Association memberships provide numerous benefits to individuals and companies alike, offering valuable networking opportunities, industry insights, and professional development resources. However, the issue of whether to discount association membership dues poses pitfalls to both the associations and their members. In this blog post, we will explore the potential risks of discounting membership dues, suggest strategies for restructuring association dues, and shed light on the issues of companies not paying at the correct dues level.
The Risks of Discounting Association Membership Dues
Discounting membership dues may seem enticing, particularly as a short-term strategy to attract new members or retain existing ones. However, it can lead to various pitfalls, including:
a) Financial Strain on Associations:
Offering steep discounts or waiving membership fees altogether can strain the financial resources of any association, hindering their ability to deliver quality programs, services, and advocacy for their members.
b) Diminished Perceived Value:
When membership dues are significantly discounted, the perceived value of the association’s offerings may diminish. This could lead to a decline in member engagement, as individuals may question the quality of their investment.
c) Inequity Among Members:
Discounting membership dues without clear criteria can create inequity among members. Those paying full dues may feel undervalued, having not received the discount, while those benefiting from a discount may not fully appreciate the true value of their membership.
Restructuring Association Membership Dues
To circumvent the risks of discounting membership dues, associations can consider implementing the following strategies:
a) Tiered Membership Levels:
Introduce tiered membership levels that offer varying benefits and corresponding dues. This approach allows members to choose the level that aligns with their needs and financial capacity, ensuring a fair and sustainable pricing structure.
b) Value-Based Pricing:
Shift the focus from arbitrary discounts to value-based pricing. Instead of lowering dues across the board, associations should communicate the unique value proposition of their offerings and adjust the pricing accordingly. This approach highlights the benefits and justifies the cost, fostering a sense of worth among members.
c) Discounted Offerings:
Rather than discounting membership dues directly, associations can offer exclusive discounts on specific programs, events, or products within their portfolio. This approach preserves the value of membership while providing tangible incentives for members to engage further.
Ensure the Correct Dues Levels
Associations often face challenges when they realize members aren’t paying at the correct dues level. This can happen when members have inherited legacy pricing, when dues haven’t changed in many years, or because they paid at a discount. To mitigate this issue, associations can employ the following strategies:
a) Have a Clear Membership Criteria:
Establish clear guidelines and criteria for determining the appropriate dues level based on factors such as company size, revenue, or industry segment. You should communicate these tiers to ensure that members accurately assess and pay the dues commensurate with their resources and benefits received.
b) Regular Auditing and Communication:
Conduct regular audits to ensure companies pay the correct dues level. Maintain open lines of communication to convey the value of their membership and the importance of adhering to the proper payment structure.
c) Enforce Dues Compliance:
Develop a system for enforcing dues compliance, which may include penalties for members who consistently fail to pay the correct dues level. This encourages accountability and fairness within the association.
Discounting association membership dues can have significant consequences, affecting the financial health of associations and the perceived value of membership. By restructuring membership dues through tiered levels and value-based pricing, associations can strike a balance between affordability and sustainability.
Additionally, addressing the issue of companies not paying the correct dues level requires clear criteria, regular auditing, and effective enforcement mechanisms. By navigating these potential problems and implementing appropriate strategies, associations can ensure the long-term success of their memberships while providing maximum value to their members.
For help or questions about your membership dues, or if you would like to receive a dues audit, contact us!