With a D.C. headquarters spanning an entire block, membership of 36.3 million and almost $1 billion in revenues, AARP looks like a behemoth.[1] Its $12.50 membership fee, direct mail campaign and array of member services have attracted over 2.5 million new members each year since 2000.[2] The robust growth, however, masks the challenges AARP faces in recruiting boomers and minorities. Appealing to these groups and distinguishing itself from competing organizations will determine whether AARP maintains its status as the premier national organization for adults 50 and older.
AARP still relies primarily on direct mail for recruitment –Charles R. Morris reveals that its massive mailing operation is the product of “diligent mining of hundreds of data sources – drivers’ registrations, credit card data, voter registration lists,” and more.[3] As Morris observes, the near impossibility of finding a fifty-year-old who has not heard from AARP demonstrates the thoroughness of the organization’s solicitation efforts.[4] Since AARP’s constituency is older people, it must court new members just to break even - over 2 million members die each year.[5] AARP also faces the difficult task of recruiting people who vary widely in age, socioeconomic status and ethnicity. Yet membership in AARP increased in the last 15 years from 33 million members to 36.3 million at the end of 2005, with the highest growth occurring in the last 5 years. [6] The year 2005 brought AARP’s largest membership growth since 1990 and AARP, according to its press center, is committed to sustaining this growth by “actively reaching out to [baby boomers] with products and services, as well as our advocacy and service.”[7] One reason for the recent membership upswing is the $100 million “Today’s AARP” rebranding campaign launched in 2000.[8] Focus group feedback indicated that AARP had to remake its image to appeal to baby boomers and dispel the notion that AARP membership is just for retirement-home residents. It also dropped the name American Association of Retired Persons and is now simply AARP. The marketing strategy seems to have paid off – boomers are joining AARP in record numbers.
“Today’s AARP” television and print ads featured active boomer-age subjects extolling the benefits of AARP membership, hoping to show boomers that AARP has much to offer.[9] But AARP’s executive director Bill Novelli thinks that “the advertising did not do enough for us” and plans to tout a “better message” highlighting AARP’s financial and political clout.[10] He is pleased, on the other hand, with minority recruitment efforts. AARP’s push to increase minority membership has added Hispanic members, in part due to Spanish language ads and a Spanish-language magazine called Segunda Juventud. The program has yet to result in similar increases among Asian and African Americans, but Novelli plans to intensify recruitment of these groups because such endeavors are “expensive…but essential” to growth.[11] Novelli revised his 2000 goal of reaching 50% of people age 50 and up to 45-47%, citing a dose of realism.[12] He notes that AARP is “recruiting and retaining boomers at about the same percentage as the generation before them” and attributes this recruitment level in large part to boomers’ desire for the material benefits of membership.[13]
Member benefits include access to AARP discounts, insurance, investment services, tax assistance, AARP: The Magazine (tailored to three different age brackets), advocacy, newsletters and more. Many people join AARP primarily for branded discounts, services and insurance - products that account for 40% of AARP’s revenues through royalties and service provider relationship management fees.[14] To maintain and increase its products’ appeal in the face of heightened competition, AARP is expanding the products and services it offers, creating new partnerships and demanding product innovation from suppliers. For example, AARP is in talks with several drugstores about selling AARP-branded items and recently partnered with Home Depot to increase job opportunities for older adults.[15] “We’re finally being proactive, instead of waiting for companies to come to use with ideas,” says Dawn Sweeney, president of AARP Services Inc., the for-profit subsidiary that manages AARP products.[16] As more and more groups vie for AARP members’ business, AARP’s ability to compete will determine its growth potential. As Horace Deets, former executive director of AARP, notes, “people are no longer joining associations just to join; they want organizations to prove their relevance, justify dues, and describe what they can offer that can’t be provided elsewhere.”[17] The size of AARP gives it a significant advantage in providing unique, high-quality, low-cost products. “AARP is our largest customer, so when they say they want a better product, we try hard to develop one,” says Lois E. Quam, chief executive of United Health Group’s Ovations unit.[18] AARP recognizes that affordable, functional products and discounts are the key element of its member recruitment and retention strategy. As such, it plans to maintain and improve current products while rolling out a slew of new ones targeted at boomers.
Though 10 million boomers have already joined AARP for its array of benefits and services, recruitment remains an ongoing challenge.[19] Boomers are “used to having things their way,” so their “attitudinal” and “behavioral” diversity poses a major challenge, according to Deets.[20] Bill Novelli contends, on the other hand, that AARP’s message can be relevant to boomers because “when it comes to needs there is an awful lot of similarity” among boomers.[21] Novelli thinks the large age gap between members will not damage AARP’s ability to serve each generation; he believes “the younger and the older want income security [and] healthcare…[and] when you get down to values there’s virtually no difference among any of the generations.”[22] But “boomers are notorious non-joiners,” unlike the preceding generation, so AARP must continue to innovate in its solicitation of reluctant 50+ adults. AARP’s boomer recruitment will likely increase in the next few years as it finds new, particularly material, ways to appeal to boomers.
Although material benefits are currently the main membership incentive, purposive incentives may attract more new members in coming years. As boomers retire, they will likely seek meaning and purpose in their lives after work. This desire presents “an opportunity to help boomers create a social legacy of profound importance” that could redefine retirement and reenergize the American tradition of civic engagement, says a Harvard School of Public Health report.[23] AARP already sponsors numerous community service initiatives through its state chapters; members performed over 3.2 million hours of service in 2003.[24] If it persuades non-profits to create boomer-oriented volunteer opportunities and mounts a campaign to encourage service, AARP could be the key force in galvanizing community engagement. This civic awakening would increase AARP membership though a new wave of boomers looking for ways to use their skills and interests in their communities.
A smaller group joins AARP for its lobbying prowess, but most members are vaguely aware that AARP has some influence in Washington. Recently, more members have become attuned to AARP’s political activities because of its support for the controversial new Medicare prescription drug benefit and President Bush’s recent Social Security reform proposals. AARP’s backing of the drug legislation resulted in a stream of criticism from members and Democrats who felt betrayed, but Bill Novelli has no regrets. “You get what is good and then you build upon it,” he says.[25] “We’re very sure…it was the right thing to do.”[26] Some have ended their membership in protest of AARP’s involvement in the bill, but as of yet no mass defections have occurred. AARP membership may have increased, on the other hand, in response to Bush’s Social Security reform agenda- a plan that fizzled thanks to AARP’s zealous opposition. Concerned about retirement security, older adults may have seen AARP membership as a way express practical opposition to the proposal through AARP’s lobbying clout. Thus the record member growth in 2005 may have been a response to the threat of Social Security reform.
AARP will likely continue to grow in the future. Its name is respected and its marketing efforts are flexible and effective. It has responded aggressively to competition and it monitors the desires of older adults. These characteristics will ensure that AARP maintains its status as the largest non-religious organization in the United States.
AARP Top Five Years of New Enrollment Activity Spanning 1995 - 2005
Source: Barbara Foelber (AARP Press Center) email, February 6th 2006.