Tuesday, July 16, 2013

Free is a strategic option for some associations

Years ago, Charles Rumbarger, CAE, told one of my groups “everyone in your industry is a member of your association, just some of them ain’t paying member dues.”

Why is that?

Because if “lobbying or advocacy” (state or national) is one of your core missions, everyone in your industry benefits whether or not they are paying your dues.

If your association conducts industry-wide research and/or marketing, everyone in the industry benefits not just those who are paying dues.

So, every association who conducts programs that benefit the industry (or profession) as a whole struggles (whether they know it or not) with the fact that one doesn’t have to join or pay dues to benefit from the association’s work.

And, if that is your situation, then a freemium strategy (which is a combination of free and paid memberships) may deserve serious consideration.
  • When I was at a major national association, we converted our monthly magazine from a members-only publication to a free, controlled-circulation magazine. In giving it away free to members and qualified non members, ad revenue increased from $85,000 to $3 million. Unexpectedly, total paid membership doubled. A few years after I left, the association sold the magazine to generate cash. Interestingly, its membership has dropped back to the pre-magazine levels. Coincidence?
  • In creating a "free membership category, the Small Business Association of Michigan was able to seek political action committee (PAC) donations from its free members. And, contributions to its PAC fund tripled, allowing SBAM to increase its advocacy programs benefitting all small businesses in Michigan.
  • Many agricultural commodity (beef, eggs, soybeans, pork, dairy, etc.) organizations focus on marketing and research programs that benefit the entire industry. After seeing voluntary funding programs fail because not all farmers participated, most commodity groups successfully initiated state or federal checkoff legislation through which every farmer selling the commodity pays into the research and promotion fund.
Adapting a freemium strategy is not something for all associations but Rumbarger’s “they ain’t paying dues” suggests it should be considered by some associations.

Who are likely candidates?
  • If advocacy is a primary mission of your association, you know that the benefits of your lobbying benefit everyone in the industry, not just your members.
  • If marketing and industry promotion is a primary mission of your association, you recognize that you cannot restrict the benefits of your marketing to only your members.
Despite many squealing about giving membership away, some associations may find the freemium model helps it achieve mission critical programming that benefits the entire industry.

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