Hey folks, if we’re learning anything about associations right now it’s the importance of their ability to adapt and to adjust and to pivot.
Here’s the framework.
We have associations that have had the luxury, and built a business over time, that have about 90% of all of their members renewing. We’ve got a strong business model that’s diversified. If you look at the average association, 45-50% of the revenue is coming from membership dues and 25-30% is coming from meetings and events. The remainder comes from sponsorships, education programs, certifications, publications, and things like that.
Now, we’ve got incredible disruption.
The coronavirus has affected our meetings platform. Organizations are delaying or canceling events, our registration is suffering. When 40%, and some of our clients that we know have up to 80%, of their revenue coming from meetings and events. We have mergers and acquisitions. There is consolidation of some of membership categories. Large companies are buying each other. I read today where PepsiCo is buying Rockstar Energy Drink, as an example. It’s happening across all of our industries. And then you have public announcements from large companies evaluating their memberships in multiple trade associations. Often, they are the largest dues payer, and probably participant in meetings and events, of their associations. BP recently put out a memo about the 22 associations that they are part of, the three that they’re going to leave, and the five that they’re putting on notice. All of that is happening and it reinforces the need for us to pivot, adapt, be fast and not rely on our past performance, or our legacy programs, to get us to the future.
Here are some thoughts on how to navigate that.
One. Think about program and content delivery in a non-event format. Develop non-event sponsorship inventory for your suppliers so they can continue to do business with your core members. It may be old school but magazines, newsletters, webinars, and other efforts might be the sponsorship inventory that you either want to develop or put an emphasis on.
Two. Membership evaluation. Look at your whole membership program. Are the dues levels correct? Can you accommodate when mergers and acquisitions that occur? Are there new entrants into the industry that can’t join because of the way your bylaw describes membership now? Do you need to loosen that up? Do you need to add new categories?
Three. Segment your value proposition. I believe that associations that are going to be successful, because of large company evaluation of their association dues and their participation, is going to really put a priority upon those associations to figure out and segment the value proposition and the ability to recruit small- and medium-sized businesses. I was on a call yesterday with a big association that has a lot of large company members and they are focused in developing specific benefits and services for the small businesses because that’s where the growth might be, that’s where organizations might win.
Adapt, pivot, adjust. If there’s anything that we’re learning right now is the ability to do that is going to be key for your association success.
Thanks for watching!