10 Things You Need to Know About Non-Dues Revenue, Part 1
Association execs offer frank insights about what’s working and not working in the NDR trenches. Do you have to choose between cool and cash flow?
- Remember, we’re in the association business, not the “monthly meeting-annual conference-have a dinner-solicit vendors business.”
- Every day that someone figures out how to do their job without you is a day you’ve lost a member and you might never get them back.
- It’s not enough just to visit accounts in person. You’ve got listen to their business objectives and understand where they are in their current buying cycle.
Millennials vs. Boomers? Cool vs. cash flow? Risk management vs. innovation? Just as there are more ways than ever for associations to communicate with members, it seems there are more ways than ever for associations to try to make the cash register ring. So with Boomers retiring and NextGen stepping up to fill their leadership spots, it’s tempting to assume that mobile, social, video and other next BIG THINGS will replace the non-dues revenue staples of annual conferences, print magazines, directories and member newsletters.
Not so fast.
Expert after expert we consulted with said the new tools and communications channels are more likely to be enhancing, rather than replacing, the legacy communication channels. It’s all about finding the right balance.
It’s really about finding that “equilibrium point,” according to Michael Hoehn, president of CMI, a consultancy serving associations and healthcare organizations. For the past eight years Hoehn said he’s heard dire predictions about annual meetings going away and that associations are going to be “eaten up” by social media. “There’s a place for in-person [events], there’s a place for digital and there’s a place for social media,” Hoehn added. He said the key is to keep proving value to your members. Keep helping them advance their careers and do their jobs better. “Every day that someone figures out how to do their job without you is the day you’ve lost them. Are you ever going to be able to get them back?”
Experts also cautioned about making generalizations about members based solely on their age. There are plenty of Boomers quite adept at social media and plenty of Millennials who read print and use the phone. Remember that as you try to help your content shapers and advertisers break through communications clutter—the No.1 association challenge for the third year in a row according to our annual association communication benchmarking report. Faxing has regained popularity for many organizations and so has the phone.
Like many association leaders, Frank Rudd, head of the Florida Society of Association Executives (FSAE) is not afraid to go “old school” and call members directly. “I’ve personally called 193 new members. You’ve got to try all channels. Sometimes there’s no answer and sometimes it’s a 20 minute conversation. Of course the 20-somethings won’t answer the phone, but they’ll text you back right away and say: ‘thanks for the call.’ The key is to make sure you’ve got a good message,” he said with a chuckle. With that in mind, we reached out to association thought leaders throughout North America to take their pulse on the delicate balance between dues and non-dues-revenue.
Here are the 10 Big NDR Questions to Ponder for 2015 and beyond:
1. Why don’t more associations ask advertisers/sponsors if they feel they’re getting their money’s worth? Our annual benchmarking study found only half (52.6%) bother to do so.
On an annual basis, do you interview or survey your advertisers/sponsors to determine if they feel they are getting their money’s worth with your organization?
Jenny Matthews, executive director of the Tennessee Society of Association Executives (TNSAE), said she’s personally asked every one of her annual sponsors if there’s something they’d like to see offered next year. “Is there a way we can make the package more appealing for you? What would be the best benefit for you? We want everyone to be happy. It’s a symbiotic relationship,” she said. Unfortunately, Matthews may be in the minority.
Joel Turner, an event manager at Naylor’s Global Exchange Events unit, said fear has a lot to do with it. “Sponsorship is an intangible. I think associations know this and are afraid to ask.”
Kathleen Gardner, Naylor business development director said she hears three common explanations from associations about why they don’t ask sponsors for feedback:
- “We do not have the time/staff to do the type of survey we want.”
- “We’ve done surveys; we get very little response and we always have the ‘complainers’ in the membership who fill out the survey and skew the data because so few people respond.”
- “Our members tell us we’re communicating too frequently with them we just did a member survey.”
Turner, a former association ad sales rep, said it was always nerve-racking to ask an advertiser if they saw any ROI or if the saw real benefits from their sponsorship. The advertiser/sponsor isn’t always capable of gauging and measuring how their investment paid off.
- Why don’t more associations incorporate sponsor feedback into their pricing or media mix? Our research found that less than three in five associations (59.9%) bother to do so.
Is advertiser/sponsor feedback incorporated into your pricing considerations, mix of media offerings or other sponsorship programs?
Naylor’s Gardner said it can be a timing issue. Sponsorships are sold far in advance. Large sponsors often expect to receive the same deliverables that they received the previous year. There’s no cut-off point to implement a new strategy, to reconfigure a package or to redesign your marketing materials.
