{"id":5765,"date":"2016-04-28T15:24:47","date_gmt":"2016-04-28T19:24:47","guid":{"rendered":"http:\/\/www.naylor.com\/associationadviser\/?p=5765"},"modified":"2016-04-28T15:24:47","modified_gmt":"2016-04-28T19:24:47","slug":"non-dues-revenue-is-alive","status":"publish","type":"post","link":"https:\/\/www.naylor.com\/associationadviser\/non-dues-revenue-is-alive\/","title":{"rendered":"Non-Dues Revenue Is Alive and Well"},"content":{"rendered":"
\"Hank
Hank Berkowitz, Association Adviser<\/em><\/figcaption><\/figure>\n

Just don’t overdo it.<\/em>
\n<\/strong><\/p>\n

\u201cHank, for the last time, I need you and your team to dial back the ad sales this quarter. Otherwise there will be consequences.\u201d<\/p>\n

It\u2019s not the way you want to start your annual review, but I really had this conversation with my boss when I ran the online media group for a large financial association. My boss wasn\u2019t trying to squeeze the sales reps out of their commissions. The issue was that the group was generating a 7-figure annual ad revenue stream and each year, more of the advertising and sponsorships was coming from companies outside the financial arena for products and services outside the financial mainstream.<\/p>\n

As some of you know, the tax on unrelated business income (UBIT) can be a killer for associations and other not-for-profit organizations\u2014and it can seriously jeopardize their tax-exempt or tax-preferred status. What\u2019s more, the sales reps wanted to max out their commissions, but our print magazine folks, our conference team and our webinar promoters felt the digital sales team was migrating dollars away from their channels. Channel conflicts not only occur between groups at many associations, but even within the same group.<\/p>\n

As Joseph Ricci, <\/strong>CAE, president and CEO of the Textile Rental Services Association<\/a> (TRSA) discusses shortly, when you\u2019re introducing new supplements to your print magazine, make sure you\u2019re not \u201ccannibalizing\u201d the primary advertiser base to support the supplement.<\/p>\n

\"Tweetables\"<\/p>\n

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From ads\u00a0to grants, affinity programs and strategic partnerships, always keep the 3Ws in mind.\u00a0\"RealLilTweetables\"<\/a><\/p>\n

Having more sponsors\/partners isn\u2019t necessarily the answer. Grow\u00a0the relationships you already have.\u00a0\"RealLilTweetables\"<\/a><\/p>\n

Think outside the box. What is the rest of the world doing that associations can change and\u00a0adopt?\u00a0\"RealLilTweetables\"<\/a><\/p>\n

Articulate the value of your members\u2019 buying power, industry representation and name recognition.\u00a0\"RealLilTweetables\"<\/a><\/p><\/blockquote>\n

But let\u2019s not get too far ahead of ourselves. Non-dues revenue is increasingly important at many associations. As Patrick LeClerc<\/strong>, President & CEO of the Canadian Urban Transit Association (CUTA) explained, \u201cit\u2019s really important for associations to diversify. You can\u2019t simply raise the membership fee. You need to reinvest in the organization and find innovative ways to generate non-dues revenue.\u201d<\/p>\n

Despite an up-and-down global economy, experts tell us that there are plenty of advertising and sponsorship dollars to be had, but you need to work hard for it\u2014and keep working hard for it.<\/p>\n

Angela Kisskeys,<\/strong>\u00a0marketing & communications manager for the Midwest Society of Association Executives<\/a> (MSAE), said advertisers want more data to support their investments and are \u201cvamping up their ads\u201d to get their messages to resonate with members. \u201cSponsors want face to face time, and they want creative and unique exposure. We work\u00a0to keep our sponsor relationships strong and customize their sponsor packages to meet their needs. It’s all about being flexible, creative and willing to customize our benefits, exclusive offers and recognition for each sponsor,\u201d Kisskeys said.<\/p>\n

But, MSAE is still in the minority. As the results our annual benchmarking research study<\/a> found, less than half of associations (48.2%) are offering any type at least some form of customization to their advertising and sponsorship, although that\u2019s a slight improvement from 42.8 percent who said so in 2014.<\/p>\n

Which of the following best describes the way your organization sells advertising and sponsorship proposals?<\/h3>\n

