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Amy Rauch Neilson
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| 10/10/2008 11:20 AM |
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You’re on it. As one of the founding members of a brand-new, start-up investment club, you’re on assignment (sounds a little James Bond-ish, doesn’t it?) to recruit club members. And not just any members. People who have a genuine interest in investing. People who you can count on to not only show up, but to show up prepared. People who love to learn and are gung-ho about learning the stock study tools. People who want to be a part of making your new club a long-term success.
So, now that you’ve found a dozen or so core members who meet this criteria, your job is done, right? Well, yes – and no. The good news is, your efforts will help to build a strong foundation for your club. The bad news is – if you’re one of those list-making people who revels in crossing off yet another item – club membership is not a “recruit once and you’re done” kind of deal. “No matter the club, there’s always going to be some turnover – whether it’s because a member is moving, or for health reasons, or because he or she simply can no longer commit the time and energy the club requires,” says Gene Rooks, co-treasurer of the Southern Women Investing Money (SWIM) Investment Club of Orlando, Fla.
Club membership recruitment is a process that begins at the club’s inception and goes on for the rest of the club’s life. Take a deep breath. You’re not in this alone. In fact, there should be a whole committee of people just waiting to help you: Your club’s Membership Committee.
Membership Committee
Most clubs have a Membership Committee – though the definition and formality of such a committee varies from club to club. Members of SWIM consider their Membership Committee to be rather informal, Gene says. That is – the committee goes into action only on an as-needed basis. “If our club has around 15 or 16 members, the Committee isn’t active, though all of our members keep their eyes and ears open at all times for friends or co-workers who would be compatible with our group,” she says. If the number of club members dip below what the club considers optimum, the Committee springs into action.
Whatever their format, Membership Committees will be better prepared to fulfill their mission if, with the guidance of the club’s members, they have already established the answers to the following questions:
- What’s Our Optimum Number?
When it comes to investment club membership, what’s the magic number? The answer is that there is no single answer; it’s different for every club. Most clubs hover around a dozen to a dozen and a half. “We have 14 members currently,” Gene says. “We like to keep membership at a minimum of 12 and a maximum of 20. We generally like to stay around 15. We find that, when we drop below 12, our meetings are a bit flat. At around a dozen, even if two or three members are absent that month – there are still enough people to accomplish our goals, and to express enough opinions to make the meeting interesting.”
Yet, other clubs, like the Crow River Investment Club of Minneapolis, Minn., find that more than a dozen members is just too many. “We have a limit of 15 members, and we've spent the past seven years trying to get there,” says Club Vice President Lynn Ostrem. “After we hit that number this past summer, we were sorry. It was too many. We had people falling through the cracks -- easy to hide in a crowd -- and we lost the intimate discussions that used to make our meetings so great. We’re back down to nine for now, but we have two people who really want in. We'll be talking about them at our next meeting.”
- Who Are We Looking For?
No matter the size or the style of the club, most clubs share the same response to this question. They’re looking for new members who:
- Are game to learn how to invest and to use the club’s established study methods and tools;
- Can commit to both regular attendance and regular contributions;
- Are willing to make the necessary time commitment outside of the regular club meetings to conduct stock studies, research, etc.
- Where Do We Find Them?
Just as they did when the club was looking for its initial members, most investment clubs capitalize on networking. “When our club is looking for new members, each of our current members begins networking – searching for people who will fit right in, whether it’s someone from church or a coworker,” Gene says.
“If they show an interest, we invite them to come to a meeting and see what it’s all about,” Gene says.“Our overall guidelines call for prospects to attend three meetings before the club votes on their membership application.”
The secret to recruiting long-term members is two-fold: While it's important to encourage prospective members who show a genuine interest, it's equally important to allow those whose interest wanes after attending a meeting or two to move on. “We've never rejected someone who attended three times and showed an interest,” Gene says. “By the same token, we don't push those we’ve invited to attend our meetings. We just make sure that they know where to be and when – and we leave the rest up to them. If they have excuses or forget more than once, they usually don't keep coming for further consideration."
- What Are Our Procedures for Joining?
When it comes to new member prospects, most clubs set and follow formal guidelines. Typically, that means inviting the prospective member to attend three meetings before the prospect and the club members decide if it’s a good fit.
“On the first visit, we give them a brief overview of the club, give them a copy of BetterInvesting magazine, and a copy of our application for membership, which spells out expectations,” Gene says. “At the second meeting, we give them a copy of the Partnership Agreement and Club by-laws, and invite questions. The Membership Committee is available to them for phone calls in between meetings for further clarifications if needed.
“At the third meeting, the prospective member turns in her completed application, and after being voted in, she’s asked to sign the Agreement of New Member (see sample agreement, below), which acknowledges our club’s Partnership Agreement and by-laws. This is a document that the new member keeps with her.”
Like Gene’s club, Lynn’s club also requires prospective members to attend three meetings. “We ask prospective members to attend three meetings, after which they are required to buy Toolkit,” Lynn says. “Our training process to this point consists of book recommendations and a few hands-on training sessions on the Stock Selection Guide between meetings.”
Just as there is no magic number for club membership, there’s also no magic answer as to how a club can identify whether or not a prospective member will be a good fit. “We’re working on a more structured approach not only for new members, but also for visitors who are prospective members,” Lynn says. “We are trying to figure out just how to determine if the visitor will be a good fit.”
Now, it’s your turn. I’d like to hear from any club members out there who would be willing to share their success stories and secrets for finding new club members that fit the bill.
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 Attachment: MembershipSample1.doc
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