NARFE Membership Marketing Federation Presidents Membership Crisis State

NARFE Membership Marketing Federation Presidents Membership Crisis – “State of the Union” July 2013, Orlando Florida

NARFE 30 -Year Membership Decline Since the NARFE membership high in 1982, reliance on the OPM list for acquisition, the aging of a retired membership base and both cultural and environmental shifts have accounted for steep decline. 600, 000 OPM List History - Over 30 years since membership high = vulnerability 500, 000 • Early 1980 -1982 – Full access to OPM file • 1983– 1993 – No access to OPM file 400, 000 • 1993 – began twice yearly OPM access 300, 000 • Current - OPM back log in full retirement benefits 200, 000 Environmental History - Over 30 years since membership high = outside of NARFE control 100, 000 • Aging membership base 0 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009***** 2012 May 13 Note: Thirty Year Trend / Consitant Loss since 1999 • Cultural shift away from membership organizations • Technology based lifestyle change

Membership Crisis – “State of the Union” Loss Analysis – Reported Deaths 3 Reported Deaths among NARFE members has escalated, currently running 23 percent higher then 2012. Reported Deaths Monthly Ave 2012 Monthly Ave Jan-Apr 2013 685 845* Percent Change 2012 vs 2013 * Does not include deaths from Life Membership file (3, 658) or Honorary Membership file (1, 060) 23%

Membership Crisis – “State of the Union” Loss Analysis – Renewal Rate Erosion 4 With the increase in reported deaths, we can only assume that unreported deaths are also on the rise. Both reported and unreported deaths are contributing to a renewal rate erosion. Expire Months Jun – Nov 2012 78% Dec 2011 – May 2012 79% Jun – Nov 2011 81% Dec 2010 – May 2011 82%

Membership Crisis – “State of the Union” Loss Analysis – Dropped for Non-Payment 5 With the escalating reported and unreported deaths, the monthly average “Dropped for Non-Payment” (as reported on the Gain/Loss) is on the rise. Dropped for Non-Payment Monthly Ave 2011 2, 946 Monthly Ave 2012 3, 210 Monthly Ave Jan-Apr 2013 3, 526 Percent Change 2012 vs 2013 10% 2011 vs 2012 9%

Membership Crisis – “State of the Union” Gain Analysis - Reinstatements 6 With dedicated promotional effort beginning in the Fall of 2010, culminating in the current bi-monthly mailing to lapsed members, we see significant gains in reinstatements. Reinstatements Monthly Ave 2010 720 Monthly Ave 2011 842 Monthly Ave 2012 1, 119 Monthly Ave Jan-Apr 2013 1, 526 Percent Change 2012 vs. 2013 +36% 2011 vs. 2012 +33% 2010 vs. 2011 +17%

Membership Crisis – “State of the Union” Gain Analysis – Retention 7 Despite escalating deaths, total retention (renewal plus reinstate) remains extremely high. Annually Renewing Percent of Total Membership Renewa Reinstat l e Retentio n 66% 78% 45% 88% 100% 100% Life /Honorary Members 12% Dues Withholding 22% Total 15% of individual member association report retention rates of 90% or higher 92%

Membership Crisis – “State of the Union” Slowing the Decline 8 With the exception of reported deaths, all gain/loss indicators are going to the right direction. GAIN Reinstates Total New Members LOSS Dropped Reported Deaths Total Gain/Loss Cancels 2011 1, 257 842 2, 099 52 2, 946 695 3, 693 (1, 593) 2012 1, 047 1, 119 2, 167 37 3, 210 685 3, 932 (1, 766) J-M 2013 1, 015 1, 526 2, 541 39 3, 400 815* 4, 254 (1, 713) 2011 to 2012 -17% +33% +9% +1% +6% -11% 2012 to 2013 -3% +36% +17% +6% +19% +8% -3% * Does not include deaths from Life Membership file (3, 658) or Honorary Membership file (1, 060)

Membership Crisis – “State of the Union” Slowing the Decline 9 May Close Results – further evidence of a slowing decline The May Gain/Loss Report reflects a total membership of 258, 111. When the Life Membership database initiative (which removed over ten years of unreported deaths (3, 568) from the file) is eliminated from the year-to-date figures, January to May losses are 23% less than this same time period last year.

Membership Crisis – “State of the Union” Recruitment Efforts 10 OPM response has seen a steady decline over time. With the back log in full annuity payments, we are hovering at 4%. Campaign Response Spring 2005 6. 58% Fall 2005 9. 18 Spring 2010 6. 76 Fall 2010 6. 94 Spring 2012 7. 00 Fall 2012 4. 02 Spring 2013 3. 62 to-date Reliance on OPM for large volume acquisition has left us vulnerable. Aggressive prospecting and further testing of outside lists are essential.

Membership Crisis – “State of the Union” Recruitment Efforts 11 Outside Lists The rental universe, beyond OPM, for federal employees and retirees is relatively small and the most responsive lists are quite expensive. Standard offers have not worked. Successful use of these lists will be dependent on 1. Success of the Free 6 Month Trial Offer or 2. A new break-though.

Membership Crisis – “State of the Union” Prospecting Efforts 12 Prospecting – remains key to high volume acquisition � As the 2013 budget, advertising dollars have been brought to the prospecting task. Our media spending now must work double-time, providing both high brand exposure AND high volume prospects. � Testing has revealed that highly targeted electronic newsletters are most effective, i. e. Government Executive Retirement Planning e. Newsletter Fed Daily Newsletter Government Executive Pay & Benefits e. Newsletter � Select interstitials (pop-ups) are working well and email blasts to best performing newsletters are being tested � Radio and WTOP online advertising did not produce high volume leads, only expensive exposure.

