Who’s Afraid of the Big, Bad Nonmember?

Halloween was two weeks ago, but let’s talk about fear today. Not fear of ghosts or goblins or monsters, but rather the specter that haunts every comfortable association professional on a daily basis: change. It’s all about fear of the unknown.

In a blog post last week, Elizabeth Engel, CAE, CEO and chief strategist at Spark Consulting, posed a simple question: “Why is membership the only relationship?  (opens in a new tab)” Associations have a variety of stakeholders, ranging from sponsors to subscribers to legislators to the general public, but “associations insist on behaving as if membership is the only relationship people can have with us,” she writes. “Why does everyone have to be a member? Why are we still operating with the ‘you can have it in any color you want so long as it’s black’ mindset? The world has changed to one of mass customization, and we aren’t keeping up with people’s expectations and experiences.”

I’ve wondered the same at times, and I think the answer is less complicated than it might seem: (you guessed it) fear. Associations are built on the membership model. A significant (and, often, the largest) portion of revenue for most associations comes from membership dues. That’s reliable money every year. Who wouldn’t be afraid of losing that? I think it’s only natural that associations prioritize the membership relationship, so I find myself inclined to simultaneously defend it as common sense while also worrying about the complacency  (opens in a new tab) it engenders.

To reframe the question a bit, is membership the best relationship? For associations, overall, yes. I believe the membership model best serves the typical association mission: growing an industry, advocating for it among legislators and the public, collecting and sharing knowledge and ideas, standardizing practices, and so on. Those things are most effective when built on and by a community of members. For other sectors, other models work best: donors for philanthropic organizations, subscribers for publications, customers for retail stores. If membership weren’t the best option for associations, we’d see a lot more of them prioritizing different models by now.

But that’s not what Engel asked. Not why is membership best, but why is it the only relationship? While I think the answer is simple—again, we’re afraid of what might happen to membership if we focus on other relationships—I agree that associations ought to resist the urge to push anyone and everyone into the same funnel. Membership might be the best relationship for most of an association’s stakeholders, but it’s not the best for all of them.

An interesting data point in ASAE’s benchmarking research  (opens in a new tab) and Marketing General Inc.’s Membership Marketing Benchmarking Report  (opens in a new tab) is the percentage of an association’s total revenue coming from membership dues. The most recent data from each shows:

• Median of 34 percent of revenue derived from dues (ASAE, 2012)
• Average of 43 percent of revenue derived from dues (MGI, 2013)

It would be valuable to also know (though neither report offers it) the percentage of total revenue derived from members in any way, not just dues. In other words, of the other 60 percent or so of an association’s revenue, how much of it comes from people who are already members paying additional money for meetings, education, and other products, and how much comes from people who aren’t members? That data point would be a fascinating look at how an association is balancing membership with its other various relationships.

But here’s the question I don’t know the answer to: Where exactly should that balance between membership and other relationships fall? Let’s say you could fill in that second data point I mentioned and you found that 35 percent of your revenue comes from dues, 35 percent comes from members buying other things, and 30 percent comes from nonmembers. Is that good or bad? Is this a good scenario because the average revenue per member is twice the amount of dues? Or is it bad because the association relies on members for 70 percent of its revenue? I honestly have no idea (which is why I suppose some benchmarking here would be good—hint, hint, ASAE and MGI). And how far can that portion of member-driven revenue be reduced? If only, say, 20 percent of your revenue comes from members, are you still an association?

Toward the end of her post, Engel suggests associations should figure out how to formalize other relationships and learn to meet other types of audiences where they are. To do that, given our fear of the unknown, I think we need to find a way to make those other relationships more comfortable and less scary. One way to get there might be through data. The better associations can collect and analyze data on their nonmember audiences and how they prefer to engage, the better they can know what to expect from them, and the better they can know which nonmembers just want to be customers or attendees or sponsors and which ones actually are good candidates for continuing down the funnel toward membership. And, ideally, the less they will have to fear.

How does your association feel about engaging nonmembers? What’s the balance between member-driven revenue and nonmember revenue at your association? And where do you think it ought to be? Please share in the comments.

(photo by Cryptowolfe/Flickr)