Balanced Resources for Membership and Operations

The relationship between membership and operations in a co-op’s organizational paradigm could be considered in the context of something like the Chinese yin and yang, an ancient philosophy of balance. While operations provide strong internal structure (yang), membership programs extend the co-op out into the community where it can expand (yin). When both membership and operations bear equal value organizationally, chances for success in both areas are greatly enhanced.

However you look at it though, yin and yang be darned, membership and marketing programs tend to be lower on the priority list in some co-ops. Membership is treated as the co-op’s luxury item, where operations are considered the vital necessity. Pressing retail issues can easily become a store’s main focus, causing the co-op to perpetually push away membership development because a co-op can still function without a membership and marketing program.

This imbalance has in large part been due to what co-ops have needed to do as they learned to compete in an increasingly tight market—expand and improve operations to accommodate the growing needs of the food co-op shopper. It’s what some co-ops have had to do to survive. In this context, membership and marketing activities appear to be an intangible force in the face of the realities of running the day-to-day business.

“Upon entering a co-op you should get a sense of vitality that is a combination of successful store operations and a visible focus on membership and cooperation,” said Bill Gessner, CDS expansion consultant. “When these things are out of balance, the co-op is at risk in terms of stability, sustainability and survival. The co-op is likely out of alignment with its mission, and that will eventually catch up with it. If the co-op is strong on operational success, but not as a membership-based co-op, it risks losing its identity that distinguishes the co-op from its competition. If the co-op is strong on membership and weak on operational success, the co-op will not be in a financial position to be able to fulfill its mission.”

But when and how does a co-op change this dynamic? Cooperators now recognize the importance of the cooperative identity and the need for putting it at the forefront of everything they do. The only way get this message across to customers and staff is to put more resources into membership and marketing activities.

“Membership and marketing need to have an equal priority with operations,” said Lisa Malmarowski, marketing director at Outpost Natural Foods in Milwaukee, Wisc.

How does a co-op achieve this focus on membership if they don’t have strong programs already in place? The membership team or individual needs to interface with those operational systems that link with their membership or marketing objectives. “For instance, we need to connect with the front-end managers to continually evaluate our programs and services to see if they’re working. It’s a way to focus on member services without a formal system in place, although you need a person to still take the lead.”

Outpost continually assesses operational and member needs through surveys, staff training, and management team work. “We find ways to get feedback from our members and build programs around that,” she said.

This approach is corroborated by Marilyn Scholl, CDS board trainer and consultant who said, “General managers who understand that the business is stronger if it takes full advantage of the cooperative differences and sees that they are communicated in everything the co-op does, from laying out the register lanes to staff training to pricing structures, will see both operational and membership success.”

It’s true that in the short-term a co-op could probably be okay without a strong membership program, and that’s probably why it is so easy to put it on the back burner. However, in the long-run the co-op’s ability to be strong in situations that challenge the co-op could be compromised. For instance, will customers retain loyalty if a major competitor arrives? What do you do when your co-op hasn’t built member interest and responsibility for the co-op, and you only hear from those who are “against” something? If your staff is untrained on co-op issues and unknowingly spreads misinformation about your co-op, what then?

Clearly these are situations that greatly hamper the co-op’s ability to succeed. Whether or not a co-op is engaged in a crisis, they’ll have to address member service issues if it wants to really thrive.

At Bloomingfoods Market & Deli in Bloomington, Ind. their membership and marketing program was launched less than a year ago. As their co-op has grown, they’ve taken big steps to improve their member services by hiring two full-time staff (marketing and member services) to focus on that area of co-op development. “We’re working to elevate the importance of membership so that it is on par with operations,” said Jeff Brown, member services director at Bloomingfoods.

“We’ve made a lot of gains in the last 10 months,” he said. “We’ve gone from the transitional phase of hodge podge to a more coordinated long-term strategy.” In the time since he and marketing colleague Ellen Michel were hired they’ve done new membership drives, created a new email newsletter, and started a staff training program that educates staff about the co-op and equips them to better recruit new members. They also plan on getting more professional advice on how they can continually improve programs.

While he feels they’ve had some challenges with past poor practices (lots got “juggled and dropped” Brown said, in addition, the erroneous use of the word “lifetime” in past membership sales are requiring a major re-education effort) he’s seen the benefits of Bloomingfoods increased commitment to member services. Sales to members are now at 55 percent, and they have raised a total of $255,000 in member equity. “We’ve got 3,200 members now,” he said, a dramatic increase from years past.