\"Ad<\/p>\n

See Tara Ericson\u2019s <\/em>Association Adviser article for more <\/em>tips about sponsor customization<\/em><\/a>. <\/em><\/p>\n

Ricci said TRSA\u2019s electronic ad revenue is up from last year and that vendors and suppliers) have been willing to try new advertising and sponsorship opportunities. But, Greg Griffith, <\/strong>executive director of Georgia Soccer<\/a>, said it is still challenging to bring in sponsors. \u201cSponsors seem to want only the super events like sponsoring the new Georgia Dome, rather than smaller activities,\u201d he said.<\/p>\n

Peggy McElgunn<\/strong>, executive vice president, Global Professional Services (GPS), said she\u2019s finding that sponsors really want engagement. \u201cIt\u2019s not enough to provide exposure.\u00a0But many advertisers in healthcare continue to do it \u2018the way they have always done it\u2019 even though that gets them nowhere,\u201d said McElgunn.<\/p>\n

Does membership size affect sponsorship potential?<\/strong><\/h3>\n

According to Tara Ericson<\/a>,<\/strong> a group vice president at Naylor Association Solutions<\/a>, national associations may have an easier time generating a higher volume<\/em> of sponsorship\/advertising revenue, but not in attracting the sponsors\/advertisers. \u201cThe key to capturing this audience,” she said, “is to have very clear \u2018sales bullets\u2019 about your association membership.” Ericson said to focus on the unique value of your membership base such as their collective buying power, the percent of your industry that your members represent and unique attributes that distinguish your organization from peer associations (i.e. you\u2019re the largest, the oldest, the most politically active).<\/p>\n

\u201cCan you name-drop your largest and most influential members?\u201d Ericson asked.<\/p>\n

NDR game changers <\/strong><\/h3>\n

While NDR is not always easy to generate, there has been no shortage of ideas about how to deliver it. GPS\u2019s McElgunn<\/strong> expects games and interactivity to be the next big thing on the NDR horizon. Naylor\u2019s Ericson<\/strong> pointed to video sponsorship and sponsored article opportunities, while Georgia Soccer\u2019s Griffith<\/strong> cited networking events. Ricci<\/strong> agreed, noting that TRSA recently replaced the tabletop option at its annual conference with an Executive Exchange event. \u201cFor a flat fee, associates sponsor the Exchange, which guarantees them twelve 15-minute one-on-one meetings with decision-makers. Operators (our members that purchase) choose to participate in exchange for a full rebate of their conference registration fees ($995).\u201d TRSA developed an online application to help match buyers and sellers, allowing them to invite, schedule and reject meetings to ensure common interest. \u201cAfter only two weeks, we\u2019ve [already] sold one-third of the inventory and expect to sell out within the next few weeks (35 opportunities),\u201d related Ricci.<\/p>\n

Meanwhile, MSAE\u2019s Kisskeys<\/strong> said she isn\u2019t quite sure where the next NDR game changer is coming from, but you have to keep your eyes open think outside of the box. \u201cWhat is the rest of the world doing that associations can change and\u00a0adopt?\u201d asked Kisskeys.<\/p>\n

Sponsored content and native advertising<\/h3>\n

Advertiser supplied content enables sponsors to tell a more in-depth story than a display ad, banner ad or short video ad can. If done well, the content, which is often prepared by industry experts at the sponsoring company, can provide members with information that advances their knowledge about important industry trends, topics or solutions. Just make sure you and your participating sponsors are keeping everything above board and that you \u201ctell before you sell.\u201d As McElgunn<\/strong> said, \u201cWe focus on education, so our content must be educational in nature.\u201d<\/p>\n

Naylor\u2019s Ericson<\/strong> concurred. Prior to the sale, \u201cyou must provide clear guidelines about what you are willing, and NOT willing, to accept. Send the advertiser good examples of past sponsored content that you have published,\u201d advised Ericson.<\/p>\n

As the Associated General Contractors<\/a>‘ Christopher\u00a0Monek<\/strong> explains<\/a>,\u00a0\u201cAGC has a relationship with Enterprise Fleet Management. Over the years we\u2019ve had a number of discussions with those executives and experts about the prevalence of technology in vehicles, and how technology can help fleet managers in construction firms.\u201d<\/p>\n

Ricci<\/strong> said TRSA launched market- and product-specific supplements several years ago that allowed its suppliers to purchase a full page print advertisement in the member magazine and also receive a two-page case study spread. Ricci said, just make sure you know your costs up front and that you have a breakeven point in mind.<\/p>\n

