As members age, lifetime membership becomes a critical question
By Jodie Slaughter
An association’s dues structure can be a lot like the cable television package you have for your home; it can be overlooked for years until finally someone asks, “Does this really fit our needs? Does this really make the most sense for us financially? Do we really need all of these channels?”
By evaluating the practice of Life membership in the broader context of its membership structure, this state CPA society was able to balance the ramifications of either retaining or eliminating that benefit with the ability to create ongoing value for members in every dues category. |
Your organization’s dues structure likely was a fair, sensible plan when it was created. Then, between day-to-day operations and times of membership growth, revisiting the dues structure probably became a back-burner issue. Maybe a decade went by, and suddenly, your structure no longer fairly represents your members or suits your organization financially.
A prime example of the unintended impact of dues structures can be seen with “Life” membership. Many associations will automatically convert members to Life membership when a member reaches a combination of age and membership tenure (e.g., a member’s age and tenure add up to 100). While Life membership can be an effective way to reward tenure and spread goodwill through your membership, it also can raise questions of equity with younger members and can severely impact revenue– especially as more members are working well past traditional retirement age.
For some organizations, the impact of automatically converting members to Life membership becomes a significant budget consideration. A large state CPA society addressed the question recently, as it realized that its policy of offering Life membership to CPAs with more than 40 years of tenure in the society was forecasted to cost the association well over $1,000,000 in membership dues in the next decade. The organization was also challenged by a complicated dues structure that was divided into 15 different categories and therefore decided to combine the question of Life membership into a broader investigation and restructuring of its dues categories.
Of course, a dues restructuring project can be a complex undertaking that drains everyone involved. For staff, it’s often a time-consuming quest to balance equity for members with a chance to enhance revenue for your organization. For members, it can be a confusing, frustrating process, which in turn can threaten your retention efforts and your word-of-mouth recruitment strategies. If approached correctly, however, dues restructuring can often be a solution to pressing fiscal and equity concerns. With a proper research plan, a rigorous modeling process and a thoughtful communication strategy, you can make fitting adjustments to your dues structure and maintain the goodwill with members that you have worked so hard to recruit.
By evaluating the practice of Life membership in the broader context of its membership structure, this state CPA society was able to balance the ramifications of either retaining or eliminating that benefit with the ability to create ongoing value for members in every dues category.
The society worked with McKinley Marketing to assemble a comprehensive research strategy that included interviews with key stakeholders, an electronic survey of current members, and a benchmarking study that looked at how other associations with similar characteristics handled their membership dues structures. This was linked with analysis of population trends and financial modeling to forecast the bottom line implications of society dues.
The research collected helped to inform a dues modeling process that provided financial implications for a variety of scenarios, as well as projections for how each scenario would affect staff from a communications and operations perspective. The models pointed to a number of viable strategies, including the consolidation of several dues categories and changing the rules of the Life membership category to stave off revenue losses that were projected for the society. As an alternative, the society phased in a fee-based model that still protected the goodwill it had established with its long-time members, grandfathered those in line for Life membership eligibility, but also closed the gap between the dues that were charged for more tenured members vs. CPAs who were new to the association and the profession.
Today, the organization has 10 membership categories – including the standard student, retiree and associate membership categories – at six different price points. The simplified structure emphasizes fairness among the society’s members, and the data collected helped the society plan a communication strategy that eased the transition to the new dues structure. As a result, the organization emerged from its dues restructuring project poised for future growth.
- Jodie Hirsch Slaughter is President and Founding Partner of McKinley Marketing, Inc., an association consulting firm with offices in Washington and Chicago. McKinley helps associations achieve their goals by applying data and sound business principles to problem-solving and works hard to be "Trusted Association Advisors."
This article is published in the Feb/March edition of Membership Developments, ASAE & The Center for Assocation Leadership's Membership Section e-newsletter.