Report: Revenue Strategy Lacking at Many Associations
A recent survey from Professionals for Association Revenue finds that many groups are falling short of budget goals.
Substantial proportions of associations are struggling to meet revenue targets, according to a new survey, and lack the budget strategy infrastructure that might improve their fortunes.
The Association Business Development Landscape Report, released last month by Professionals for Association Revenue (PAR), reports that less than half of association executives said they will meet their budget targets for membership (48 percent) and nondues meeting sponsorship (48 percent). Even fewer said they’ll meet targets for attendee registration (41 percent) and exhibits (39 percent). The report was based on a survey of 100 association executives conducted over 18 months.
The largest proportion of respondents said the chief barrier to revenue growth is staffing and resources (33 percent). But another culprit may be associations’ business-development strategies—or lack of them. Only 12 percent of respondents said they have one that works, and 55 percent said their current plan needs improvement. In addition, only 53 percent of associations say they have a dedicated budget for sales.
“Historically, associations have prioritized the performance and effectiveness of membership, education, events, and industry research programs,” the report said. “Business-development competencies have largely been overlooked as an opportunity to improve the association enterprise.”
Sean Soth, PAR leadership advisory board chair, said many associations take a siloed approach to revenue generation, which can be a roadblock to growth. “A lot of associations might say, ‘We do all that independently: Membership has a goal, education has a goal, publishing has a goal,’” he said. “But how do these goals fit together? That’s why in the survey you see that 86 percent of respondents believe their business-development strategy is underperforming or nonexistent. They don’t have a complete understanding of what a shared objective might be for their organizations.”
The report suggests that better data-gathering can help associations improve their revenue strategy. According to the survey, 70 percent of associations are using a customer relationship management (CRM) system. However, among those using a CRM, only 35 percent of associations are tracking financial performance versus the budget, and only 27 percent are tracking sales activities such as calls, emails, and meetings.
“A first step would be understanding how your metrics look, and what success looks like,” Soth said. “If we’re not making our membership number, why is that? Are we missing out on renewals? Are we not focused on new member growth? What part of our business do we need to understand a little bit more deeply?”
Associations have found new revenue streams despite these issues: The PAR report noted that since the onset of the COVID-19 pandemic, associations have launched webinars, online courses, virtual meetings, and other digital products and services. However, only 16 percent of respondents said they had those tools in place before the pandemic, suggesting that few have been proactively pursuing opportunities for new revenue.
“We’re seeing an interesting intersection here, where the commercial and business side of the association needs to better align with mission and the competencies and the team to do it,” Soth said. “Those things are just starting to change.”