Need More Non-Dues Revenue?
How often do hear comments like these around the office or at industry gatherings? “Younger people aren’t joiners.” Or “Members want everything so customized these days, I’ve got 10,000 packages for 10,000 members.” Or “We need to show ‘em ROI on every single benefit these days.” Or how about, “They want what they want when they want it exactly in the format they want it.”
If so, you’re not alone. Dues-based organizations of all shapes and sizes are wrestling with ways to stay relevant and competitive in a world where potential members put you through the wringer before they’ll commit to joining (and staying onboard).
As my colleague Bob Burris is fond of saying, “It’s a different brand of ball being played out there,” whether you’re recruiting or retaining members, selling advertising, sponsorships and exhibit space, or building out your professional education programs.
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Tino Mantella, who has guided the Technology Association of Georgia (TAG) to a seven-fold increase in revenue and a 500-percent boost in membership since taking the helm in 2004 observed that “the more you can run like a business, the more you can impact the not-for-profit world.”
Tom Hood, CEO of the influential Maryland Association of CPAs (MACPA) said his organization has adopted the formula of L > C. What that means is in a period of rapid change and increasing complexity, the winners are individuals and organizations whose RATE OF LEARNING is greater than the RATE OF CHANGE he said. Hood is fond of using the expression, “you can’t stop the ocean, but you can learn to surf the waves.” And perhaps that’s why MACPA has a following that’s exponentially larger than its 10,000-person membership base.
Moving forward
While no one can predict the future, it’s clear that dues can’t be expected to sustain membership organizations on their own. A new report by Veris Consulting and Brittenford Systems identified five primary growth challenges cited by association CEOs:
- Rethinking revenue model and income generation
- Improving program results and metrics as a priority
- Improving revenue consistency and forecasting
- Generating non-dues revenue, and expanding fundraising
- Implementing a transformational strategic plan
Notice how four out of the big five growth challenges are related to revenue?
As recent Association Adviser polls show, non-dues revenue (NDR) accounts for at least 25 percent of total revenue at the vast majority of associations (86 percent) and for more than half of revenue at 22 percent of associations.
Drilling into the results above we find that one third of readers say increasing advertising, sponsorship and affinity partnerships is their highest NDR priority today. One in six readers (16 percent) say increasing live event revenue is their top revenue priority in 2013 and 26 percent of readers say increasing revenue from mobile apps, webinars or virtual events is their top priority.
Live Events
Bob Alexander, president elect of the National Association of Estate Planners & Councils said he’s not surprised that associations still place a high priority on live events in this digital age. “It’s all about building personal relationships and cross-marketing our networks and expertise,” he said. “That’s how we all make a living.”
TAG’s Mantella agreed about the need for face-to-face interaction: “Even young people still have a strong need to get out from their desks and see people in person.”
According to Alexander, event sponsors expect more personalized interaction as well. Just giving them a booth to collect business cards isn’t going to get it done anymore. You need to offer them greater visibility and interaction with attendees. “They need a forum for sharing need-to-know information with their industry peers—in a non-salesy way—that will ultimately drive attendees to their booth,” Alexander added.
According to Mantella, the 19,000-member TAG produces about 200 events a year for 32 industry special interest groups. Rather than being all things to all tech people, TAG tries to build sponsorships around specific educational events that focus on industry hot-topics such as automotive technology, cloud computing and defending cyber-attacks. Mantella said there are plenty of company members in each category interested in getting behind these niche events as well as sponsoring roundtables with influential chief information officers.
In another twist, each of TAG’s 25 full-time employees is responsible for developing educational event ideas. And the organization will soon be adding a full-time sponsorship account manager to oversee all of its relationships.
Online advertising
“Electronic or digital advertising is strong, but new opportunities are via mobile apps, websites, conference apps and digital publications,” said Angela Kisskeys, marketing and communication managers for the Midwest Society of Association Executives (MSAE).
