One topic I get asked about all the time is membership dues. Common questions include what’s the right amount to charge members, what should be the minimum, should there be a cap, tiers, etc. The trivial part to membership dues is that there is no easy answer to this question, but I will share some thoughts with you on some best practices I’ve picked up on in my 20+ years of association experience.
Don’t Cap Your Dues
Do not have a cap on your dues. It is tough for an association to change their dues model and get approval from their board, so don’t handcuff future leaders of your association with a dues cap. Too often, I hear stories of two large members of the association merging, and the result is 1+1=1 in terms of net dues for the association.
For example, both members are in the maximum dues category, and when they merge, the association loses revenue due to the merger. Often these large organizations aren’t happy with this either because they lose a board seat as a result of the merger.
Make Dues Comprehendible
Make your dues formula very easy for members and prospects to understand how much their dues will be. Don’t make this a complicated math exercise. The more variables you throw at them like certain product sales, number of employees, what percentage of membership sales are in North America, etc., the more likely they will be turned off by this process and less likely to join.
Figure out one metric you want to use and stick with it. For example, if your dues equate to .04% of your sales revenue, $500,000,000 in North American sales equals $20,000 in annual dues.
How to Handle Dues Increases
Don’t panic that your member retention will decrease and that members will leave in mass numbers after a dues increase. Membership retention rates are virtually unaffected after a dues change or increase. Companies are charging more for their products and understand that it costs more today to run an association than last year.
Don’t apologize for an increase. If you are doing good work as an association and are delivering membership value, then you are in a very defensible position for an increase. After all, members join because they resonate and find value with your association’s value proposition.
Often times existing members don’t even notice a slight increase and never even question it. If it’s a drastic change, a letter from your CEO stating the reasons for the changes will suffice. There still may be a handful that will complain, but it’s almost always a manageable number.
Bundle, Bundle, Bundle
Bundle things as much as you can. If your members are writing multiple checks a year to your association, then this is a great opportunity for you to bundle these additional services (events, continuing education, industry publications, etc.) into their membership. We have seen this feedback repeatedly in member dues surveys we have conducted. If given a choice, they would rather pay the full amount for an annual membership.
Know Your Members’ Value
Know the overall value of each of your members. It’s great their dues are $20,000 per year, but how much are they spending on events, education, sponsorships, etc., with your organization? This exercise can be eye-opening for an association when they see how much each member spends with them. It’s especially enlightening with some associate members who may have low dues but spend 10X with you in other areas.
If your association needs help evaluating your dues structure, we’d love to hear from you. Reach out to us for an opportunity to talk with one of our association experts.