural organizations to drive sustainable support and cultivate vocal champions of their institution and mission:
1. Be an Active Listener
A recent three-year survey from McKinsey found that consumer satisfaction has been in a sharp decline, exacerbated by organizations and brands that failed to keep up with the mass pivot to digital during the pandemic and the consequent shifts in consumer preferences.
Consumers are changing on the individual and macro level, with new trends overwhelmingly driven by the mass shift to digital over the past decade and accelerated by the pandemic. More people are online and on digital devices more often, which can be helpful in reaching your constituency – if you can cut through the noise and competition to connect with them in a genuinely impactful way and develop a meaningful relationship.
For example, the explosive success of subscription-based services across industry – from Birchbox and Chewy to Netflix and Amazon – shows us the value of a business model based on listening to your constituents, rather than telling them what they want. People want to tell you what they need out of a service, you just have to give them the opportunity.
Pro Tip: Create an easy way to capture audience feedback – whether through a comment box , webpage, or visitor survey, encourage your constituents to provide their thoughts and experiences, and make sure they have a clear and easy way to do so.
2. Communication is Key
Communication goes hand-in-hand with listening to your members, and is arguably just as important.
Staying in the forefront of your members’ minds will validate their commitment by reaffirming your consistency and availability – both essential ingredients in the development of a loyal member. A recent study from Culture Track found that trustworthiness tops members’ list of top loyalty motivators, with 61% of respondents saying their commitment to a cultural organization is most informed by how much trust they place in the organization.
Integral to building trust through communication is transparency and clarity regarding renewals and expirations. Making sure your members are informed about their access and benefits will not only keep them engaged, it will also reduce the amount of member churn attributed to members simply forgetting to renew. It will also open up lines of communication that you can continue to cultivate as time goes on.
Furthermore, in an increasingly mobile-first society, the channels and tools you use to reach your members are of utmost importance. Cutting-edge mobile communication tools like SMS Text Messaging – with its 99% open rate – helps keep members up to date on time-sensitive items as well as special events and benefits, and are proven to drive engagement and improve loyalty.
3. Get Personal
The rise of user data collection and customized user experiences means consumers expect digital services to be highly personalized and tailored to their specific needs. Personalization provides mutual benefit in that it not only improves member satisfaction and loyalty, but also helps you continue to improve your understanding of your constituents and better serve their needs.
With tools like Digital Membership Cards, you can personalize outreach through audience segmentation based on anything from demographics to member loyalty motivators. For example, a 2020 study in the Journal of Brand Management found that there are three different types of loyalty: Heart - those who are brand loyal based on a sense of idealism, identity, or mission; Head - those motivated by practical, rational cost-benefit calculations; And Hand - those who tend to remain brand loyal due to force of habit and resistance to change. Naturally, you’ll want to attune yourself to the unique characteristics and preferences of these different constituent profiles and align your approach to each with incentives that align with their respective values and goals.
4. Engage & Delight
Loyalty rewards programs are skyrocketing in popularity – from points-based systems to tiered membership benefit offerings, the private sector has tapped into consumer desire for concrete incentives and gamified design and leveraged it into an industry unto its own. However, recent data from McKinsey & Company suggests the relative saturation of the market has led to a plateau in engagement, with only 50% active loyalty membership – not a recipe for supercharging loyalty.
What’s the upshot? Even with attractive incentives and an engaging user experience, providing new and diverse channels for engagement is essential to maintaining an active and loyal member base. In addition to virtual entertainment and digital communication, this also includes onsite opportunities for engagement – in fact, not only are member renewal rates positively correlated with the number of times a member visits your organization, but with their level of engagement onsite as well!
5. Leverage Data to Drive Loyalty
In our digital-first era, developing a highly-targeted, effective member retention strategy is a basic necessity – and one that has become easier than ever: through data, museums and cultural institutions can learn what members value most about their membership and provide experiences aligned with those values. The better you know your constituency, the more likely you are to be able to meet their needs and foster long-term loyalty.