\u201cWe are printing a slightly undersized insert into our monthly member magazine, Textile Services<\/em> (8,500 distribution) for the supplement and have managed costs to ensure that if we sell three or more ad packages, it generates a positive return. Otherwise we don\u2019t print,\u201d he said. Ricci also said you need to remind your sales team not to cannibalize your primary advertising by allowing clients to move from your magazine to your supplement.<\/p>\n

Monetizing mobile conference apps<\/h3>\n

Mobile apps can certainly enhance the attendee and exhibitor experience at your live events and provide an additional revenue stream. Just make sure the app has useful features and content (not gimmicks) and that it gives sponsors clear presence. Also, don\u2019t just throw together an app to show that your organization is cool and cutting edge. \u201cIt\u2019s essential to have a plan,\u201d said Kisskeys<\/strong>. Naylor\u2019s Ericson<\/strong> said that whenever possible, don\u2019t let more than one or two companies sponsor the app and \u201cbundle the [app] sponsorship with onsite signage so your sponsor has both virtual and onsite exposure to your attendees.\u201d Ericson also recommended sending app sponsors the conference survey results and attendee list as a value added benefit.<\/p>\n

Video sponsorship<\/h3>\n

Georgia Soccer\u2019s Griffith said, \u201cWe are starting to stream and will have a sponsor for the stream. We will see how this goes.\u201d According to Ricci, TRSA has a quarterly video news update and sells a primary sponsorship that appears during the lead and close, as well as on the page hosting the video. \u201cWe also are selling webinars sponsorships for our monthly series. We\u2019ve had good, not great response, but expect it to increase when we have more data to justify viewership,\u201d Ricci said.<\/p>\n

Diversify<\/h3>\n

As my financial association colleagues used to say, you need a balanced portfolio of revenue streams. McElgunn<\/strong> agreed. If nothing else, \u201cDiversify, diversify, diversify!\u201d Sylvia Newell<\/strong>, executive director, Canadian Association of Railway Suppliers<\/a> (CARS), said that if executed well, golf outings<\/a> can be a powerful NDR generator. You can offer sponsorship of everything from goodie bags, to the post tournament dinner, to sponsorship of each hole or the entire course or event. Newell said golf events can be a great way to bring members and industry suppliers together in a relaxed setting.<\/p>\n

See this month\u2019s Corner Office profile<\/a> for more insights from Newell.<\/em><\/p>\n

You don\u2019t get if you don\u2019t ask<\/h3>\n

Our annual benchmarking study found that less than half of associations (47 percent) regularly ask their advertisers and sponsors if they feel they\u2019re getting their money\u2019s worth (down from 53 percent in 2014). However, among associations that do<\/em> ask, three out of four (75 percent) are incorporating the feedback into their pricing considerations. \u201cAs an association, it\u2019s your responsibility,\u201d said Newell<\/strong>. \u201cYour sponsors are dishing out a lot of money. You want to make sure they\u2019re getting their money\u2019s worth and they\u2019re not just being treated like a cash fund.\u201d<\/p>\n

TRSA\u2019s Ricci advised asking your vendor and suppliers for ideas. \u201cThey are working with many organizations and you can borrow from others. Also get involved in peer groups; we are active with Association Trends, CEO Update, NAM Council of Manufacturing Associations (CMA), ASAE, for example.\u201d According to Newell, CARS sends out post-event surveys asking for feedback. \u201cWe read through surveys VERY thoroughly so we can see where we can improve on the next one. Most of our sponsors already have us in their budgets and will often ask, \u201ccan you save this for me?\u201d<\/p>\n

Strategic partnerships and the 3Ws<\/h3>\n

As AGC\u2019s Monek<\/strong> explains in this month\u2019s episode of Association Adviser TV<\/a>,\u00a0\u201cStrategic partnerships take time to develop and must contain what Monek and other experts call ‘The 3Ws:’ Is it a win for the member<\/strong>, a win for the partner<\/strong> and a win for the association? <\/strong>For members, does the partnership offer a discount, product, service or program that they can\u2019t get elsewhere? For the partner, does the relationship provide access to the association\u2019s highly sought after members? For the association, does the partnership have a positive impact for the association itself?<\/p>\n

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