Free Yourself from the 4 Traps of Non-Dues Revenue Development

As an organization moves outside of its comfort zone – core membership dues revenue – and into the area of non-dues revenue, it faces the risk of getting caught in four traps during the planning of that shift. Here’s an overview so you can avoid those traps and be more profitable as a result.

Trap #1: Ignoring the competitive landscape

Assuming that you have a “captive” audience – your members – from which you can generate non-dues revenue can be a costly mistake. True, you may be the only game in town when it comes to your core offering of uniting a profession, trade or industry, but you may already be trailing your competition in terms of other related services, like networking or professional development. 

A vast array of non-profit and for-profit organizations are your rivals for your members’ time, attention and money. They compete with a sharp focus on the market and what audiences want, and they are often more responsive than associations can be. So keep in mind that you will need an entirely new competitive analysis – and you will need to continually monitor it to understand gaps and identify opportunities. Being careful not to simply provide the same services everyone else does is a foundation of success.

Trap #2: Setting prices based only on cost - and too low

Using an ineffective pricing strategy can cause your association to lag other organizations. Classic pricing strategies are complex, but at the most basic level, it’s essential to factor in financial cost, the cost of your target audiences’ time and the return on their investment. Another integral element to consider is the “friction” – the expending of mental and emotional energy – that your audience goes through when accessing your services.

 Consider how today’s big banks are successfully reducing the friction of clients having to go to a branch. Imagine remembering to do an important transaction when it’s already midnight and then realizing you would have to go to a physical location to do it. This or any similar situation becomes a negative price factor for the product or service you are using.

All these aspects are important in coming to a dollar figure. In fact, pricing is a very specialized marketing discipline, all too often under-used by associations. Unfortunately, associations frequently do not have this discipline and, more commonly than not, they leave money on the table in an effort to price solely on a toe-to-toe peer comparison level, or worse, on gut feeling. Pricing based on the true, holistic value of your service is what will get you the most return on your investment. 

Trap #3: Short-changing your service delivery with "off the shelf" solutions

While associations share similarities in terms of issues and opportunities, each has a value proposition that is distinctive to its unique group of members. Who they are and what they expect of you varies; there is a “culture” associated with different professions, industries, and trades based on training, experience, the nature of their work and more.

If you approach your service delivery like everyone else, without considering your audiences’ wants and needs, it shows that you haven’t listened to them and you’re not concerned about finding them the right solutions. And set aside the misconception that you will require a large budget to customize your offerings. There can be simple and cost-effective ways to tailor your services. It’s time to accept that the service must be unique to your market (your members) for it to succeed in driving the revenue you expect.

Trap #4: Surveying your way to new products and services

Surveys are an anchor of any organization’s ability to listen to its audiences. However, while they provide quantitative analysis and are great at benchmarking longitudinally and assessing market size, among many other things, they are not reliable tools for keying in on what your audience actually wants. People don’t always know what they want, or at least aren’t able to package the answer into the neat bundles a quantitative survey may look for. Remember what Henry Ford supposedly said about developing the Model T: “If I had asked people what they wanted, they would have said ‘faster horses.’”

Surveys are an important tool but by themselves are not accurate in pinpointing nuances or anticipating your members’ unique needs.

What to do with this information today

Whether you are reviewing existing revenue sources or planning new ones, be vigilant for the four traps of driving revenue and be attentive to maintaining and constantly adjusting your products and services. Do that and you will be able to better develop and maximize your association’s non-dues revenue.