Membership

Should Your Association Adopt Dynamic Pricing?

Why treating your association like an airline might make a difference to your members.

Would associations have more members if dues functioned like flight sales?

A cheap flight is a hot commodity. Check on a Tuesday (reportedly known for having the lowest prices for airfares) or fly out on a Monday morning versus a Sunday night and it might make all the difference in meeting your budget. The more popular the weekend, the more you’ll check prices and hurriedly jump on flight deals for fear of missing out.

Perhaps we should be looking at variable pricing as a tool not only to generate more members or attendance but also to generate more net revenue.

Why the jumping prices? Dynamic pricing is the big factor behind these sales—flights are priced according to demand and vary throughout the week (sometimes even the day) using complex algorithms. The notion isn’t contained to airlines, though. Apartment complexes, theme parks and, most notably, e-retailers are all jumping on board with dynamic pricing.

Why should associations pay attention? Imagine if prospective members clamored to join your association the same way people rush Kayak.com two months before Christmas. Steve Drake, president of SCD Group, Inc., explores this notion in a recent blog post, arguing that “perhaps we should be looking at variable pricing as a tool not only to generate more members or attendance but also to generate more net revenue.”

How can you do it? In the same way retailers discount certain goods during high periods of demand (like around the holidays), associations can learn to adjust membership dues the same way. For instance, what would happen if instead of the usual yearly dues fees, there were discounts by renewing earlier, or for a longer period of time? The idea of shifting prices when there’s higher demand can lead to larger sales and ultimately more members. Another way to think of it is the theory of social proof, where consumers are more apt to buy once they see others buying, as explained by TechCrunch.

Drake offers a few ideas on why associations aren’t quick to adopt dynamic pricing, including lack of technology, too much board member oversight or possible member complaints on cheaper pricing for some, not all. But, he says, “[I]t’s time for associations to explore pricing models.”

Has your association ever flirted with the idea of dynamic pricing? What do you think would happen if it did?

Chloe Thompson

By Chloe Thompson

Chloe Thompson is a contributing writer to Associations Now. MORE

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