Non-Dues Revenue: Like it or Not, Cash is King

By Hank Berkowitz • April 20, 2015

Hank Berkowitz, Association Adviser
Hank Berkowitz, Association Adviser

Jack Welch, the former hard-charging CEO of General Electric, was famous for boiling down business strategy into basic terms. Take one of his favorites: “Cash is king.” It’s a simple and elegant philosophy that associations are following more and more whether they admit it or not. As Michael Pennington, EVP of the Healthcare Convention & Exhibitors Association, explains in today’s Corner Office profile, “More and more association models are moving away from dues only. You need a diversified portfolio of revenue streams to help you weather any storm.” Those storms include not only economic upheaval, but demographic shifts, technology advances and competitor disruptions.

In our annual study of association communication trends in 2014, we worried that only half of associations (53 percent) were regularly asking advertisers and sponsors if they felt they were getting their money’s worth. What’s more, just more than half of associations (59 percent) were incorporating the feedback they got from advertisers and sponsors into their pricing considerations, and only 43 percent said they were trying to customize their advertising/sponsorship programs to a company’s specific needs.




When it comes to sponsored articles and videos, make sure that content leads and the brand follows. RealLilTweetables

A diversified portfolio of revenue streams will help you weather economic downturns, demographic shifts and competitor disruptions from within and outside your industry. RealLilTweetables

Savvy conference and trade show organizers are taking a year-round view of their events. RealLilTweetables

Keep tabs on all the new ways to connect with members, but don’t underestimate the power of legacy channels, such as print, live events and newsletters. RealLilTweetables

Well, the message seems to be getting through. According to early results of an unscientific poll of Association Adviser readers, half of respondents (50 percent) said advertising and sponsorships would be their single fastest source of non-dues revenue. Here are some of the trends we’re observing with the help of industry thought leaders. “If you asked me a few years ago, I’d rate NDR a 6 or 7 on a scale of 10. Today’s it’s at least an 8,” said Pennington.

Sponsored Content

Cash may be king, but Karl Ely, VP and publisher of the American Society of Association Executives (ASAE), thinks content should have a seat on the revenue throne as well. “We’re looking to blend the print environment with the digital environment to create sponsored opportunities for our accounts where content leads and the brand follows. That’s going to position those accounts in the sponsored content area as thought leaders in the space,” said Ely.

From personal experience, I know that sponsored editorials (and later sponsored video) were substantial money makers when I managed a diversified e-newsletter group at a large financial association. As long as clients kept their sponsored content (often abbreviated versions of their white papers) above board and educational, rather than salesy, the clicks and opens on that content was strong and pretty comparable to what our regular articles and videos received. We had a separate review committee, not the regular editorial team, vet the articles, and they had the right to reject any content it deemed too promotional. We also had some other basic ground rules: (a) Don’t trash your competitors and (b) Don’t say that your product or service is No. 1 unless it truly has been deemed so by an independent study.

Year-round focus on events

Every year since 2011, our annual association communication benchmarking study finds live events at or near the top of the rankings for associations’ most valuable member benefits.

“I don’t believe we will ever get away from face-to-face marketing,” said John Gallagher, director business development, events for Naylor Association Solutions. “People still want to see the product work, shake your hand and look you in the eye. It’s relationship-selling, and it is powerful. Education is still key, and business on the trade show floor is still important. But it’s the networking aspect of live events that really can’t be duplicated.”

Pennington agreed. “You can’t replace the value of face-to-face interaction. There’s no other way to replace body language, eye contact and a firm handshake when you’re standing with someone you want to meet. Even our youngest members tell us that face-to-face is the best way to network and get business done.”

As the Center for Exhibition Industry Research (CEIR) concluded, nearly all (98 percent) of young exhibitors find that exhibitions deliver unique value that cannot be fulfilled by other marketing or sales channels. One-on-one conversations with exhibit personnel, with and without a product demonstration are the number one face-to-face settings of choice for young people. But, according to CEIR, you’ve got to keep it friendly and inviting. Emphasis on the importance of exuding a “friendly and outgoing” approach is uniquely Millennial, and at 77 percent, it is a top-ranked trait that young exhibitors look for in booth staff, CEIR research concluded.

Gallagher observed that organizers of association events are thinking more like for-profit organizers than ever before. “There used to be the ‘If you build it, they will come’ philosophy, in which associations viewed their events in a vacuum—a must-attend event. But there are so many alternatives offered today, that associations need to be dialed into their industry and their event needs to be in the marketing budgets of all of their exhibitors,” added Gallagher. “You’ve got to demonstrate ROI to your exhibitors for each and every event.”

