Updated By: Jannan Poppen
When fifty percent or more of your association’s revenue comes from membership dues, optimizing your dues structure and member categories is crucial. More than simply a dues review, an optimization is actually more like a business analysis. Based on the dozens of these projects that we’ve done, we’re going to share three steps that you can take to modernize your dues model.
1. Quantitative Review
A quantitative review of your membership data will cover three areas: renewal rates by membership category, your non-renewals revenue, or non-dues revenue, and a review of the impact of events and programs on your organization.
To begin, look at the distribution of renewals by member company so you can see how many small members are renewing compared to the largest organizations’ renewals. Determine the percentages of revenue renewals in these two categories as compared to the overall membership revenue that comes into your organization.
Next, look at non-dues revenue participation to see the total business involvement in your association. This is really important with your associates or your allied members. While they may not be paying a lot of dues, for example, they may be investing a lot of money into your sponsorship program and as a result, they’re putting more money into the organization than the core members. You may find that your associates are contributing significantly to your non-dues revenue.
Lastly, look at other programs and participation. What is the percentage of people showing up to meetings and events? How many folks are participating in committees? Don’t forget to do the same thing with allied members. What you’ll start to see is a real opportunity to adjust the membership model so it will deliver more value and get better participation.
2. Qualitative Review
Second, interview members in different membership categories. What do they value the most from the association? This may be very different from what you’ve written in your membership brochure or the membership section of your website. What do they tell you they value the most? What are the specific stories about that value? When you look at the major parts of your value proposition, are there benefits that these members don’t use or don’t even mention?
Also ask what other associations these companies, or individuals, participate in? What do they value from those organizations? What do they get out of it? For example, they may be joining your organization for advocacy and they may join another group for business development purposes. Learn a little bit about how you fit in their ecosystem and how they decide which groups to be a part of. Does it differ by the individual executive? Maybe by product line? Or, is it more of a holistic, company-wide strategy? Ask them if they think the value is fair and if they feel they are getting a good deal for their membership investment.
3. Competitive Review
The third part of the process is to complete a review of other associations. These are associations that your members may also be a part of that you might be competing with in some way, shape, or form. Find out how their dues calculations work. What are the top three benefits of their value proposition? Are you competing with them in those areas? Are they taking on some issues while you’re focused on other things? Is it a blue ocean or is it a competitive environment?
In your qualitative review, you found out how your members view your organization compared to others. In your competitive review, opportunities to create new tiers with marketing opportunities throughout the membership lifecycle may show themselves.
When you do these three things: quantitative, qualitative, and competitive analysis, you’re going to find opportunities to address issues that may come up. For example, you might find your top-end rate cap needs to be taken off because the big companies are all hitting the maximum and they have been doing so for a very long time while their businesses are growing. They might be growing due to your effectiveness in the marketplace in terms of opening markets or advocating for them by representing them on Capitol Hill.
The Bigger Picture
It’s essential to determine how members view your association and whether they think they are getting a fair deal. If members don’t feel like they’re getting a lot of value, or they think that they’re paying more than their fair share, you need to reevaluate. It can be difficult to determine is whether members of your association are actually buying into your value. In some cases, large members may be paying the maximum dues rate but they don’t think they’re getting that much value from you. It’s better to know that before you walk into a board meeting to introduce a revised membership structure.
Through this process, you’ll uncover many valuable insights. Use those insights to modernize, adapt, and stay relevant in your industry. Adapt the business model in a way that makes you increasingly valuable to your members. Develop a dues model that is modernized and reflective of the value you provide, because value drives engagement and growth.
Need help getting started? Reach out and would be happy to help you get started on your journey in modernizing your dues.