Tiers Put Power of Choice in Members’ Hands
In what looks like a continuing trend, another association plans to offer multiple tiers of benefits and dues and explains how both members and the association stand to gain.
There’s danger in proclaiming the existence of a trend based solely on anecdotes and not robust data, but I’m going to do it anyway: Tiered memberships are so hot right now.
Specifically, tiers that allow members to choose their level of benefits and dues, rather than those being assigned based on revenue, staff size, career level, and so on. Just a few weeks ago we revisited the successes of AIGA and the American Alliance of Museums, which both introduced multi-tiered membership structures in 2012. Also, last month the Assisted Living Federation of America announced a new Gold/Silver/Bronze tiered dues structure. And just this weekend, the Professional Beauty Association (PBA) unveiled its plans for a new membership structure that offers multiple options for dues and benefit levels for both individual and business members.
Meanwhile, Sheri Jacobs, FASAE, CAE, has championed the method of matching offers to what individual members value in her book The Art of Membership, and Tony Rossell has been beating this drum for a few years now over on his blog. A quick search in ASAE’s Collaborate forum shows great interest in tiered membership, as well: see here, here, here, here, here, and here.
Data on associations with tiered membership structures is hard to come by, partly because finding a common definition can be tricky. Tiered membership is a step toward more customization for an association’s members, so by its nature a tiered structure at one association will look very different from a tiered structure at another. ASAE’s 2012 Benchmarking in Association Management: Membership and Components Policies and Procedures asked about the basis for varying membership levels but didn’t include “desired benefits” as an option. It asked about “a la carte membership” and found that just 4 percent of associations offered it.
Let Members Choose What They Value
If there is a common thread, I think it’s reflected in PBA’s explanation of its coming overhaul: “The changes give PBA members more control over their membership.” In other words, it puts greater choice in the members’ hands.
Elizabeth Fantetti, director of membership and association programs at PBA, says the association knew from membership studies in the past few years that its price points weren’t right for its members. Individual membership included tickets to events, which turned some prospects away and led others to join only in years they planned to attend events. Organizational memberships were based on gross sales, which were hard to verify. And trying to force members into specific categories was becoming increasingly difficult in an industry where the lines between manufacturers, distributors, schools, salons, and practitioners were blurring. “We really wanted to build a model that represented the industry better as it changed,” she says.
Beginning in October, PBA individual members will have two options, a free “e-membership” or a full paid membership for $50, reduced from $115 in the old structure, but now without free event tickets included. Student memberships will drop from $75 to $20. And business members will have five levels to choose from based on the number of employees they want to receive benefits, reduced from 11 levels based on revenue.
Fantetti says PBA hopes the new price points will better fit members’ budgets and boost retention. “I think we’ll be definitely more attractive, and we’ll regain a lot of the membership that we’ve lost over the years,” she says. “Also I think people will be more inclined to just say, ‘You know what, I can throw you 50 bucks to support your initiative.'”
PBA drives much of its revenue from education and tradeshows. “We’re lucky in that space, because we do have a lot of opportunity to grow the membership, but we don’t have to worry about them being our primary revenue source, so we can take a chance of bringing those price points down from $115 to $50,” Fantetti says. It also gives PBA reason to adopt a structure that potentially broadens its membership base, which it can then aim to better measure, understand, and market its other revenue drivers to. The free level for individuals and the specified “benefits recipients” levels for business members both can help PBA engage people it hadn’t been reaching before, Fantetti says.
Advocacy is also driving PBA’s overhaul. After a series of mergers over the past 10 years, PBA is now the largest association in the industry and is striving to show its influence to legislators. “We recognize strength in numbers, and so we really wanted to be able to build awareness of who PBA is, that we are the industry voice on Capitol Hill,” Fantetti says.
Perhaps secondary (or tertiary?) to these upsides, PBA also sees potential administrative efficiencies in the new membership structure. Dating back to the most recent merger in 2010, PBA had been managing a calendar-year dues cycle for organizational members and an anniversary cycle for individuals. The new model will put everyone on an anniversary cycle. The overhaul will also necessitate some technology improvements, which Fantetti is optimistic will enable PBA “to really make decisions analytically versus, ‘Well, we think that it’s this way.'”
More Tiers to Come?
A membership-structure overhaul that benefits both members and the association is, of course, the ideal solution. Time will tell if it works for both PBA and its market. I suspect that tiered structures like this are appealing because they strike a balance between giving members full control over their membership experience and keeping membership operations manageable for the association. Advances in member-data tracking and association management software platforms will likely continue to make tiered structures more feasible. If we continue to see more of this style of membership makeover arise in the future, I won’t be surprised.
Does your association have a tiered structure, or has it considered one? What are the benefits and challenges involved? Would an approach like PBA’s work for you? Please share in the comments.