Monday, December 3, 2012

3 reasons to know your association’s RPM (Revenue Per Member)

What is Your Association's RPM (Revenue Per Member)?
When I interviewed Rob Fowler, president/CEO of the Small Business Association Of Michigan, for my September 20 post about SBAM’s freemium membership model, he talked about their Revenue Per Member or RPM metric.

It made me realize many association’s may not think about the importance of knowing your RPM. Or even of including RPM in your association’s metrics dashboard.

I’m on the board of a local professional association that charges dues of $195 and $34 for its monthly luncheon. Thus a member who attends eight meetings has an RPM of $467 ($195 dues plus 8 x $34 in meeting fees). (By the way, this is gross revenue.)

I would go a step further and determine you lifetime RPM. In the case of my local organization, if we assume the member remains a member for 10 years, her lifetime RPM is $4,670. If he remains for 20 years, his lifetime RPM is $9,340.

Calculating your association’s RPM may be more complex if you have additional programs and services that members buy. For example:

  • Annual dues (including any separate SIG dues)
  • Annual conference and/or trade show
  • Separate books, manuals or white papers 
  • Seminars, webinars or other special events
  • Political action committee donations
  • Certification, exams or other 
  • Donations to your association’s foundation
Track the RPM of each member (they will differ based on what each member “buys”). Now, track as a metric the average RPM? Your association may have a goal of increasing the RPM (by getting more people to attend the convention or buy products).

Why should you know and track this information for your membership?

  1. So you provide your Board of Directors an accurate tracking measure of the association’s membership efforts.
  2. So you know how much you can afford to spend to recruit and retain members.
  3. So you know whether membership is “paying its way” and know whether you need to increase dues and/or fees.

What are you doing to measure your membership program? What other reasons do you see for the RPM metric?

No comments:

Post a Comment