{"id":6606,"date":"2016-10-13T16:49:19","date_gmt":"2016-10-13T20:49:19","guid":{"rendered":"http:\/\/www.naylor.com\/associationadviser\/?p=6606"},"modified":"2016-10-13T16:49:19","modified_gmt":"2016-10-13T20:49:19","slug":"you-think-you-know-non-dues-revenue","status":"publish","type":"post","link":"https:\/\/www.naylor.com\/associationadviser\/you-think-you-know-non-dues-revenue\/","title":{"rendered":"So You Think You Know Non-Dues Revenue"},"content":{"rendered":"

\"So<\/p>\n

\"Hank
Hank Berkowitz, Association Adviser<\/em><\/figcaption><\/figure>\n

Is your model evolving as fast as the world around you?<\/em><\/p>\n

Economic indicators show a U.S. economy that\u2019s in better shape than at any time since the Great Recession of 2008-09. But, that prosperity isn\u2019t necessarily trickling down to the association world. More than half (54 percent) of the executives who took part in our annual association communication benchmarking study<\/a> felt their organization\u2019s inability to generate non-dues-revenue (NDR) was a serious or significant challenge \u2014 up substantially from 2015.
\n
\nPercent of\u00a0Associations agreeing that NDR is a serious challenge:<\/strong><\/p>\n\n\n\n\n
2016<\/strong><\/td>\n*********************** 54%<\/strong><\/td>\n<\/tr>\n
2015<\/strong><\/td>\n***** 11%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: Association Adviser 2015-2016<\/em><\/p>\n

 <\/p>\n

\"Jill
Jill Andreu, Naylor Association Solutions<\/em><\/figcaption><\/figure>\n

This disconnect may be related to a lack of measurement or the inability to record reader engagement, according to my colleague Jill Andreu,<\/strong> VP Content Strategy and Development for Naylor Association Solutions ,who will be hosting a webinar<\/a> about our findings later this month. Less than one-third of respondents to our study reported having a process in place for measuring member engagement with their communications. Nearly half (48 percent) said they consider their ability to measure communication effectiveness a serious or significant problem, said Andreu. \u201cA lack of confidence in the ability to show sponsors or advertisers a return on their investment can hinder an association\u2019s enthusiasm to pursue non-dues revenue opportunities,\u201d Andreu added.<\/p>\n

 <\/p>\n

 <\/p>\n

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

 <\/p>\n

 <\/p>\n

 <\/p>\n

[ctt_hbox link=”X6O67″ ]The competitive field is larger than ever for associations: http:\/\/ctt.ec\/X6O67+ @AssocAdviser[\/ctt_hbox]<\/p>\n

 <\/p>\n

[ctt_hbox link=”5y3CW” ]NDR is an initiative that needs to be owned. It\u2019s no longer a side project that teams do when they have time: http:\/\/ctt.ec\/5y3CW+ @AssocAdviser[\/ctt_hbox]<\/p>\n

 <\/p>\n

[ctt_hbox link=”V4gf3″ ]Don\u2019t be defensive about the value of your assets and audience. Cost-plus pricing doesn\u2019t cut it anymore: http:\/\/ctt.ec\/V4gf3+ @AssocAdviser[\/ctt_hbox]<\/p>\n

 <\/p>\n

\"Carla
Carla Kalogeridis, Association Media & Publishing<\/em><\/figcaption><\/figure>\n

Carla Kalogeridis<\/strong>, editorial director and publisher, Association Media & Publishing said associations often get \u201cbogged down\u201d in day-to-day operations and servicing member needs. \u201cThey don\u2019t always carve out enough time to think and act strategically. NDR opportunities are definitely there, but someone needs to \u201cown the NDR initiative\u201d instead of having various departments \u201ctake a stab\u201d at it when they have time,\u201d added Kalogeridis.<\/p>\n

Addressing the NDR challenge<\/h3>\n
\"Bob
Bob Weidner, Metals Service Center Institute<\/em><\/figcaption><\/figure>\n

Bob Weidner<\/strong>, president and CEO of the Metals Service Center Institute (MSCI), said there\u2019s no such thing as the status quo anymore. \u201cTreading water and just trying to survive is a recipe for disaster. If you don\u2019t keep growing, you\u2019ll just wither away and die\u2014or the market will take you out.\u201d Weidner said MSCI tries to come up with products and services that represent real value to members \u2014 and which help grow the top line. \u201cYes, we\u2019re trade associations, but we\u2019re also running businesses \u2014 you HAVE to grow!\u201d<\/p>\n

\"Ian
Ian Santo Domingo, Vault Consulting<\/em><\/figcaption><\/figure>\n

Ian Santo Domingo<\/strong>, principal and managing director of research firm Vault Consulting, LLC, said industry consolidation is shrinking the membership base for many associations. \u201cFinding new and innovative ways to replace these dollars is becoming a priority, rather than a side project for many associations.\u201d<\/p>\n

[ctt_hbox link=”5y3CW” ]NDR is an initiative that needs to be owned. It\u2019s no longer a side project that teams do when they have time: http:\/\/ctt.ec\/5y3CW+ @AssocAdviser[\/ctt_hbox]<\/p>\n

