A better measure for intangible benefits.
Imagine you’re at an art fair. One piece catches your eye, and you envision it on the wall above your fireplace. It may have a price tag, but there isn’t any way to compare the price or determine its tangible value. It is an original, and you haven’t seen anything like it before. The value of the artwork is what you are willing to pay for it.
This scenario is useful in understanding how a prospect might value the benefits of your association’s membership package. Willingness to pay (WTP) is the total amount people would pay to obtain something they want or avoid something undesirable, based on their perception of value and their financial ability. This method is sometimes used for things that can’t be valued in any other way, such as intangible benefits.
Determining WTP is simply a matter of asking, whether through focus groups or surveys. Ask about the value of specific benefits rather than membership as a whole, but also gather information on attitudes and motivations. A “conjoint analysis” can measure how people value different benefits and also what is most influential in their decision to join, register, or make a purchase. For example, ask a member or prospect, “Which is more important to you: (1) educational webinars or (2) local networking events?” Then, follow up to ask, “Would you be willing to pay $X for the option you chose?” Asking about specific price points will typically be more revealing than asking the open-ended “How much would you pay?”
Associations often hear “I can’t afford it” from non-, lapsed, or even current members. Such a response usually means “I am not willing to pay” based on the combination of price and perceived value. And those are both factors you can work to change.