How long has it been since your entire management team met to discuss pricing? Does your team ever meet to discuss overall pricing?
In many associations, each department works independently to set prices at budget time, or the board of directors may order an increase in dues every few years, but rarely does the entire management team craft the association’s pricing structure together.
Lack of coordination can lead to conflict between revenue areas. We’ve seen events teams work at cross purposes with membership teams because of pricing. The education team wants as much revenue from meeting registration as possible, so they encourage non-members to register at higher rates. Membership, on the other hand, wants to convert those non-members into members, resulting in lower registration fees. If overall revenue is declining, the tension between departments is likely to increase as they try to meet their budget goals. The conflict can extend to other revenue-generating departments, as well.
Your budget may also include programs that don’t generate any revenue but are valuable to the association for other reasons. If they are supported by dues income, do they have a voice in setting their budgets? Does membership have a voice in their budgets? Can membership use the program as a member benefit to recruit and retain members?
Obviously, I am making the case for periodic reviews of association pricing conducted by the entire management team. Thinking about revenue wholistically can uncover ways to save money or present ideas for cooperation that can generate additional revenue. The essential question, however, is: “Does this provide value to our members?”
If your members believe they receive value for the money they spend with you, they are more likely to renew their memberships. If they think all your programs and services provide good value, they are more likely to buy more than a single membership. Your team should start their pricing meeting with a discussion of what members value about your association.
The easiest way to discover what your members value about your association is to ask them. Membership surveys may scratch the surface, but to really understand what your members value you need to ask follow-up questions. Here are a few suggestions:
Let’s say you’ve polled your membership, and they tell you they really like the collection of forms you have online. You need to ask them why because just valuing the forms doesn’t tell you specifically where the value is.
Do they find value because:
Don’t make assumptions about why members value your association as a whole or why they value its component parts. Ask them whenever you can. We know executive directors who frequently ask this question in casual conversations with members.
Start digging deeper into the individual “whys” of value and you will start to see trends for your association. Is value rooted in saving time or money? Is it rooted in education or credentials? Is it rooted in recognition or convenience? Is it rooted in personal satisfaction or prestige?
When you know what your members value by identifying the larger trends, you can begin to structure your pricing and programs to enhance that value. You can speak directly to your members’ needs and attract new members who have similar needs.
Once you understand what members value in your association, you can begin to consider your pricing. Your research will tell you what dues structure might work the best, as well as what your members would be willing to spend for programs or services. You might find that you’re not charging enough.
Of course, you’ll have additional concerns that affect pricing. You’ll examine your expenses – how much it really costs to offer your programs and services – and what programs currently cover their costs. You’ll evaluate the popularity of programs and services, sunsetting those that no longer meet their objectives. And you’ll develop new programs that target the value trends you have uncovered.
Pricing affects your entire association and setting prices should be a collaborative practice. If your team meets regularly, they get better at doing the research and making the tough decisions.
Making tough decisions can get emotional. Using data as a guide can help keep emotions under control and conflict to a minimum. It’s sometimes hard to sunset a long-running program, but it is often necessary.
The more your staff understands value, the more likely they will be to price that value accordingly. The more value your members discover, the more likely they will be to engage with your association.