Membership Crisis – “State of the Union” Prospecting Efforts 13 Prospecting – online lead generation ad samples

Membership Crisis – “State of the Union” Prospecting Efforts 14 Prospecting – statistics of note � September 2012 – April 2013, online advertising delivered 12, 994, 330 impressions. � Period March – May 2012 produced an average cost per lead of $11. 90 (Industry standard -- $20 -$25) � 92% of leads generated are active federal employees � NARFE’s ad click through Rates (CTR) is currently running at 13% (Industry standard. 07 -10%) � NARFE conversion rate (Form-fill of virtual M 2) is 24. 1% (Industry standard – 8 -15%) � January through June 2013 NARFE online campaign generated 6, 040 leads

Membership Crisis – “State of the Union” Prospecting Efforts 15 Prospecting – field support continues � The F-135, current narfe magazine and M-2 cards are promoted wherever possible as key recruiting and prospecting tools. All are encouraged to limit event materials to this “kit”. � A sample “elevator speech” is sent with each request and available online. Keeping the Exchange Focused Limiting materials and having a rehearsed “elevator speech "will keep the conversation focused and provide manageable, digestible information for the prospect.

Membership Crisis – “State of the Union” Prospecting Efforts 16 What does Headquarters do with the prospect list? New prospect letter � The first correspondence, a letter acknowledging the prospect’s recent interest and inviting them to join, is sent within a week of data entry. Email cultivation series � All prospects, upon data entry, are entered into a six-part email cultivation program. Prospects are offered white papers, take a survey, and are invited to join. Relevant engagement is a key factor in converting prospects to members. Bi-Monthly mailings � Prospects are selected for bi-monthly acquisition mailings. Multiple exposure is a key factor in converting prospects to members.

Membership Crisis – “State of the Union” Efforts to “Get into Federal Buildings” 17 Beyond the substantial exposure to current federal employees via online advertising and lead generation, four additional plans are in place to “get into” federal buildings. � Six month plan to “gift” 165 agency HR officers with magazines, brochures, white papers, “how can we help you? ” surveys and emails with free downloads for distribution. (Sample of July issue letter attached) � Introductory letter from Headquarters available for use in the field. It will be included in the updated F-10, Chapter and Federation’s Officers Manual. (Letter attached) � “Best Effort” model from Headquarters for entry and implementation into two agencies. (Draft letter attached) � Call for best practices from field to be solicited in next Recruitment & Retention Journal and shared online.

Membership Crisis – “State of the Union” e. NARFE 18 With a current membership of 14, 971 and test results which reveal that e. NARFE is our most responsive offer, e. NARFE remains the critical direct response offer during the membership Local Chapter crisis. vs. INCREASE in response to e. NARFE vs Choice Segment e. NARFE offer Lapsed 75% Prospects 72% OPM Annuitant 15% OPM Survivor 15% Segment DECREASE in Response to Choice Lapsed 62% OPM Annuitant 33% OPM Survivor 24% Prospects Sample to small for significance

Membership Crisis – “State of the Union” e. NARFE 19 Important to note: The ONLY active e. NARFE promotion to lapsed (non-members) begins eight months post-dropped for non-payment. Lapsed members from as far back as 2005 have been successfully reinstated Prior to receiving a lapsed member mailing, an individual would have received: � � � Three renewal notices, A last issue cover wrap and, If there is an email address on file, three electronic renewal notices. This is in addition to any chapter or federation level efforts. All encourage renewal to the local chapter. The NARFE brochure, website and magazine all offer both local chapter and e. NARFE membership

Membership Crisis – “State of the Union” The Bottom Line 20 Sole reliance on the OPM list of recent retirees and survivors has left NARFE vulnerable. The current OPM backlog, which leaves so many recent retirees with only partial annuity, is contributing to a decline in response to the OPM mailings. NARFE member deaths are escalating, contributing to an erosion of the renewal rates and an increase in Dropped for Non-Payment statistics. Reinstate statistics have improved dramatically, providing us a very strong retention rate – despite member deaths. There is growing evidence that the membership decline is slowing.

Membership Crisis – “State of the Union” The Bottom Line 21 Recruitment of new members is our most critical initiative. With limited and expensive outside list options, building an internal prospect list is the key to large scale acquisition. Advertising dollars spent for online lead generation are providing both a large volume of prospects and far reaching exposure of the NARFE brand to active federal employees. HQ is currently “Getting into Agencies” via online lead generation and a monthly “gifting plan” for agency HR officers. An agency introduction letter has been provided for chapter and federation use.

Membership Crisis – “State of the Union” The Bottom Line 22 Headquarters will solicit and compile best “Agency Entry” practices from the field. e. NARFE is our most responsive direct mail offer and critical in our efforts to manage the membership crisis.

Membership Crisis – “State of the Union” 23 Federation and Chapter Crisis Management Initiatives In addition to HQ initiatives, Federations and Chapters can support recruitment efforts: Develop a prospecting plan � Map out event opportunities and best possible staffing (limited) � Set goals � Keep brochures (F-135) and M 2 s on hand for chance encounters � Order magazines, brochures and M 2 s for event tables � Develop a personal elevator speech that strongly positions NARFE as the Legislative Voice and Information Resource for federal employees and retirees (sample available) Identify, build and cultivate relationships within local agencies � Individual’s success in gaining access to federal buildings and invitations to events within them have been most often based on long-term cultivation of a personal relationship

Membership Crisis – “State of the Union” 24 Federation and Chapter Crisis Management Initiatives In addition to HQ initiatives, Federations and Chapters can support recruitment efforts: Pursue social media � For those who are comfortable within social media, spreading the word about NARFE is effective public relations � Best Practices will be solicited, compiled and made available Welcome and engage new members � Assess new member needs � A happy new member is the best NARFE recruiter For those who resist local chapter membership, suggest e. NARFE