What are membership dues?
Historically, membership dues have represented the primary revenue source for associations. During the last decade, as associations struggled to build membership, they focused on programs designed to generate non-dues revenue. Recently, associations have recognized that membership dues, in combination with other revenue sources, are an integral part of the overall financing solution necessary to provide superior, sustainable levels of service.
Fundamentally, people do not pay membership dues just to receive discounts on association products but because they wish to join a community of peers. Membership dues represent the financial investment of the individual in belonging to the group. The amount of dues they pay represents the dollar value they place on this affiliation with their professional community.
Why do associations use membership dues?
Inherently, membership dues are the primary financing option of associations because they provide a stable funding source for the creation and maintenance of the association and help create a clearly defined market for the sale of association products.
By collecting membership dues, associations force members to make a financial commitment to the association. In essence, the association asks the member to invest in the long-term stability and growth of the organization. This investment creates a bond or affiliation between the member and the organization, which the association can leverage to achieve the broader mission and specific strategic objectives.
Specifically, membership dues can be used as a marketing device in some of the following ways:
Membership dues represent an extremely high value revenue source. Membership dues have some of the following advantages:
Membership dues create a stable, predictable resource base for the support of association operations and activities. As a result, membership dues must often be adjusted to reflect the realities of operational and programmatic changes.
What limits the use of membership dues as a revenue stream?
Membership dues as a financing tool are limited in several respects:
How do you evaluate the use of membership dues?
Few associations review and implement strategies that integrate membership dues into the pricing and delivery of other association products and services in a coordinated manner.
It is important for the association to look at the entire pricing package of the organization and coordinate the cost of dues with the price of conference attendance or product purchases to avoid several issues.
You must integrate the use of membership dues with the other strategic initiatives of the organization. Membership dues must reinforce the success of all other activities.
The end goal is to create an affiliation between the member and the organization and establish a defined market for the sale of additional products and services. This provides for a growing, predictable revenue stream to maintain member services and pursue new initiatives.
There are several different methodologies for reviewing how the association uses membership dues as a financing tool.
When are membership dues most important?
Membership dues as a revenue source are most important to associations that reflect some of the following characteristics:
How might your association use membership dues as a funding mechanism?
When reviewing the membership dues strategy consider several questions.
Many association executives face the issue of a dues increase with trepidation. Your board must understand that dues are only one component of a portfolio strategy for revenue generation. By developing multiple sources of revenue, including dues, for the association, you avoid relying on a single income source and increase your options for generating the revenue necessary for new initiative or improved service.
In conclusion, members who are resistant to paying dues might not be unwilling to pay more money for services; they just might be unwilling to pay you versus one of your competitors.
Dean A. West
Dean West is President of Association Laboratory, a Chicago-based consulting firm that specializes in the creation of marketing and organizational strategy for associations. He can be reached at firstname.lastname@example.org or by calling 312.466.5702.
What We Do |
Association Laboratory Experience |
Press Releases |