During my thirty years of activism visiting organizations like CFIB, I never heard anyone even use the word “marketing”. In private business, companies sell reality or to put it another way, they market what they make. But advocacy organizations are all quasi-political and sell emotion and perception as much as reality. And all advocacy organizations like CFIB evolve what is best called their “revenue model” or their “field model”. It is normally a gradual process of trial and error as organizations deal with change.
During the period 1943 to 1977, both CFIB and the NFIB in the US used a model in which the District Manager sold new business or renewal business, but not both. So, it would not be unusual for a Division, in say Alberta, to have six DMs doing new business and six DMs doing renewals.
And it was the policy to promote a DM from new business to renewals only if he was in top level bonus. And there were only two levels of bonus on new business. Ten percent bonus each quarter if sales per week averaged over thirteen sales per week, and a fifteen percent bonus if sales per week averaged over seventeen sales per week. During the years 1971 to 1977, we were selling the fight, which was the threat posed by the Federal Liberal Government.
What happened when CFIB had about 40,000 members and NFIB had 400,000 members was that it became difficult for DMs to make a good living selling just new business. Our presentation ratio went from 3:1 to 3.5:1. Earnings began to slip. And when we showed new prospects what our top people were earning, the offer was less attractive. As an interim measure, we introduced a salary plus commission compensation package for new DMs.
The NFIB started experimenting with having DMs do both new business and renewals and this was made possible by using a point system where points were assigned for either new business or renewals. After a year of testing, NFIB and CFIB put the system in place in 1977. Within a year, all DMs on salary and commission converted to full commission.
The next major change in our model was introduced in 1981, called the Nominee System, which was a system designed to provide warm leads to DMs selling new business. Nominees were member referrals who were made temporary members and after receiving a mandate, were called on personally. For ten years, what we called Nominee Renewals, provided a presentation ratio of one cheque for two presentations, which made the field highly productive.
Nothing really happened to our basic model until I established a goal of 100,000 members in 1993. I knew from the numbers that we would not be able to sell enough new business to reach this goal with our current renewal rate of 80%. Actually, our renewal rate was 82% in English Canada and 78% in Quebec.
In 1996, I was working on a new model whereby a membership online training offer would be combined with our legislative fight at the federal and provincial level. So, it was a new serious value-added benefit added to both our NB sale and renewal sale.
I created a not-for-profit organization called the Learning Institute for Small and Medium Sized Enterprises in which the Board was the Executive Committee of CFIB. My plan would have been put in place, but I found it necessary to resign my position of CFIB Chairman when LISME received a large and high-profile federal government contract.
Nevertheless, Catherine Swift changed the model in a similar way when a broad range of member benefits were made part of the renewal sale. This additional value bumped renewal rates in English Canada from 82 to 85%, but the big surprise was the jump in Quebec from 78 to 85%. This brought the membership up to the original 100,000 goal. It was obvious that the Quebec market was more pragmatic and less ideological.
Now under the leadership of Dan Kelly, further changes are being made to the model, and this includes group sales, a portion of renewals handled by telephone, and the monthly payment of fees. This all improves the cost structure of the field operation, but does not guarantee a significant increase in new business sales.
Dan has also introduced important member benefits like significant reductions in credit card charges, value that is not complex or hard to sell. With about four of these kinds of benefits, the potential of some DMs doing only new business becomes a viable option. A new CFIB model is in the making.
All advocacy organizations have gone through periods of growth and significant public impact and periods of decline and irrelevancy. CFIB has continued to grow because it has continuously updated its basic model to cope with changing times. The basic principles of advocacy growth have not changed, and that is, growth continues as long as you are adding District Managers who can make a living.