CMI’s Hoehn said he recently met with an association client that was getting ready to put on an event. Pricing for the event was all over the board and discussions were getting “a little heated” about the appropriate price points. When Hoehn asked the team why some wanted to raise prices and others lower prices he discovered they had four or five different “definitions of success.” For one, the definition of success was the number of bodies that attended the event. For another, it was the quality of attendees, not the quantity that mattered, since it was a very senior level conference. But another person said it was all about attracting the right [decision makers] sponsors and exhibitors wanted to see even though sponsorship wasn’t in the budget for that event. “It really opened my eyes,” Hoehn said. No one had done the research to see if raising (or lowering prices) would really impact attendance at the event. I had to remind them that they were in the association business, not in the “monthly meeting-annual conference-have a dinner-solicit vendors business.”
- If the days of gold/silver/bronze pricing tiers are over, then why don’t more associations customize their advertising and sponsorship packages? Our research found that only 10 percent of associations fully customize.
Which of the following best describes the way your organization sells advertising and sponsorship proposals?
Naylor’s Gardner said with booth space being such a priority, many associations fear they’ll be perceived as favoring one sponsor over another. As Turner said earlier, sponsorship is an intangible which the sponsor doesn’t always know how to measure or assess. But, as Karl Ely, SVP publisher, ASAE: The Center for Association Leadership explained, that’s an opportunity for your sales team to step in and be the expert. “We’re fortunate that we have a team that can go out in the field to understand the strategy of an account,” he said. ”But, it’s not enough just to visit accounts in person. You’ve got to take the time to listen to their business objectives and “understand where they are in the current buying cycle.”
4. Why do so many associations have trouble integrating their communications programs (advertising offerings)? Our research found that only 10 percent claim to have fully integrated programs even though our research shows associations with integrated communications consistently outperform those that don’t.
ASAE’s Ely said, “We’re still as strong as we ever were in print, but we’ve added a whole new digital element including a daily news brief that arrives at our members’ desks by 8am every day and we’re getting a good open rate. Plus the advertising community has followed us into that space, so it’s nice to see both the content that’s being consumed and the business side (advertisers) following us into the digital space.”
On the other hand, Naylor’s Gardner said many associations are short staffed. You’ve got different divisions working on separate pieces of the communications program. “Even with national associations, there’s typically a show manager who might be producing a guide or electronic piece tied to the show and they’re not communicating internally with the rest of the organization,” she said. “They’re not making sure that the branding and messaging is consistent across channels and that all the pieces are communicating with each other.” What’s more, Gardner said the technology is not always there to enable proper integration, which she said adds to the confusion and clutter.
If the knowledge and resources are there to support integrated communications, however, the payoff can be big. “Digital and social media is critical to our work as an association,” said Susan Neely, CAE, president and CEO of the American Beverage Association. “Our efforts in this space have only become more robust in the last two years. We integrate digital and social platforms into all that we do – whether it’s tweeting out our daily blog through @AmeriBev, correcting misinformation through @letsclearitup, creating a community with @CartChoice or engaging teens with @MyMixify.”
- Why do live conferences and events remain so highly valued by association members and vendors? Our 2014 research found that traditional conferences remained No. 1 among 20-plus media channels survey with a value of 4.68 on a scale of 5 (up from 4.39 in 2011).
On a scale of 1 (Not Valuable) to 5 (Extremely Valuable), please indicate how you value each of your organization’s existing events:
FSAE’s Rudd said that even though members have many educational programs “they can take in their PJs at night,” there’s always going to be a need for [face to face interaction]. “There’s a part of our membership that craves that,” he said, as evidenced by the attendance at FSAE’s recent annual conference—the highest in seven years.
Rita Chen Fujisawa, VP/COO of the California Association of Health Facilities (CAHF), said many associations are seeing some decline in their [conference] attendance, but she still sees great value in events. “That’s where you have interaction with your members. At the crux of our association is the secret of relationship building” and that’s often what drives members to become associate members,” she said.
CASSS, an international organization of 4,000 biopharmaceutical scientists, doesn’t charge dues, but does charge members and sponsors to participate in the 10 to 14 special interest conferences it holds each year. If you participate, you’re considered a member. As executive director Stephanie Flores explained, the conferences are designed by CASSS volunteers who recognize a need for addressing new and emerging technology and developments in the field.” The volunteers will form a small committee, draw up a business plan and present it to the board. That’s how several of CASSS’s successful conferences have been developed over the years, she said. What’s more, volunteers use their connections to gain access to [international] health authorities to sponsor CASSS conferences.
From the exhibitor’s standpoint, Gardner said there’s no replacement for face-to-face interaction. “Gone are the days that you could simply pick up the phone, have your call answered and engage in a conversation. Associations are competing in the world that everyone else lives in today. It is harder than ever before to gain a decision maker’s attention.”
Conclusion
CMI’s Hoehn said you keep hearing about for-profit companies taking over what associations used to do and offer. “But, associations can get away with pretty thinner margins on things that create value for members, he said because they’re not answerable to shareholders or a stock price, he added. And that sure comes in handy when you look at the stock market’s recent gyrations.
Click here for five more things you should really know about non-dues revenue.
Hank Berkowitz is the moderator-in-chief of Association Adviser eNews.
