The last of a three-part pricing series, this article focuses on alternative models for two important relationship and revenue streams for meetings: membership and sponsorship.
Relationships drive profitability when it comes to meetings and events. Engaged members attend in greater numbers and with greater frequency. When it comes to securing sponsors and partners, customized experiences that demonstrate a commitment to mutual long-term benefits deliver greater results.
Giving Members and Partners Credit for Their Dues
Pricing models for membership or sponsorship can be designed to help build stronger relationships. This requires a shift from the traditional idea that offering more benefits will result in more satisfied members or sponsors. The principal risk with "more" is that when it comes time for renewal, if a member or sponsor doesn’t see that they have used many of the benefits, they’ll question the value. The alternative to more, however, isn’t less—it’s customization: offering each member or sponsor the opportunity to select the benefits that matter to them.
Practically speaking, this can be accomplished by offering members or sponsors the opportunity to select from a list of potential benefits. Assigning point or credit values to the benefits allows each individual to select what is meaningful to them, while ensuring that the benefits remain equitable across all members or sponsors.
Holly Duckworth, CMP, CAE, president and chief connections officer of Leadership Solutions International, specializes in association leadership. Duckworth has noticed the pendulum swinging toward greater customization and more flexible options within association membership models. This provides benefits for members who place different values on benefits and can be a key driver in association retention.
Duckworth cautions, however, that increased customization brings a series of challenges. Associations will need to develop tracking mechanisms to ensure the delivery of the different member benefits. From an accounting perspective, these models will need to consider how to manage transfers between the association headquarters and local chapters, particularly if one of the options allows for members to derive the majority of their benefits at the local level. Duckworth also notes that customization requires greater effort on the part of the member when renewing or joining associations. In light of this, she recommends that association executives closely monitor the response and streamline membership application and renewal processes as much as possible.
Profiting from a Larger Membership Pool
More members mean more potential event participants, non-dues revenues, greater exposure for partners and a larger pool of potential volunteers: all good things for associations. Two pricing models that are being used to help rapidly increase membership are conversion from individual to organization-based models and a shift to a non-dues revenue focus that includes a sharp reduction in membership dues.
From an Individual to an Organization-Based Membership Model
One association that has converted from individual to an organization-based membership model is the American Institute of Steel Construction (AISC). Scott Melnick, vice president for AISC, saw the total number of members increase from approximately 1,200 to 25,000 members in just three years and they tripled their membership-based dues. Non-dues revenue, event attendance and publication sales also increased thanks to the larger pool of members.
Shifting to a Non-Dues Focus
Lowell Aplebaum, CAE, is the director, membership and councils at the International Facility Management Association (IFMA) and vice chair of the American Society of Association Executives (ASAE) Components Relations Council. Aplebaum has observed an important shift in the association market from reliance on dues-based to non-dues-based revenue streams. Importantly, he notes that there has been a simultaneous shift from membership value being based on traditional benefits to being based on relationships. These relationships might be with other members, association components (such as chapters), potential clients or suppliers or with the association itself.
Aplebaum notes that factors in these shifts include a reduced willingness to pay for membership dues from companies and organizations and greater difficulty in attracting and retaining Millennials and Gen-Xers. He further adds that while traditional benefits are often more tangible and therefore it is easier to measure their value, the value of a relationship is much more subjective. Aplebaum is supportive of models that increase the total number of members by establishing group or company-wide membership categories. As he states, "a larger pool of people drives non-dues revenues."
Aplebaum expressed concerns over moving towards free membership, also known as a freemium model, for associations. While he supports providing free access to specific tools or research that advance the profession, he notes that associations will need to have confidence in their ability to generate sufficient non-dues revenues to cover their bottom lines. He also comments that it is very difficult to later reinstate or introduce fees for previously free services.
Aplebaum does support pricing models that celebrate relationship milestones for association membership, including guaranteeing certain benefits after a pre-determined length of membership. He notes that it is more than a pricing offer—it is about recognizing and celebrating the relationship with the member.
Transitioning from Sponsors to Partners
Many meetings and associations rely on financial and in-kind support from sponsors. This support is increasingly difficult to secure, although there is a great opportunity to leverage customization to elevate the relationship from sponsors to partners. Sponsorship can be viewed as a transaction: a financial donation in exchange for a predetermined benefit. Partnership, on the other hand, involves collaboration to improve meetings, relationships and even the business environment.
Aplebaum believes that increased customization is the future of sponsorship and partnership models, with a particular focus away from logo placement to interaction with event or association audiences. He encourages associations to look at models that balance personalization with transparency to avoid real and perceived bias in the provisions of sponsor or partner benefits.
Richard Aaron, CMP, CSEP, president of BizBash Media and associate professor at New York University, also supports customization. He comments, "The conference planner must discover new ideas and angles to please savvy sponsors and not rely on the previous static print in the program and signage method alone." BizBash incorporates technology including apps and live floor surveys to develop meaningful benefits for sponsors.
Sponsorship and Partnership Pricing Models
Moving from a typical tiered sponsorship model to a customized model will require more hands-on involvement. The difficulty with the traditional tiered model is in matching what individual partners or sponsors might need and the benefits offered. A fully customized model involves one-on-one discussions with potential partners or sponsors and requires a collaborative process for determining benefits. I recommend this for top-level partnerships. The credit-based system is a hybrid option where sponsors and partners can choose from a list of benefits that are assigned credit values. This allows for equitable benefits across partners and sponsors without giving everyone the same benefits. This model can be easier and faster to administer than a fully customized model.
I see the transition to customization as an opportunity to build a dialogue with partners. In developing sponsor benefits, meeting planners should discuss adding elements that extend outside the confines of the event. Claire Smith, CMP, is vice president, sales and marketing for the Vancouver Convention Centre. She favors "larger, more long-term strategic partnerships that are not just about an event sponsorship but a longer, deeper relationship that has a number of different touch points throughout the year." Smith adds that she would rather sponsor fewer organizations, but go deeper with these partnerships "where both sides understand each other’s business objectives and we build a plan of how to work together where we both benefit."
Concluding Thoughts
Whether we’re discussing membership or partnership, or even registration for events as was explored in the first two articles in this series, pricing models have the potential to be barriers to building effective relationships. Creativity and customization focused on understanding the unique needs and preferences of our stakeholders can help transform these models from barriers to bridges that connect members, participants and partners. One+
Sobre la autora
Mariela McIlwraith is President of Meeting Change, a business consultancy that provides sustainable business planning for communities, associations and corporations, helping them to integrate corporate responsibility to improve business results. Mariela specializes in business strategy, pricing strategies for service industries and corporate responsibility. She has over 15 years of experience in the meetings and events industry and has worked in both Canada and the United States. She has consulted, presented, taught and written articles in the areas of event marketing, corporate responsibility, ethics and pricing. Mariela completed her Master of Business Administration (MBA) at the Sauder School of Business at UBC with a double specialization in Strategic Management and Organizational Behaviour and Human Resources. Mariela is actively involved in community projects, including Social Entrepreneurship 101: Africa, a Sauder School of Business Initiative designed to address youth unemployment and encourage the development of sustainable businesses though the delivery of business education to youth entrepreneurs in Kenya. She is co-authoring a textbook on CSR and ethics in the meetings and events industry to be published in 2012.
