How to rethink your membership dues strategy and retain members
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As financial uncertainty brought on by the COVID-19 pandemic continues to permeate the global economy, association members are faced with the difficult decision of whether to renew membership. Many associations will need to reevaluate their membership dues strategy to align with the current economic landscape and retain members.
Why it’s time to rethink your membership dues strategy
Individuals and organizations are adapting to a new reality that is likely to last into 2021 and beyond. It used to be common for associations to have high retention rates for members who have been with the association for five years or more. However, from the research Avenue M has conducted, many tenured members are now reviewing their own usage of benefits and adding up the savings before making the decision on renewing membership.
Many members are scrutinizing how they spend their money and are beginning to evaluate what is “nice to have” versus what they “must have.” Additionally, some younger members who have traditionally filled the pipeline when older ones retire are no longer renewing their membership once their dues increase to the regular, non-discounted rate.
Members will allow their membership to lapse if they are not provided with alternative options for keeping it. As a transactional relationship between an association and its members becomes more common, associations will need to reach into their reserves and invest in building and maintaining long-term relationships with members.
Offering more flexible dues payment options
During the last recession, many associations experienced lower retention rates and had a tough time recovering the ground they lost. Today, it’s essential for them to do everything they can to keep their members, even if it results in a short-term loss in dues revenue.
One path that associations can take to ensure they retain members is offering more flexible dues payment options. For example, extending the time period for members to pay their dues may help retain some members who may need the extra time to make the decision on whether to renew. Both trade and professional associations have started to explore or implement this for 2021 as a way to ensure individuals maintain their membership status.
Other associations are looking to adopt new membership models as a means of being more flexible. Avenue M is currently working with two associations to develop a group billing program that maintains the individual membership but provides a tiered discount to the employer based on the percentage of staff they enroll as members. In both cases, the association may experience a small decline in dues revenue.
While this may seem risky, providing employers with a significant discount to help them save money may be the smarter long-term strategy. From our research with their members, we’ve learned that many employers are faced with the decision between reimbursing for membership dues and letting go of staff due to budget cuts. The obvious choice will be to stop reimbursing for membership dues. This isn’t a reflection on the value or importance of the association; rather, it is in response to the financial crisis many employers are facing as a result of the pandemic.
The risk of maintaining status quo
While offering more flexible payment options might sound like a huge risk, don’t forget to assess the risk of doing nothing. We all have a cognitive bias in which we express a preference for leaving things as they are over any type of change simply because we are focusing on what we might lose rather than what we might gain. Of course, there is uncertainty that comes with any change; however, it is important to recognize our own bias and keep this question in mind: is there a greater risk associated with maintaining status quo?
Taking the leap
Before determining whether or not your association is ready for a change to its membership dues strategy, first review a variety of scenarios such as: (a) doing nothing (i.e., maintaining status quo), (b) making minor modifications or adjustments to your membership dues and renewal program, or (c) significantly increasing the number of options to allow members to maintain their membership. Be sure to consider both your key metrics of success as well as the long-term financial implications of making a change. Once you’ve completed your scenario planning, collect input or feedback from both rank and file members as well as leadership.
After you’ve come up with a solution, don’t be afraid to modify it along the way. You shouldn’t wait too long to adjust or make a course correction if you choose the wrong course. Always be prepared to make changes as you move forward with the approach you feel best fits your organization.