What a Customer-Driven Association Might Look Like
A recent report from a nonprofit software maker suggests that associations are going to become increasingly customer-driven, not just member-driven. Does the road to increased revenue run through technology offerings? Here's a hypothetical to get your brain moving.
The association world may be driven by membership, but in 2015, it may be time to start thinking in terms of customers—particularly those driven by online offerings.
Earlier this month, the association and nonprofit software provider Abila—a company that, notably, acquired Avectra in 2013—put out a set of recommendations on what it saw as the next steps for the association space in the year to come. Perhaps the most interesting one? The idea of expanding the conversation beyond member engagement to customer engagement.
“Associations will continue to focus on engagement, but we will see a shift to focusing on both customers and members,” the company’s trend report stated. “Customer retention will become more important than member retention.”
The reason customers are becoming so important to the world of nonprofits is simple: Alternative revenue streams matter more and more. We’re quickly diving into a realm where our biggest competitors may not be other associations, but rather free education offerings that put pressure on associations to step up their game.
“This is really an exciting time for associations,” Abila netFORUM Enterprise Senior Project Manager Darryl Hopkins said in the news release. “The organizations that begin to fully comprehend the demographic shift in our country, understand the power and reach of the internet, and embrace the evolution of technology at our disposal will position themselves for success in meaningful and verifiable ways.”
It’s sort of funny to think that, after a year in which many for-profit companies tried to become more like associations by focusing heavily on membership offerings (and we looked on in fascination at their approach), we have an industry voice putting customers on the same plane as members. It’s an interesting turn of events.
But then again, really, is it? We’re in a different world now—one where you can start up a company that sells glitter bombs, make it a huge success in a matter of hours, and decide you want to sell the company, all in a few days.
In other words, the barrier to entry in starting up a new commercial enterprise is lower than ever, thanks to the internet. What if more associations leveraged this opportunity to build business-style solutions for the industries they serve—beyond mere education and events, and into pure services?
It’d be an interesting future, I think. (And one the Abila report suggests might be possible, considering that it cites the growth of cloud services as a major trend.) Read on for an example of a nonprofit model I think puts many of the elements of this kind of thinking into action.
One for All, All for One
The most interesting thing I ran into last week was a nonprofit project put together by the world of public media—PBS, NPR, PRI, and all the others.
Late last year, after a long period of work and some funding assistance from the Corporation for Public Broadcasting, the Public Media Platform (PMP) opened its digital distribution system for the first time.
Long story short, the project is a reimagining of what a wire service focused on publicly funded journalism alone might look like. It functions like a narrower version of the Associated Press, if the AP were designed at the outset with an application programming interface (API) and its bones were open-sourced and designed to work within modern web standards. (In one case, even, PMP created its own standard for distributing structured content online.)
“This is the biggest innovation for public media and its audience since the satellite distribution system launched in the late ’70s. The PMP revolutionizes how stations and producers collaborate, reach new audiences, and take advantage of new revenue opportunities,” PMP Executive Director Kristin Calhoun said when the system launched in November.
In other words, they took hundreds of completely disconnected libraries of content and put them into one interconnected piece. That is a starting point for opportunity. Organizations would generally pay money for this kind of thing—but instead, member stations are getting it for free.
Clearly the approach is succeeding—more than 100,000 items currently sit in its archives. It’s an impressive example of what can be done when everyone in the industry is on the same page.
From Member to Customer
If PMP had been built for the private sector, it might have been conceived as a for-profit startup rather than a nonprofit firm. (In fact, I can think of a startup that once tried something like this.) And its open-source, industry-collective nature likely means that PMP isn’t looking to make bank off its member stations.
But what if a product along these lines was built for the private sector, but it remained nonprofit under an association’s wing? Maybe you’d keep the open-source nature of the system, but that would still leave things you could charge for.
There’s low-hanging fruit, of course: You could sell a book explaining how to use the system in layman’s terms, and maybe make training sessions part of your education offerings. But there are other directions this could go, too. Let’s say, for example, one of your members doesn’t have the technical know-how to plug into an industry-wide tech offering and needed some help. You could potentially charge for consulting knowledge, knowing that this could prove a fruitful revenue source for your organization.
By building something everyone wants to use, there’s a chance your organization could win over customers that perhaps were never interested in joining your organization but need the benefits your technology offerings could give them.
And suddenly, members aren’t just members but customers too. The nature of the relationship might change, but it helps diversify the offerings under your umbrella. And, if you’re in the right place, diversification can be a huge help to the bottom line.
Perhaps it’s a weird line of thinking, but on the plus side, at least it’s not as messy as opening a letter filled with glitter. And hey, there were a million bad ideas before someone landed on something as brilliant as Ship Your Enemies Glitter.