 <\/p>\n

\"Brittany
Brittany Shoul, Network Media Partners<\/em><\/figcaption><\/figure>\n

From an ad sales standpoint, Brittany Shoul<\/strong>, VP sales for Network Media Partners said associations are at a disadvantage because \u201cthey cannot deliver (or are unwilling to pay for) the kinds of performance\/ROI data that advertisers and media buyers are looking for to justify their spend.\u201d That needs to change fast, she added.<\/p>\n

Fastest growing NDR channels<\/h3>\n
\"Tom
Tom Greve, EMS World<\/em><\/figcaption><\/figure>\n

Events, e-mail marketing and custom content provide the fastest growing opportunities for associations, according to Tom Greve<\/strong>, business development director at EMS World and former director of sales and business development at the American Institute of CPAs and The March of Dimes. Kalogeridis<\/strong> agreed. \u201cMeetings are going strong. But, vendors and service providers are looking for unique opportunities and associations that offer custom-designed ideas are getting the business.\u201d On the publications side, Kalogeridis said members want their association not only to aggregate, but analyze information and trends. \u201cCreative packaging of that analysis and effective, multi-channel delivery of that [insight] is attractive to sponsors,\u201d she added.<\/p>\n

Executive education is another hot growth area. Weidner <\/strong>said Strategic Metals Management<\/a><\/strong> (SMS) has \u201creally moved the needle\u201d for MSCI. He said SMS is a proprietary senior leadership program for up and coming metal industry execs that MSCI puts together in collaboration with Washington University\u2019s Olin Business School in St. Louis. It\u2019s an 18 to 22-month program (costing about $37,000 per attendee) that provides emerging leaders with access to top business professors, real-world education, critical thinking and in-depth professional networking opportunities. \u201cWe\u2019ve had about 300 executives go through SMS and it has generated close to $10 million for us since its inception,\u201d added Weidner.<\/p>\n

Legacy communication channels still have a seat at the table<\/h3>\n

When it comes to print magazines, directories, newsletters and live events Kalogeridis<\/strong> \u00a0observed that she \u201cwouldn\u2019t label them legacy\u201d. \u201cThey are at the core of demonstrating member value and communicating the association\u2019s messaging. Digital publications are exciting if done really well and incorporate audio, video, polls, gaming, etc.\u201d but since robust digital can now cost more to produce than paper-based media, \u201cprint is enjoying a resurgence,\u201d Kalogeridis noted. She believes that associations really need a combination of both traditional and legacy media. \u201cDigital delivers analytics and real-time response. Print delivers something tangible that is easy and pleasant to absorb. It sits on the member\u2019s desk and reminds them constantly that they are a member of something important,\u201d she\u00a0added.<\/p>\n

Shoul<\/strong> said it\u2019s important to get member feedback about the information, tools and resources they need from your association and to communicate that story to advertisers. \u201cFor some of our association clients, the print magazine continues to be their most important and highly rated member benefit. That is the story that advertisers need to hear.\u201d<\/p>\n

According to Andreu,<\/strong> Naylor\u2019s annual association communication benchmarking study<\/u><\/a><\/strong> confirms that an overwhelming 90 percent of survey participants consider conferences and other events \u201cvery\u201d or \u201cextremely\u201d valuable. The research also found member eNewsletters and print magazines to be among the most highly rated communication channels (73 and 59 percent, respectively). \u201cEven with new forms of communication popping up yearly, traditional channels are still desired,\u201d added Andreu.<\/p>\n

\"Chip
Chip Rogers, AAHOA<\/em><\/figcaption><\/figure>\n

When it comes to live events, no other association may be able to match the social schedule kept by the Asian American Hotel Owners Association<\/a><\/strong>. AAHOA\u2019s President & CEO Chip Rogers <\/strong>said his organization hosts 170 events a year. \u201cWe never stop providing members with opportunities to meet other hotel owners and vendors so they can find out \u2018what\u2019s the latest?\u2019 or \u2018what other opportunities are out there for investment, selling or financing?\u201d When you come to one of our events, it\u2019s going to lead to one of three things: making money, saving money or protecting your investment.\u201d<\/p>\n

See our\u00a0Corner Office<\/u> profile for more insights from Rogers.<\/em><\/p>\n

Should sponsored content be permitted in your member communications?<\/h3>\n

More than three-fourths of respondents (78 percent) to a recent unscientific poll of Association Adviser <\/em>readers agreed that sponsored content is OK within their member communications.<\/p>\n

\"aa-october-2016-did-you-know-sponsoredcontent\"<\/p>\n

Source: Association Adviser eNews and Naylor Association Solutions 2016 <\/em><\/p>\n

