Tuesday, September 11, 2012

Is there a "magic" price for association memberships?

Dynamic pricing graphic from The Wall Street Journal
Over the last 34+ years in association management, I've watched associations struggle over where to set member dues and how often we should change dues. We've had the wait and leap philosophy versus the “steady creep” model of small annual dues increases.

Last week I heard/read two pieces of information that may challenges our traditional member dues models. (By the way, the same challenge applies to conference registration fees, webinar fees and any other pricing decisions at your association.)

First, during a session at the Content Marketing World Conference, Jim Kukral of Internet Marketing for Business, mentioned that one of the advantages of publishing your book on Amazon was that you can change the pricing of your book as often as you want. And, Jim shared that he frequently changes the prices of his books usually to check price points but sometimes to generate more revenue.

Then, I read a Wall Street Journal article titled "Don't like this price? Wait a minute." The piece focused on "dynamic pricing" strategies which started in airlines and hotels and is now moving into retail. One firm, which said it manages pricing for 400 brands, changes prices on two million products every hour ... yes that's 2,000,000 every 60 minutes!

I remember when we tried to negotiate hotel contracts to add a clause that they wouldn't offer rooms at a rate below our room blocks. We were all afraid someone would find out!

Most associations have offered some form of variable pricing scheme for years. Right? Example: Early registration versus late registration fees. Member rate vs non-member rate.

Well, our members and prospects are experiencing dynamic pricing every day in every way.

So, my question, is why do membership associations feel we need to set our dues levels and fees for a full 12 months?

Could we improve our revenues or increase memberships, conference registrations if we established some type of dynamic pricing strategy?

At some point during the process, we've covered our fixed costs for memberships or events. Once we reach that point, would it make sense to lower dues or fees so we can get more members or more attendees? Or, do we follow the airline and hotel model and increase prices when we approach selling out?

Hummmm ... What do you think about association pricing? Has your association experimented or adapted dynamic pricing? If so, please share in the comments section.

The YMCA of St. Louis promotes its special (flexible) member dues pricing system
After proofing this post, my wife Barb noticed a YMCA ad (above) in the St. Louis paper ... not that they seem to have created a flexible dues pricing system to encourage new members.  

No comments:

Post a Comment