The road to success for membership organizations has changed—and changed dramatically—over the past decade. What used to work doesn’t, and many organizations that haven’t updated how they operate are struggling with dwindling memberships and sliding revenue. In this post, I’m going to explore the main reasons the landscape has changed, and the three keys that are driving growth for today’s successful membership organizations.
How the Landscape has Changed
For years, many membership associations found success because they were monopolies; they offered a valuable commodity, members paid dues to have access to the commodity, and competition was minimal.
But starting in the year 2000, many associations who benefited from being monopolies would experience a barrage of challenges that would weaken their position in the marketplace and forever alter their futures.
- On March 10, 2000, the dot-com bubble burst. In just six days the NASDAQ lost nearly 9 percent. Hiring freezes, layoffs, and consolidations followed in several industries.
- On September 11, 2001, terrorists attacked. In the aftermath, many associations suffered substantial losses in meeting and event attendance and were forced to consider new options for delivering content and value to members, as well as being a resource to help their member businesses through these tragic times.
- On October 6, 2008, the Great Recession began. For the United States in particular, persistent unemployment, the continuing decline in home values, an escalating federal debt crisis, inflation, and rising gas prices would continue to plague the country for the next several years.
- On January 1, 2011, organizations braced themselves for the retirement wave. From now until 2030, every eight seconds someone will turn 65. On average, 10,000 people retire every day in the United States. As a result, many associations have been losing retiring members in droves.
Associations have forever been altered and forced to manage unprecedented change; the kind of change that substantially changed the way we work, live, and do business. Nevertheless, associations can rebuild their monopolies and be very successful in the years to come, as long as they can accept the fact that the rules have changed and that what worked in the past isn’t going to work anymore.
As in business, your association will create a monopoly on the market if, and only if, what you provide is incredibly valuable and the competition is minimal. There are three components to consider when rebuilding any monopoly:
1. Find Your Niche
A few years ago, I was hired by a trade association that was struggling to grow membership. When asked about their current and prospective members, the executive director rattled off a list of 10 different markets, representing a variety of industries in a variety of locations. When I asked him to narrow his answer down to one audience, he couldn’t do it.
Likewise, a regional business association I was working with hadn’t seen an upswing in membership for seven years. When I asked the president about their target market, she told me the target market was any and all businesses operating in a 75-mile radius of the city.
In both of these situations, the prospective market for these organizations was gigantic! One would think they’d be capable of drawing in hundreds of new members each and every month, and yet they both struggled to recruit even a dozen, and retention was also on the decline.
Why? Because trying to be all things to all people is a sure way to fail.
The association of yesteryear focused on quantity; getting as many members as possible without alienating anyone. When you take this route, you will find more competition, your approach will be generalized, your information will be watered down, and you will be doing twice as much work just to keep up.
This isn’t a one-size-fits-all world anymore. Define your audience and seek to be the expert and go-to resource in that niche.
2. Build the Right Culture
Throughout my career, I’ve had the opportunity to interact with associations worldwide. I can tell you with absolute certainty that culture makes a significant difference in how effective your association is at recruiting and retaining members and generating revenue.
Culture is not something you can actually see, yet it is in the environment and experiences your association creates for its members. In many ways, culture is like personality. It’s the values, beliefs, underlying assumptions, experiences, and habits that create your association’s behavior and ways of working together.
Here are a few red flags that will pop up when culture is a concern: high turnover; difficulty recruiting or retaining members; negative feedback; emotional outbursts; declining attendance.
Culture matters because younger generations are driven by personal happiness. Raised amidst terrorism and recession, they seek to control their environments and refuse to engage in anything negative, challenging, or draining of their time and energy.
If you suspect your culture has taken a turn for the worse, it may be time for a change in leadership, team-building training, member survey, staff retreat, coaching—anything that may help your organization pinpoint the source of negativity, effectively resolve conflict, or improve member relations.
3. Prove Your Value
Going forward, your association will have to answer less to people who willingly pay dues “because it’s the right thing to do” and more to people who continually ask, “What’s in this for me?”
How do you prove the value of a membership in your association? This question is less about number-crunching and more about marketing.
Younger generations are your toughest consumers. They want to associate themselves with a cause. They want to be inspired to make a difference. So, does your association represent independent gas companies (yawn) or is it helping bring cheaper gas to the United States quicker (wow!)?
Consider what would happen if your association didn’t exist. Sometimes it’s better to think about a world where your association doesn’t exist because that’s where the real passion and the stories that need to be shared exist.
Throughout history, membership associations have been challenged. Founded as communities with shared values and interests, associations have survived because people need one another. They prospered because they were monopolies; demand was high and competition was minimal.
Associations have been capable of overcoming war, tragedy, and economic ruin. Their ability to thrive in the face of tragedy gives us hope for the future of today’s associations. Rebuild your association’s monopoly with the needs of the members and the changes in the marketplace in mind, and you will be successful.
Sarah Sladek is the CEO of XYZ University, the only company in North America that specializes in helping organizations engage younger generations. She has presented on the generational topic to audiences worldwide, and is the author of several books, including Knowing Y: Engage the Next Generation Now (2014), The End of Membership As We Know It (2011), and Talent Generation, which will hit shelves in the summer of 2017.