Case Study:
Medical Group Management Association (MGMA)
Even a Nonprofit Should Price for Profitability
CHALLENGE 
The Medical Group Management Association (MGMA), the nation's principal voice for the medical group practice profession, has served its growing membership with innovative, competitive and high-value products for over 80 years. Yet MGMA was looking for a new, disciplined data-driven pricing strategy that could be implemented across many different program areas, audiences and product lines and would ensure ongoing value and growth.
MGMA sought McKinley Marketing’s expertise in devising a pricing strategy that would:
- Maximize non-dues revenue;
- Provide guidelines that would be competitive in the marketplace;
- Drive product life cycle;
- Ensure ongoing membership value.
APPROACH
Through a comprehensive review of past research and collaboration with MGMA staff, McKinley created a list of priority products to test in the marketplace on a pilot basis, and it provided recommendations and guidelines for MGMA to operate its pilot testing program. McKinley also constructed a customized dashboard that incorporated both the subjective and objective information available to MGMA and responded to the challenges of meeting member needs while balancing the core fiscal, strategic and operational needs of the association. The dashboard was designed to help MGMA identify opportunities for new product development, assess the current value and profitability of the product and membership portfolios and even assess the viability of products near the end of their lifecycles.
In addition to the dashboard, McKinley Marketing developed an extensive set of pricing tools to accommodate any type of MGMA product or life-cycle situation. The decision trees took into account factors such as perceived value, market demands, market prices and cost to produce as they led MGMA through a systematic evaluation of each of its products and services. The decision trees helped the association make many critical pricing decisions, such as whether to raise the price of a product (and by how much within a range), whether to bundle a product due to low performance and whether to enhance its promotional efforts to increase sales.
RESULTS
All of these tools and recommendations were compiled in a comprehensive pricing handbook for MGMA. The tools created by McKinley Marketing have provided MGMA with guidelines to identify a potential price range and set a proper price for each of its existing products. MGMA has already put the new tools to use on a larger scale, including using McKinley Marketing’s dashboard and decision trees to build the pricing structure for its upcoming Annual Conference.
IN THEIR OWN WORDS
“The McKinley pricing project helped create a uniform pricing strategy for the association. The tools provide a systematic way to ask the right questions and develop pricing recommendations and rationale. They give staff the confidence to price correctly and support their decisions to senior management and the Board of Directors.”
Dana Guilfoyle, Vice President, Communications and Marketing
Medical Group Management Association (MGMA)