Organizations facing budget shortfalls after coronavirus closures and cancellations are looking for ways to increase nondues revenue. Experts suggest going back to basic economics: Find out what members and sponsors need and supply it.
The swift and devastating impacts of the coronavirus are being keenly felt by the association community, and many are looking for ways to generate revenue in a stalled economic environment. At a recent Association Insights event held by Marketing General Incorporated, two experts said that while this situation is new, tried and true techniques will still work to drive revenue.
“We were doing just great and then COVID-19 hit. Everything changed,” said David Schulman, president of Associations Rewired. “A lot of us panicked and are trying to figure out what are we going to do now.”
Schulman does not recommend panicking as a solution. Instead, he said, use some basic truths to guide your revenue-generating ideas. “Your members are you customers; your sponsors are your customers; all your stakeholders are your customers,” he said. “Treat them that way.”
With that in mind, the best way to determine what will drive revenue for your specific association is by talking to customers to see what they need right now. If their needs have changed, they won’t spend money on the same solutions they used to. He recommends calling a few members you have good relationships with.
“Start the conversation with, ‘I need your advice,’” Schulman said. “That is so powerful, it’s honest, and it’s telling them, ‘I am looking to you for your help.’ Who doesn’t love giving advice?”
Schulman said to avoid asking open-ended questions about what they need. Instead, he suggests formulating a hypothesis of what they need and asking them if it’s right. He offered the example of an association that believed its members valued the certification program because it helped differentiate them from competitors. Upon talking to members, they learned that wasn’t the case.
“[Members] said, ‘My real problem is, I need leads; either everyone has the certification, or it’s not required in the state,’” Schulman said. So, the organization looked for a way to provide lead-generation opportunities. “They turned around and monetized their membership directory so members could get more leads, and that started turning things around.”
How’d they do it? The organization’s members were listed in a directory that potential customers would search online. “Featured” listings—which companies paid more for—boosted their results to the top of the page, generating half a million dollars in revenue to the association and providing leads for those members. The association integrated the leads into their member information system, and at renewal time, they could tell each member how many leads had been generated by the site during the previous year.
“If the things you are doing are something they don’t care about, it is not monetizable,” Schulman said. “You have to keep asking them why to get to the root of what’s really important to them about this buying decision.”
The same holds true for your other revenue-generating customers: sponsors. “With sponsorship, we need to start asking questions,” said Lewis Flax, principal of Flax Associates. “We often jump to a conclusion. If they say they’re interested, we’re often pitching a specific activity.”
It’s better to understand why a sponsor wants to be involved with your association and come up with a tailored plan. “Once we understand the why, we can design a program in line with their needs,” Flax said. “If you don’t understand the problem and the payout, it’s much more difficult to create the solution.”
While many sponsors are hurting just as much as associations are right now, that doesn’t mean you should write them off, Flax said. “Talk to them about how they are going to be positioned for success today, three months, and six months down the line,” he said. “When they are thinking about how they envision their company in the next three to six months, we want to be a part of their solution.”
The key message: Listen well to all your customers and think creatively after you’ve heard their problems.
“This is the time for bold moves,” Schulman said. “You can’t sit on your hands and wait for [the crisis environment] to change and get back to the meetings that provided a third of your revenue.”
How has your association sought to generate revenue during the pandemic? Share in the comments.