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Organizational Strategy

Reinventing Association Business Models

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COVID-19 blew up the traditional association business model that relied heavily on revenue from in-person events and sponsorships to fund the mission. Organizations are taking what they learned over the past year to create new, more crisis-resistant revenue streams.

Just about every association took the necessary step of shutting down in-person meetings when COVID-19 flared up last spring and then hustled to convert those events to virtual formats. Moreover, many associations offered access to their virtual meetings for free or at a deep discount. It was important to preserve member goodwill, the thinking went, until things got back to normal.

The National Society for Histotechnology, however, had already been preparing for an all-digital future based on a different way of thinking about the association’s value. NSH Executive Director Sharon H. Kneebone, CAE, says the organization came to recognize that its business model needed to connect with a larger proportion of members—and that meant framing a digital conference as an improvement, not a concession.

“The key trend that was driving our decisions is the fact that most of our members will never have the opportunity to go to an in-person meeting,” she says. “In terms of strategy, we had decided we need to be looking at our digital footprint and how we are going to deliver education and value that way.”

To that end, NSH cut exhibitor fees for its 2020 conference but did not discount fees for attendee registration, preparing its members for a hybrid conference in 2021. The backlash many associations feared if they held the line on price didn’t emerge.

“We had the same percentages for live meetings as for virtual, in terms of perceived value,” Kneebone says. That, on top of a new dues structure that emphasizes better access to more online education in addition to the usual discounts, will help reframe NSH as a digital-first association, she says.

“The key trend that was driving our decisions is the fact that most of our members will never have the opportunity to go to an in-person meeting. In terms of strategy, we had decided we need to be looking at our digital footprint and how we are going to deliver education and value that way.”—Sharon H. Kneebone, CAE, National Society for Histotechnology

Problem-Solving Innovation

But retooling the business model isn’t just about a hard shift to digital. COVID-19 ought to accelerate associations’ capacity to innovate in other areas, says Barry J. Barresi, a former healthcare association executive and CEO of the consultancy Association Ventures.

“COVID-19 exposed racial health disparities with a crisis of preventable illness, death, and economic stress,” he says. “While many associations have advocated for social initiatives, programmatic solutions are lacking.”

Barresi says associations in any sector can innovate by starting to think beyond familiar nondues revenue sources like events and sponsorships. One option is to look at ways to leverage the data associations capture about their industry and parlay it into a business that serves multiple stakeholders, rather than just another publication or webinar. At the American Optometric Association, for instance, Barresi helped develop a platform that connected three disparate groups and provided them with essential healthcare coordination data.

Sorting out what that innovation will look like may require some difficult internal conversations about tolerance for change and clear thinking about what services stakeholders need, Barresi says. But the upside is establishing revenue drivers that serve an association’s industry but are less likely to be buffeted by the recession and loss of revenue in the events space.

“The innovation is really mission-based: You see a problem within your sphere of influence,” he says. “But rather than think, ‘Oh, let’s put up a conference or an education program,’ instead you decide to go directly into that space and build a sustainable solution.”

Mark Athitakis

Mark Athitakis, a contributing editor for Associations Now, has written on nonprofits, the arts, and leadership for a variety of publications. He is a coauthor of The Dumbest Moments in Business History and hopes you never qualify for the sequel.

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