Are Your Association Membership Dues Too High?

Is your association struggling a bit with pulling in new members?

This tends to be a perennial problem for associations everywhere. According to the ASI 2016 Global Benchmark Report on Membership performance, acquiring new members remains a key concern of associations. Due to the cost of acquiring new members, retaining the current ones is also a top priority.

Membership dues are often an issue that is agonized over in an association. There’s a need to charge enough to maintain the association and justify its existence, but on the other hand, you don’t want to charge a fee that people find prohibitive. This could see you both failing to acquire new members and retain the current ones.

Are your dues really the problem? Let’s explore a few thoughts.

Your Value Proposition

Why do people join an association? There are many reasons, but some of the most popular are outlined here by Chron: professional development, leadership development, influence in the community or over public policy, networking and even as a marketing tool to impress potential clients.

Notice a common thread with these top reasons? Altruism doesn’t seem to come into it, people join because there’s perceived to be something in it for them. They are looking to derive value from the membership to benefit themselves.

Where does value proposition come in?

Your value proposition provides the rationale for your members joining your organization. It is not a list of benefits, but tends to be a statement (1–4 sentences) that encompasses the very reasons why they would be interested in joining you. People need to perceive the value they are getting in order to justify paying the price.

If part of your value is their ability to make business contacts and drive more customers to their business, they’re probably looking to at least create more new business revenue than what they pay in dues.

Just check out Patrick Knapp’s examples of how he has derived value from being a trade association member. He has been able to call on the assistance of his peers in the association on more than one occasion. For example, a fire destroyed the hotel where he was to host a conference and other facilities were booked out. A fellow member was able to help him get set up to go ahead elsewhere.

When he was in danger of losing his job due to changes in the company, several fellow members volunteered to pass his resume to the right people who they were connected to. He even mentions the value he received was “well worth” the dues paid.

Can your members say that about your association? Are you delivering on the expectations set before members join and pay their first dues? If you do so, you not only have a better chance of keeping the current members, but having them as advocates of your association to potential new members.

Much of this value is derived from how well you drive engagement, which we wrote about recently here.

Source: Membership Marketing

Market Fit

Setting your dues shouldn’t be any old back-of-the-envelope calculation. There are a few factors that come into play. Is it worth setting high fees if that puts off member numbers? Probably not.

Golf clubs are an example of those who have suffered membership decline, especially since the Global Financial Crisis. This Sunday Post article lists high fees as one reason for dwindling membership of Scottish clubs, while The Economist discusses fees as a factor in declining American club memberships.

The decline leaves golf clubs looking for new ways to survive. Attracting a new generation of players is a survival tactic; however, many of the younger players cannot pay the dues that clubs are accustomed to.

Clubs that are doing well have spent some time researching the market. Traditional game too long? Develop a shorter game. Too boring? Bring in new, exciting versions of the game such as glow-in-the-dark night golf, foot golf, speed golf or versions designed for kids.

Even then, there is an overall description of “the middle class being squeezed out” with 45% of club members earning $100k or more. If you are not at the luxury golf courses, you need to be out doing more things to create the right fit for your market.

What can other member associations or clubs take from this? There is a need to be constantly analyzing your market and knowing what it is you need to do to meet their needs. Golf clubs who kept fees sky-high during the aftermath of the financial crisis took quite a hit in membership numbers. Their target market could no longer afford them and they needed to develop new ways of driving revenue outside of membership dues.

Competitor Research

Keeping an eye on what your competitors are doing is always a good idea, especially if they have a very similar “end product” to yours. It’s not the only consideration however; do you offer some kind of unique value that your competitors don’t? This needs emphasis in your value proposition. People will pay the dues if they perceive value for themselves.

Using the golf club example, if the club 5 miles away has cheaper dues, but your club has those extra activities that the cheaper one doesn’t, you’re in a good position to highlight the extra value membership to your club offers.

Analyze Your Data

Smart membership associations stay ahead of the curve, and one great way of doing so is to gather and analyze membership data.

Do you have a method in place for collecting information on why members haven’t renewed? This is made easier if you have your membership CRM set up online, but in any case, someone should be asking the question to those who leave.

For example, you might have some who tells you that “the dues are too high”, but this is not necessarily the end of the story — does that person fall under your category of “ideal target for membership”? If not, there may be more factors at play, such as you are not doing a good job presenting what you do and who you are for in the first place.

If you have ideal members leaving, see if there is more to the “too high” answer. Do they really mean “too high for the relative value I received”, or are your dues genuinely out of reach for ordinary members? The first answer means you need to be doing more to deliver value for dues, the second means your dues really may be too high.

You’re not usually going to get one distinct answer through analyzing this data as of course “too high” is a term subjective to the member. However, you should be able to collect enough evidence to help your association decide one way or another.

Final Thoughts

Setting membership dues is not an exact science, but you can certainly use different sorts of data to narrow the scope of your process.

Think your dues may be too high? One of the first things to look at is your value proposition and whether or not you are delivering on it. People will pay if the perceived value they get is worth the membership.

Market factors are also important. Your association needs to be prepared to move with developments and keep the needs of your target market at heart. Check on what your competitors are doing and offer something value-based.

Lastly, make sure you are collecting and analyzing your membership data. It’s hard to say whether or not dues are too high if you’re not gathering intel to tell you so. Look at what you offer regularly and find ways to keep your member association delivering to expectations.