What dues rates will maximize both revenue and participation?
That’s a good one!
This question actually came in from a client, and here’s what I told them:
The perils of pricing too high are obvious – no one will buy, because you’re too expensive. Pricing too low is equally bad, though, because people don’t value something that they feel is cheap.
The low-fi way to answer this is to benchmark against some comparable membership organizations, to see if what you’re offering (by way of benefits) and charging (by way of dues) is within, below, or above the general market. You never want to be the cheapest or most expensive option.
A mid-level effort approach would be to do a membership dues modeling project. This is like the above, only you deconstruct your benefits package first, price out the elements (both cost to deliver and also what comparable services cost elsewhere), mine your data to figure out which members are actually using which benefits, and recalculate what your benefits packages might include and what they might cost based on actual costs, perceived value, and actual use rate.
The most complicated answer is to do a full-on pricing study. Now that’s not a service I offer, but there are a number of good association consultants and vendors who do. (yep, I really told them that – and gave them some names)
One final note on dues: small annual dues increases are a much better idea than infrequent large increases. Members will not notice a 2-3% annual increase, particularly if you really do 2-3%, which quickly moves you off dues amounts that end in “0” or “5,” and that keeps you up with the rate of inflation without any price shocks. The alternate is to wait several years and do larger increases (10% or more), which are DEFINITELY noticed and can make people angry or lose you members.
Photo by Pepi Stojanovski on Unsplash