While some say online banner ads are passé, it’s simply Marketing 101 according to Marcus Underwood, Naylor LLC’s vice president of online solutions. “Customers must be exposed to an offer multiple times before they become interested enough to engage in the offer. Consumers subconsciously block out some advertisements, but they are still subliminally aware of them. After repeated exposure, they become more comfortable with the offer or company, and are open to a buying proposition.” In other words, banner displays still work when executed well.
A closer look at sponsorships
“We are seeing more year-long sponsorships and partnerships” in which sponsors can maximize their time in front of a key audience, said MSAE’s Kisskeys. “A logo on a sign isn’t the same as it once was,” she said.
MACPA’s Tom Hood agreed. The days of taking people’s money just for giving them an exhibit booth or “slapping their logo” on your website or conference brochure are long gone.
Sponsorship guru Bob Burris points out that it is the association’s responsibility to understand the sponsor’s goals and help them “activate” the program in order to reach the right members in the right stage of their purchasing cycle. Otherwise you’ll be in the “no-thanks” pile next year, no matter how influential your organization is within your industry.
Charles Popper, Naylor’s vice president of association relations notes that savvier associations come to sponsor meetings armed with case studies of successful programs they’ve done with sponsors in the past—and they remember to follow up regularly with sponsors, not just when you need a contract signed. Unfortunately, our research shows that only a very small number of associations have systemic programs to check in regularly with their advertisers and sponsors. “Shocking, but unfortunately true,” laments Popper. “They’re not asking the folks who pay the bills.”
Webinars, virtual events and video
Many associations are now producing their own video content to drive traffic to their websites, to keep members engaged, and more recently to attract sponsorship dollars. Early success stories of web TV are being reported at the Material Handling Equipment Distributors Association, ASQ and the Western Retail Lumber Association, to name a few.
As part of a premiere corporate membership package, TAG conducts podcast-style interviews with top execs at its member companies. It’s great content for TAG members and corporate partners like the fact that they can use TAG podcasts for their own marketing and branding purposes, explained Mantella.
Like all CPAs, MACPA members need on average 40 hours a year of continuing education credit. Watching MACPA webcasts about important accounting, finance and professional development topics are a popular way for members to get their credit hours. Thanks to the large audience size these programs typically attract, MACPA webcasts are often sponsored by leading industry vendors and service providers.
Social Media
While adoption of social media has been robust across the association landscape—86 percent of associations are on board according to our latest industry benchmarking study–monetization of those platforms has been more challenging. Now that TAG’s 32 SIGs each has a dedicated social media manager, revenue should be on the horizon, hinted Mantella.
Attention is what garners the revenue on social platforms according to Hood. MACPA, which has been a social media pioneer since 2006, attracts about 400 live attendees to its annual conference, and an additional 200,000 follow the tweet stream from the event. “That kind of reach gets a sponsor’s attention,” chuckled Hood.
NDR gone too far?
While some worry that associations may push the NDR needle too far, Naylor’s Underwood said advertising and sponsorship should be seen as a member benefit, not as a nuisance. It can help members with trusted partners and save them lots of time when vetting potential vendors. “NDR needs to support your overall strategy and mission,” said Hood. “It’s not just about the money. If you lose sight of your mission, strategy and purpose and how it affects members, than an NDR offering can have a negative overall impact on you.”
Conclusion
As Naylor CEO Alex DeBarr notes in today’s issue, “a whole new generation of middle and upper managers exists at companies in every vertical market you serve.” Their information needs, preferences and customer outreach objectives are often very different from their predecessors’. You need to be highly cognizant of that, he added.
OK. So they want what they want when they want it how they want it. Don’t question it; start dealing with it. And as long as you keep your L ahead of your C, you’ll find smart (and profitable) ways to surf the wave of change that keeps members and associates loyal to your organization.
Hank Berkowitz is the moderator-in-chief of Association Adviser eNews.