That\u2019s not surprising to EMS World\u2019s Greve<\/strong>. \u201cReaders want to know that the author has “walked the walk.” Sponsored content generated by practitioners and experienced executives provide insight that resonates.\u00a0Compilations of related articles are being published as e-books to stimulate lead generation and to provide valuable education and training.\u00a0If content can be approved for CE credit, all the better,\u201d added Greve. The above findings do not surprise Vault\u2019s Santo Domingo<\/strong> either. \u201cSeeing the word \u2018sponsor\u2019 doesn\u2019t necessarily mean \u2018sales pitch\u2019 if done correctly. Many sponsors have a lot of valuable expertise to share with members, and if it is something that is deemed helpful, I see nothing wrong with it especially if it brings in revenue.\u201d Kalogeridis<\/strong> said the only associations that can afford to turn their backs on sponsored content are the ones that dominate their industries and don\u2019t need the revenue. \u201cMost associations don\u2019t fall into that bucket anymore,\u201d she added.<\/p>\n

Christopher Williston VI,<\/strong> SVP of the Independent Bankers Association of Texas\u00a0said associations should position themselves as trusted arbiters of information<\/a><\/strong> for their members and the industries. \u201cWhy don\u2019t we harness partnerships with other [providers of expertise] and let the association take the lead by sharing information that can truly benefit members\u2014not the salesy pieces?\u201d<\/p>\n

MSCI\u2019s Weidner<\/strong> agreed. \u201cWe absolutely think there is value in being a repository of intellectual capital. If you\u2019re talking about white papers<\/strong><\/a> like the ones we have on our website and digital publications, the operative phrase is \u2018white.\u2019 They must be intellectual thought leadership pieces, not sales literature or a commercial for the sponsoring company.\u201d MSCI vets all sponsored content carefully, and if it passes muster, Weidner said MSCI will include it on its website, in its digital publication and also promote its availability to members.<\/p>\n

Sponsored content guidelines<\/h3>\n

\u201cAdvertisers and sponsors are pretty savvy now,\u201d noted Kalogeridis<\/strong>. \u201cThey know that being salesy is a turn-off to readers. They\u2019ve had a lot of practice with social media, which has taught all of us that when we engage, we should be all about the customer and not trying to push our own message or product.\u201d<\/p>\n

Shoul<\/strong> stressed the importance of providing clear guidelines to your advertising partners, using language such as \u201cAdvertiser agrees that content should focus on information, findings, or case study in an objective way that both benefits and informs the audience and does not solely focus on the direct promotion of a company or product.<\/em>\u201d Shoul said you should also send advertisers and agencies examples of sponsored content that\u2019s run with you in the past \u2014 WELL BEFORE they develop a campaign for your media.<\/p>\n

Greve <\/strong>said all content EMS runs from companies, bloggers and guest authors must be vetted to keep product endorsements to a minimum. In exchange, Greve said they provide authors of sponsored content with bylines and contact information at the end of their articles.<\/p>\n

Collaboration between editorial and sales<\/h3>\n

Shoul said she and Kalogeridis present frequently about this topic. \u201cIn our sessions, we strongly suggest that advertising and editorial teams have standing meeting times to discuss upcoming content, new advertisers and opportunities to work together. The only way to maintain harmony is to build an environment with open communication between these teams.\u201d Kalogeridis said it also helps if sales and editorial take turns \u201cwalking in each other\u2019s shoes,\u201d even bringing editors along on sales calls.<\/p>\n

Can NDR go too far?<\/h3>\n

MSCI\u2019s Weidner<\/strong> said the challenge isn\u2019t finding the right ratio between dues and NDR. He said you need to make sure that you, your board and your volunteers are carefully aligned about your mission and philosophy. \u201cAre we going to price based on value or just price enough to cover costs? Cost-plus pricing is a fundamentally flawed model. Do you really know what it costs to produce an iPad is? Who cares? I know what I\u2019m willing to pay<\/em><\/strong> for an iPad \u2014 the value it gives me,\u201d quipped Weidner.<\/p>\n

[ctt_hbox link=”V4gf3″ ]Don\u2019t be defensive about the value of your assets and audience. Cost-plus pricing doesn\u2019t cut it anymore: http:\/\/ctt.ec\/V4gf3+ @AssocAdviser[\/ctt_hbox]<\/p>\n

 <\/p>\n

Both Greve<\/strong> and Weidner<\/strong> said the term \u201cnot for profit\u201d is just a tax status and not a business model. Kalogeridis<\/strong> said today\u2019s members understand that associations need revenue to continue serving their needs and that their needs can\u2019t be met with just membership dues. \u201cMembers only get irritated if they feel they are being sold to all the time and not being given something of value in return.<\/p>\n

Conclusion<\/h3>\n

According to Weidner<\/strong>, there\u2019s an \u201carchaic notion\u201d that if a trade association is growing well then there something evil about it. \u201cAs associations, we need capital to invest in new products and new services for our members. That new capital has to come from somewhere. There are startup costs for rolling out new products and services here, just as there are startup costs for everyone from manufacturers to Starbucks. If more association thought in an entrepreneurially and embraced capitalism, their boards wouldn\u2019t be wrestling with so many revenue and sustainability issues.\u201d<\/p>\n

Hank Berkowitz<\/strong><\/em><\/a>\u00a0is the moderator-in-chief of\u00a0<\/em>Association Adviser eNews.<\/p>\n","protected":false},"excerpt":{"rendered":"

Economic indicators show a U.S. economy that\u2019s in better shape than at any time since the Great Recession of 2008-09. 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