If you skim through a few 990s, the business model of the association sector becomes quite clear. Member dues, conference registrations, sponsorships, and education and certification fees. For associations, these have been the major — if not the only — sources of revenue, driven by the needs of members and customers.
Today, the balance sheets and overall financial health of the association sector have fundamentally changed. Likewise, the needs of members and customers have shifted dramatically. And while many associations have long recognized the need to evaluate and challenge their legacy business models, few have actually tackled this bold and complex initiative.
I recently sat down with a few association executives from a range of industries and fields to discuss the current climate and its impact on the association business model. We talked about how associations are adapting in the almost real-time pressures of the current crisis and shared our visions for the future.
Where we stand today
- 71% expecting budget cuts
- 50% freeze on salary increases
- 46% hiring freeze
- 82% saying they need to become more adept at rapidly develop new ways of generating revenue
- Associations also increasing access for non-members
- 74% Education/Webinars
- 58% substantive resources
- 46% conferences/meetings
It’s clear that face-to-face meetings are, for at least the near term, no longer a major offering and revenue stream for associations. Despite the fact that connection through networking, knowledge sharing, etc. remains a fundamental need within industries and professionals, the confidence in convening a large audience at an in-person event might never be restored to pre-COVID levels. This has left associations scrambling to reinvent the opportunities to connect while grappling with significant revenue setbacks.
To balance the bottom line and take advantage of the growing number of new audiences engaging in virtual events, associations are sharpening their focus on membership renewals and prospect engagement.
What we can do
Our current reality has forced everything to become real-time market testing. Strengthening value propositions and opening access to resources and events for nonmembers have become some of the common tactics for enticing and becoming acquainted with potential members while maintaining loyalty from the existing membership base. But where do we go from here? From increasing accessibility to virtual networking events and free webinars to replicating small gatherings through executive roundtables, associations are maximizing opportunities for engagement while rebranding meetings and conferences with an appeal toward convenience and safety.
Reimagining the in-person event
Virtual networking will never be the same as in-person interactions. But by moving quickly to assess the programs and services that are driving participation and conversion, associations can evaluate where to invest and divest. While most associations can do content relatively well virtually, few can replicate the rich and often organic networking experience that comes at an in-person event. Explore technology solutions that connect individuals based on their interests or needs, such as the matchmaking app Grip. Associations are also having to rethink sponsors engagement around meetings. New platforms to replace the traditional tradeshow floor are being considered. Rather than try and pass off your virtual event as the well-established and popular in-person event that it is not, rebrand the virtual show and highlight its new features.
A sense of community is craved now more than ever before. Audiences appreciate the opportunity to connect honestly and openly with a trusted peer group. This is where the concept of a virtual town hall or other invitation-only forum can prove extremely successful. These virtual events are often moderated by an individual, hosted live with questions that are shared in advance. The outcome? Conversation “hubs” that promote resource-sharing but also give the association an opportunity to collect real-time insight into the profession or industry. Increase opportunities for them to come together like this to share their thoughts and challenges — which can help you cater to their needs and engage them more effectively in tandem.
Pivoting product and content marketing
While it was natural in the early phase of the crisis to accelerate the dissemination and accessibility of content, it’s integral for associations to continue to monitor content consumption metrics and quickly respond to the needs of stakeholders. In other words, how can associations evolve their product development process to more closely align with the rapid evolution of market demand? By rethinking your value proposition, getting to know new contacts and reacquainting yourself with current members, you can effectively repurpose content and resources to provide access across channels, at the right time, for the right participant.
Choosing the right membership model
It’s undeniable that selling the value of membership during a time of economic instability is more challenging than ever before. Membership models are critical to attracting and recruiting members. Organizations can combine the classic ability-to-pay structure with a value-based component to produce a hybrid model. This allows member flexibility in price point and benefits access while maintaining a more predictable revenue stream for your organization.
This is achieved by offering members an option to upgrade from a “base” membership to a “premium” that offers more benefits for a higher price. Both “base” and “premium” memberships are priced depending on the member’s ability to pay.
The new business model is not solely about revenue – it’s also about expenses. Associations are obviously eliminating discretionary spending, but also redeploying and reskilling staff to realign with shifting areas of demand. Meeting staff who are no longer focused planning face to face events are now being asked to apply their skills elsewhere. Special committees are forming to focus on employee mental health and wellness. And, willingness to retrain or learn new skills that apply to the virtual environment are now highly valued among association staff leaders.
How we can move forward
By turning challenges into opportunities and following a balancing act when it comes to financial stability and member needs, associations can continue to innovate their business models despite ongoing disruption.