For example, demographic data: While the baby boomer generation has historically been the most consistent support base for museums and cultural organizations, recent data from Colleen Dilenschneider of Know Your Own Bone suggests millennials are now the most loyal constituents for cultural organizations - they have a shorter revisitation cycle (30.9% more likely to revisit within one year than older generations) and are 20% more likely to recommend an experience to their peers. Given that word-of-mouth recommendations and other user-generated endorsements are almost 13x more important in driving reputation and visitation, this makes millennials extremely valuable as loyal, vocal brand ambassadors. Compared to older generations they also have the highest lifetime value, which suggests an increase in returns from investing in cultivating millennial loyalty.
As the baby boomer generation ages and museums seek out and foster new groups as bases of support, basic data analytics can help define the preferences and needs of these newly-targeted audience segments, and meet them where they are; It can facilitate a more robust understanding of your different types of members, where they find value in your institution – and how valuable they are to you. With that foundational, holistic understanding of your membership, developing a targeted, data-based retention strategy will be a piece of cake.
6. Expand Your Time Horizon
Two-thirds of loyalty initiatives fail to deliver value, according to a recent study – indeed, many actually end up degenerating value for the institution that implemented them. However, the study also found that even loyalty programs that fail to directly drive revenue can produce secondary forms of value, by generating user data that can be used to boost many other organizational initiatives – and, crucially, by increasing loyalty long-term.
This is borne out by the date, as not only are members more valuable than visitors in the long term, the lifetime value of a member increases with each renewal.
In other words, loyalty investments operate on a deeper level, fostering relationships with members that will pay dividends over time. It’s a delicate balance between providing enough value (through discounts, perks, and other benefits) to acquire and retain members, while not giving away so much value for free that it compromises your bottom line in the short term.
7. Emphasize Exclusivity
According to the tour group MuseumHack, focusing on the economic value of membership is not enough. You also have to provide perks that demonstrate exclusivity and their value to you, like members-only events and early access to new exhibits. Members, and people in general, tend to place a higher value on something when there is scarcity of it. They also want to be included and feel a sense of belonging – especially when that inclusion communicates their unique value as loyal members.
Just a few ways to appeal to members and incentivize loyalty include: perks like free guest passes, gift shop or restaurant discounts, access to exclusive curator-led museum tours, and even points-based loyalty programs that reward return visits and engagement. By reaffirming the unique value of your members, you can incentivize renewals and foster long-term loyalty.
8. Provide Mutual Value
Guest pass referrals are one proven way to drive member retention: A study from Harvard Business Review found that you can expect at least 16% more in profits from referrals, and referred constituents have an 18% lower churn, or rate of attrition, than those acquired through other channels – with a 37% higher retention rate. And while retention does not necessarily always imply loyalty, in this case it does: referrals have a higher lifetime value and greater loyalty than other customers.
9. Prioritize the User Experience
When competing for member loyalty, one of the greatest benefits you can offer is convenience.
In our fast-paced, digital-first world, the desire for a seamless user experience has become a basic requirement – both online and off. Yet as it stands, arts and culture organizations too often struggle to provide the ease and efficiency their audiences expect: slow or overcomplicated, outdated tech can lead to a disjointed user experience, confusion around benefits and access, and declines in member loyalty. Counteracting that means providing a top-notch user experience that caters to your constituents, offers clear value and streamlined engagement processes.
That’s why so many museums are choosing to transition to all-in-one self-service systems, which allow members to quickly and easily access their information and benefits, purchase tickets and guest passes, and more.
10. Innovate and Evolve
According to the 2022 Commerce Innovation Report, Constituent loyalty drops when brands don’t innovate. The report found that more than half of consumers display a strong desire for brands that adapt to meet evolving customer preferences, payment options, and digital devices. Nearly three-quarters of consumers will take their business elsewhere if they feel their expectations are not met – with millennials most likely to abandon a brand if dissatisfied. Given the $2.5 trillion in spending power millennials represent, organizations looking to boost loyalty and prevent attrition would do well to be attentive to the generation’s needs and preferences.
There are many ways to nurture loyalty, all of which depend on first understanding your members' expectations, priorities, and values. With the right member insights, museums and cultural organizations can focus on deepening constituent relationships, turning visitors into lifelong members and advocates, and continuing to provide cultural value to new and returning audiences for many years to come.
Interested in learning more about digital solutions to build member loyalty? Request a free, no-pressure demo today!