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Dues Drivers

Are You Due for a New Dues Structure?

In this article:
Understanding member concerns, conducting appropriate research, and having a smart implementation plan will help associations design a new dues structure that benefits members and the bottom line.

There are many reasons why associations may choose to overhaul their member dues structure. For the Globalization and Localization Association, it came down to equity.

“We had a flat, one-price-for-all dues structure,” said Allison Ferch, GALA’s executive director. “We’re a trade association, so when a company joins, they get all the benefits for their members. One of our values is equity, and we felt that it wasn’t fair to put a huge [financial] burden on smaller companies.”

As it considered ways to reorganize its dues structure and pricing, GALA collected data from its annual member survey and conducted focus groups with members. The association also considered approaches based on benefits, region, headcount, and other factors.

In January 2023, GALA introduced a new dues model based on self-reported company or department revenues and divided into four tiers. Though only four months in, GALA has yielded 19 percent more dues revenue than if it hadn’t made any changes based on the total number of current members.

“It is not only ‘the ability to pay’ that influenced our approach but also money for value,” Ferch wrote on GALA’s website explaining the changes.

Redesigning your dues structure with a focus on members will not only deliver more value to them but also help improve an organization’s bottom line.

The Right Model

Although it can be complex for associations to calculate the actual cost of membership, doing so ensures that members pay the right amount of dues to support the association’s products and services and the benefits they receive.

“I think associations often choose a dues structure based on what they think members’ budget is, or based strictly on size of organization or category, but there’s so much revenue and member value you get from a thoughtful, member-focused approach,” said Cathi Hight, president of Hight Performance Group.

For example, GALA’s tiered structure has made membership more affordable for smaller companies. In the new structure, the cost of membership decreased for nearly 25 percent of GALA members. For just over a third, dues increased by 12 percent, while dues increased by a larger margin for close to 12 percent of members.

“We expect our tier one to grow,” Ferch said. “Those are members with a revenue/budget range under one million dollars. Our calculations show that even with a bit of extra attrition and conservative growth projections, we could still increase revenues by 7 percent the first year.”

Member Minded

Collecting member feedback like GALA did is a good starting point for any type of dues restructuring.

“It was very important for us to get input from member focus groups to see how the figures resonated with them,” Ferch said. “We wanted to show them we were listening.”

The feedback process also gives associations the chance to learn about what motivates members to engage and the types of benefits they value. During GALA’s focus groups, members were excited to contribute to discussions and brought ideas to the table, one of which was incorporated into the new dues structure.

“Our focus groups helped inform our decisions,” said Alicia Deadrick, GALA’s membership and engagement manager. “Members were excited that a restructuring could help bring in new members. The experience gave them a better understanding of why we made the changes we did.”

Having members on board with a new dues structure is invaluable for associations.

“Members can help generate ideas on how to bundle benefits,” Hight said. “This new model is ‘designed by members for members’ and those involved in the process become first adopters and champions for the change.”

Smart Rollout

Throughout the process, associations should set clear expectations, create a realistic timeline, and have a plan in place for implementing the new structure. According to Hight, these steps will give staff a solid roadmap to both execute the new structure and communicate changes to members.

To get ahead of questions and concerns and provide members with details about the new structure, Hight recommends creating a communication plan that includes an FAQ.  She also suggests contacting members who will see a dues increase. Having a conversation about the rationale behind the changes and the plan for moving forward will help these members get on board with the new structure.

To prepare members for upcoming changes, GALA introduced the dues restructure to members on its annual survey, sent an initial email that explained the new structure, and then sent reminder emails throughout 2022. GALA also created a webpage and a short video on the new dues structure to provide additional details on the development process, changes, and benefits.

“We were transparent about our process, which engendered trust and buy-in,” Ferch said. “In the end, our changes were reasonable, justifiable, and member-supported, which made all the difference.”

Hannah Carvalho

Hannah Carvalho is Senior Editor at Associations Now.

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