In the 25 years I’ve spent focusing on business relationships and how to make them yield strategic results, I’ve worked with leading brands, Fortune 100 companies, and professional associations that shape whole industries. One interesting approach is to adopt the relevant private sector growth strategies: evolution of the revenue and fundamentally many business models via customer relationships.
To create the conditions for transformative association growth to occur, leaders must redesign their organization to put customers at the center of all that they do, all that they’re about, and the fundamental value they seek to create. Members are the heart of the enterprise, the living reason it exists and the primary stakeholder group it must delight or die. Your ultimate goal as an association leader must be members who are dramatically better off because of their relationship with you.
The first strategy is to uncover the real needs of members, versus what they may say they want. Needs-based segmentation makes it possible to anticipates the future needs of a particular member segment and meets those needs with consistent, unique value. Your members of 20-plus years’ tenure have very different needs than your newest members. Are you treating the two niches as fundamentally the same? Then it’s time to re-engineer that member relationship strategy.
I suggest that you evolve your association toward a new revenue model, by overlaying the organization on the member segments so that they drive organizational strategy. Specifically, I recommend that you develop offerings that align with the needs and capabilities of each of the six stages in the customer/member life cycle:
Ailing associations are frequently operating with outdated revenue models. The solution is to redefine traditional ways of making money (dues). You can create stair steps of value that serve the needs and capabilities of everyone from the prospective member not yet aware your association exists to the long-term member whose relationship with you has reached expert level.
Once you structure the organization around the needs of member segments, with offerings designed to appeal to each, the next step is to re-engineer the revenue model. How will you charge for each level of value? To whom will you promote each? You might find it helpful to study the book Business Model Generation: A Handbook For Visionaries, Game Changers, And Challengers by Alexander Osterwalder and Yves Pigneur—it can open your eyes to your revenue model as it relates to the relationships you are trying to build with members.
How can you shift from a traditional events-and-education association model toward a revenue model that engages and empowers potential members, increasing their desire to enroll? Limiting content and live events to dues-paying members are classic examples of traditional revenue models that force most potential members to decline, because the value they perceive isn’t sufficient to convince them to take the time away from their businesses. Many are reluctant to invest in something they can’t also provide for their staff.
A growth-oriented association revenue model looks at both current and potential members using the stair step approach. It attracts potential members by giving value until they say, “This has been really good. I’m willing to pay your membership fee to get more of it, and to be around others in my industry who struggle with issues like mine.” You can still have the live event; just simulcast or record it, so that non-members can experience your value, albeit at a shallower level (non-interactive) and a lower price point (or even free).
How to educate that broader audience is a challenge best addressed by redefining your own position as an industry leader. If you provide value to a non-member, you elevate yourself above the noise. Then, once you educate prospective members, follow through with a process designed to stimulate their interest in going to a deeper level. Get a list of non-members attending or downloading your webinar or free whitepaper. Make sure they are asked about their experience, and are invited to your next event. At that point, you’ve just engaged them. At that next event, ask them how things are going with their business, and what it will take for them to get involved with your organization. As long as you provide value in every interaction, and are tuned into the lifecycle a customer goes through and meeting them where they are at each stage, people will keep making that journey from unaware non-member to expert members—even evangelists.
“But what about my current members!” you’re asking. “How do I provide what they need when I’m busy chasing non-members?” Don’t be alarmed. None of this attention to non-members’ customer journey need detract from your service to the valued core—your dues-paying members.
The key value you offer your members is content and community—proprietary information that helps members solve their specific challenges, and opportunities to meet professional colleagues so that real-time, real-world problem solving can take place. “Free tastes” to non-paying members that convey the quality—but not the proprietary content and connections—available on the other side of the pay wall will convince a broader audience of the value of membership. Your ultimate goal is that members’ lives are transformed, and their businesses more successful, because of you. Then, they will educate the market for you.
The success of your association depends on the diversity and quality of the relationships it forms with customers along the spectrum of the customer journey. I’m not talking about networking or selling—I’m talking about investing in initiating, nurturing, and capitalizing on relationships with people for quantifiable return. It’s working in business; your best members are likely already applying this approach to springboard greater personal and professional success. To re-engineering your revenue model, focus on your member relationships.
1. Apply private sector best practices: Re-engineer your association’s revenue model for transformative growth by putting customers at the center.
2. Develop value offerings that align with the needs of customer/members at six stages in the life cycle: unaware, interested, engaged, informed, advanced, and expert.
3. Your fundamental source of value is your content and community. Let non-members get a taste, but reserve the best to transform the lives of dues-paying members. They’ll become evangelists, if you invest in your relationships with them.