Tuesday, June 18, 2013

Leap vs Creep Philosophies for Membership Dues

Leap or Creep: It's Your Choice for Member Dues Increases

The other day Irene Spero, Chief Operating Officer of the Consortium for School Networking posed an interesting question on ASAE’s Small Staff e-group:

“We are thinking about raising the dues for one category of membership in our association. How far in advance of the increase do you notify members?  Do you have policies in place to grandfather existing members at the old rate if renewal occurs before a certain date? Interested in learning how others have dealt with this situation.”

The answer is “depends.”

  • Some associations delay dues increases for years ... and, eventually have to impose a major increase (this is the LEAP dues philosophy).
  • Other associations implemented small incremental dues increases annually or at least every two years (this is the CREEP dues philosophy).

If your association follows the LEAP philosophy, it probably makes sense to “announce” the dues increase.  If however, your association follows the CREEP philosophy, there is no real need to announce the dues increase.

The boards of several clients of my former AMC implemented the CREEP philosophy and increased dues small amounts every year.  These increases did not need additional board action UNTIL we reached threshold prices ... such $100, $250, $500, $1000.  When we got close to those levels, we invited board discussion about moving on to the next level.

Either way, you should encourage your association to adopt either the leap or creep membership dues strategy.  In most cases, no decision is a decision to leap.

By the way, I like these two responses to Irene’s question:

  • Dues went up several times during my tenure as CEO of an association - during that time, we never informed members of the increase, but simply billed them on their renewal. The increases were not large, and no one ever complained. Since membership went up by 50% during my 7 years there, I can only assume that the price point was not a barrier!  Now, as a volunteer Board Chair, our organization increased dues. My advice to staff was not to advertise the increase, but simply bill the new amount. 
  • We had a dues increase a few years ago that we felt was significant enough to require more than just invoicing at the new amount. It presented us with an opportunity to remind our members of the value we provide. The approach we took was that I composed a letter in which I talked about the fact that we had held dues flat for many years, during which time we had expanded our membership significantly. As membership expanded so did our members' demands on the organization. This success put added demand on the organization's resources and infrastructure, and thus we needed additional revenue to continue to meet the expanding needs of the members.
  • Just a note, we also decided at that time that it was a better idea to have regular small increases year upon year, rather than holding dues flat for years and then having to announce a big dues increase. If your members have an expectation of a 3-5% annual increase then it isn't such an issue. 

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