Focus on Lowering Expenses Rather Than Raising Membership Dues
Keeping members and finding ways to lower expenses is more important than raising membership dues right now, according to an expert. Here are some ideas to consider.
Raising membership dues is often a tricky proposition, as I covered in a recent blog post. And that’s during a normal year. The past year, as we all know, has been anything but normal—and the financial hardships have made the proposition even more difficult. Added to that, what happens when your dues structure is directly tied to a percentage of your organizational members’ budgets during a year when the pandemic shut down most, if not all, of their regular in-person business?
Organizations often look for short-term solutions in situations like this, said Sheri Jacobs, FASAE, CAE, president and CEO of Avenue M Group. While a long-term strategy that usually works is to have small, incremental dues increases instead of implementing a large increase every 5 to 10 years, when faced with the current situation, associations tend to go back to familiar tactics and not think creatively, she said.
Now is a good time to assess what you don’t have to spend money on until things become more stable. Look at ways to lower expenses rather than ways to raise membership dues. “You can’t squeeze money out of people that doesn’t exist,” she said. Jacobs advises keeping the members you have and pausing any dues increases—even if it means tapping into reserves.
Driving Nondues Revenue
Data shows associations are becoming increasingly more innovative and looking at ways to drive nondues revenue. Marketing General Incorporated’s fall 2020 Association Economic Outlook Report and upcoming data from its 2021 Membership Marketing Benchmarking Report show signs that associations are not only looking for creative solutions by offering different kinds of products, services, and benefits but are also open to change. For example, in MGI’s 2020 economic report, only 22 percent of respondents said that barriers to change were due to institutional resistance to risk, compared to 31 percent the year before.
One potential new revenue generator to try could be a staff-run consulting service. Benchmarking information is also popular and could be a quick way to drive nondues revenue by collecting data and creating an online access portal. The information is useful for members and they would likely be willing to pay to access it, Jacobs said. “There’s never been a better time to test any idea, no matter how outrageous it is,” she said.
Another possibility is offering a tiered approach where a lower tier of member benefits is more affordable, and the current membership is the higher tier. The risk, however, is that everyone might move to the lower tier. To counter that, Jacobs recommends thinking through what the one key benefit is that you know from past performance will keep members in the higher tier. Organizations could also consider creating a lower-cost tier for younger members. Also keep in mind that younger generations like more flexibility with payments and so installment options might be preferable for them rather than annual dues payments.
Bottom line? “Keep your members and figure out other strategies to lower expenses, much as you would do with your own household budget,” Jacobs said.
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