As Michelle Giles explains, satisfaction with an exhibit experience isn’t defined by just the event itself, but by how the host treats an exhibitor throughout the year. Keep in touch with your exhibitors and let them know how much your association values their participation. Giles advises using surveys, phone calls and other efforts to “steward” your association’s relationship with exhibitors.
According to Giles, The New York State Association of Fire Chiefs holds its FIRE event yearly. More than 180 exhibitors have consecutively exhibited for three or more years in a row. The association (and its Naylor partners) knows what event activities and setups are important to exhibitors and attendees. NYSAFC intentionally communicates its event improvements and changes to exhibitors throughout the year and, in return, exhibitors reserve booth space year after year.”

Exchange events

Gallagher said buyer-seller exchange events (aka appointment-setting events) work well for a variety of industries. They’re a good way for associations to put pre-screened buyers and vendors together at a time that doesn’t conflict with their annual meeting. It’s essentially “speed dating” for companies and a perfect way for a busy executive to meet with a number of vendors over many different product lines. “They can knock these meetings out in a few days, which otherwise would take months,” added Gallagher.

Monetizing social media

While Facebook, Twitter and LinkedIn get most of the attention, associations are learning to monetize other social media platforms they maintain.

You don’t need a big promotions budget to boost non-dues revenue through visually-oriented social media, such as Instagram. She suggested taking an inventory of your visual assets to see which types of fee-based items you can promote. For your events, offer a discount on registrations available only through Instagram and showcase event speakers and photos of the venue. These snippets of information might entice members (or non-members) to attend, or to register early, and give you a jump start on estimating attendance numbers.

For sponsorships, Clark says Instagram’s visual platform can help you perfectly illustrate how visible sponsors could be at your next luncheon or conference, or in association materials. You can also use Instagram to help sell educational materials by posting a photo of what’s up for sale and provide a link to PayPal, AffiniPay, your website or another preferred online transaction system where members can complete the transaction.

“Sometimes a picture sells better than words can,” relates Clark.


Our annual research study finds that that nearly half of associations (44 percent) have already integrated video into their communication strategies, and one-fourth (24 percent) plan to integrate video within the next 12 months.

According to Aaron Weisberg, video sales manager at Naylor Association Solutions, the streaming video platform that we’ve been customizing for our association clients (Association TV) has the highest completion rates of any video clips that he has seen in his career. Weisberg reported that viewers are watching between 80 and 100 percent of [each episode].

“Metrics like this tell us that the user is committed to the content and interested to learn more about everything it has to offer. After 90 seconds of exposure to the content, when that viewer clicks through to your website, he or she is ready to learn more about your product or service,” Weisberg added.

The Material Handling Equipment Distributors Association has seen great success using video to enhance their educational offerings. MHEDA has used its credibility in the industry to partner with companies such as Mitsubishi, Caterpillar, and Toyota to produce a video series about the proper use of forklifts in material handling. MHEDA’s Executive Vice President, Liz Richards, said that video offers a “short, easy and concise way to communicate our messaging across many different types of social and electronic media.”

Caren Kelly, manager of marketing and trade shows at the Western Retail Lumber Association (WRLA), agreed that “videos engage people in a way that photos and text alone cannot. They give us the power to visually showcase our products and services as well as provide information in half the time. And, thanks to mobile devices, you can access the content anywhere, on any device, at any time.”

Career centers

Year after year, our research shows career advancement and professional development among topics most important to association members across all industries. If you think about it, said Carrie McIntyre, senior director of business development for Boxwood Career Solutions, associations have always been a career center for their members, and it’s one of the main reasons people join associations.

What’s changing is that associations now look toward their career centers to be more than just a member benefit—they’re looking toward their career centers as a key driver of NDR. And employers are looking toward association career centers to find to find top candidates who aren’t actively looking for a new position. Whereas most of the folks posting resumes on Monster.com are actively looking, McIntyre said only 10 to 20 percent of those checking out association career sites are active job seekers at any given time. That gives associations significant leverage in terms of how they charge employers for access to their resume databases, how they charge employers to post jobs to their sites, how much they charge for featured job listings, featured employer status, for employment ads in the association’s e-newsletters and for sponsoring the association’s career center.

Down the road, McIntyre expects more associations to generate significant revenue through virtual career fairs and by selling salary surveys to employers and professional certification to members.

AMS—from cost center to profit center

As we’ll discuss in upcoming issues, many think of an association management system as a cost center, database or efficiency tool, but it can also be a revenue generator with job boards or easy-to-maintain member directors or online buyer’s guides.

Brian Choate, CEO of Timberlake AMS Solutions, told us that both member directories and online buyers guides can be monetized through enhanced listings, sponsorships and solicitations of donations.


As Jack Welch would say, “If you don’t have a competitive advantage, then don’t compete.” Think about that carefully before you develop your next member benefit or send your next member communication.

Hank Berkowitz is the moderator-in-chief of Association Adviser eNews.