2012 association corporate membership whitepaper 10-17-2012

To lure corporate members, construct packages that offer

value beyond discounted individual employee memberships

2012 Association Corporate

Membership Packages Study October 2012

EXECUTIVE SUMMARY

When seeking to attract companies to join an association with individual members, a strategic

choice is whether to include and discount pricing of individual memberships for company

employees or to include value-added benefits not otherwise offered to individual members.

Analysis of 29 corporate packages offered by 15 national trade associations shows 19 include

discounted individual memberships. The median package discount is 15% of regular member

dues. Ten of the discount packages add benefits tailored for companies; their median discount is

4%. Nine other packages effectively price included memberships at a stunning 112% premium!

Association leaders are encouraged to pause before just discounting. New revenue may not

cover marginal costs. Discounting can signal that a corporate member gets no extra value by

joining. It positions the association as competing on price, which undercuts the likely reality that

the association provides unique high-value services to members.

Many benefits can be provided at little or no added cost. If benefits are significant to companies,

they potentially can enable a premium dues structure that will more than cover the cost of

providing the benefits and exceed any non-dues revenue foregone.

We believe benefits that deliver exposure and knowledge are more compelling than discounted

individual memberships. When crafting corporate membership packages, start with and build on

all the value that the association can deliver to members.

Lee Crumbaugh, SMP, President

Office 630-469-8088 | Cell 630-730-9619

[email protected]

www.forrestconsult.com | www,strategicbusinessleader.com

2 | P a g e © Forrest Consulting, 2012. Permission to reproduce this report is granted, so long as credit is given to Forrest Consulting.

To lure corporate members, construct packages that offer

value beyond discounted individual employee memberships

2012 Association Corporate Membership Packages Study

At Forrest Consulting, we provide leaders with direction, resources, support and counsel to transform small

and medium sized businesses, associations, non-profits and other organizations into top-tier, growing, high

achievement entities. One area of focus is helping associations develop revenue and membership.

WHY THIS STUDY?

We were asked to develop corporate membership pricing recommendations for a national trade

association with individual professional members. The leadership of the association viewed the

current corporate membership offering as ineffectual and not providing companies any incentive to

join the association. The leadership presented this situation as a pricing problem.

What we learned from our research on pricing of corporate membership packages dovetails with

previous work on pricing and aligns with our understanding of value propositions, positioning and

branding.

We believe in sharing significant research findings when possible. In this case, after removing the

proprietary and confidential aspects of our work, valuable insights remain on association corporate

membership packages and we are sharing them in this 2012 Association Corporate

Membership Packages Study. We believe our findings will be of value for those leaders who are

responsible for the success of associations or other individual membership organizations seeking to

attract corporate members.

OUR RESEARCH

A common method of pricing membership for companies that join associations with individual

members is to offer the company a dues discount for its employees that join as individual members.

To understand how this discounting approach is applied and its effects, through Internet research

we identified 15 national or international trade groups with individual membership that, combined,

offer 29 different "membership packages" for corporate members. (Lest one think seeking

corporate membership will yield small benefit, we estimate the median share of dues coming from

corporate members is around 50% for the subset of the associations analyzed for whom dues

revenue by type of member can be estimated.)

Two-thirds the packages analyzed include discounted individual memberships. Looking at all 19 of

the discounted membership packages, the median package discount is 15% of regular member dues.

For those 10 packages that offer no added benefits for corporate members beyond discounted

individual memberships, the median package discount rises to 24% of individual member dues.


The trade association for which we undertook our research charges corporate members a steep

250% premium on the price of the individual memberships included in the corporate package.

Having identified this anomaly, it would be easy to say to the association leadership "Go no further!

Do as many others do. Discount the individual memberships included to correct your pricing to

make your membership package appealing to companies." However, that is not the approach we

took.

Why not? Discounting in and of itself can create or contribute to three problems:

1. Discounting individual member dues will mean that the resulting dues received

will contribute less to defray the marginal cost of serving each new individual

member. For the trade association in question, we estimate the marginal cost of serving a

new individual member to be $219; a suggested corporate dues package would recover only

$162 per added member (versus regular member dues of $195). While in and of itself this

decreased contribution may not be alarming due to the availability of other sources of revenue,

concern about the revenue shortfall from each

corporate member is appropriate, given that each

new individual member gained as a result needs to

be served.

2. Discounting alone is naked "selling on

price," a strategy typically used for

undifferentiated commodities and by mass

retailers and others in highly competitive markets.

It usually results in low margins and

communicates that a corporate member receives

no added value by affiliating with the association

beyond the discounted individual memberships.

3. Discounting likely miscommunicates the

association's value proposition. It positions

the association as competing on price, which

undercuts what for the vast majority of associations is the reality, that the association provides

unique high-value services to members.

So what is the alternative to just discounting included individual memberships? Looking further

at the analysis of membership packages offered by the 29 associations:

In nine cases, the discounted membership feature is joined with a set of value-added benefits

specifically aimed at corporate members.

In seven cases, value-added benefits are offered and the effective cost of individual

memberships included is actually priced at a premium over regular individual member dues.

"Products and services for an

association are typically

industry specific and not easily

duplicated. They cannot be

purchased at the local Wal-

Mart. That means there are

usually opportunities to raise

prices without a commensurate

decline in sales." Tony Rossell,

Marketing General, Inc.


For all packages, looking just at package price versus the price of individual memberships included,

pricing varies wildly. The deepest discount is 92%. The steepest premium is 770%. For all

packages, the median discount is 4%. Just over half the packages include value-added benefits for

corporate members.

Yet, despite the premium/discount variation, the level of premium or discount and the inclusion of value-

added corporate member benefits are generally associated. This linkage is obvious in the chart below,

which displays the imputed discount or premium for the 29 packages and also shows whether the

package includes significant value-added corporate member benefits or if it offers little or no added value

beyond individual memberships.

The following table breaks out the packages by their characteristics: discount or premium (or no

discount) pricing and whether value-added corporate benefits are included.

-100%

0%

100%

200%

300%

400%

500%

600%

700%

800%

A-1

A-2

A-3

A-4

B

C-1

C-2

D-1

D-2

D-3

E-1

E-2

F-1

F-2

G-1

G-2

H-1

H-2

H-3

I-1

I-2

J K-1

K-2

K-3

L-1

L-2

L-3

M

Pre

miu

m /

Dis

cou

nt

Corporate membership packages

premium/discount for individual memberships

and value beyond memberships

Average:

48% premium

Median:

4% discount

Minimum:

92% discount

Maximum:

770% premium

Package value

beyond

individual

memberships:

High added

value

Low or no

added value


Discount or premium on individual memberships, by package characteristics

Package description

Package pricing versus regular price for individual memberships included

All (29)

Discounted pricing (19)

No discount

or premium

pricing (2)

Premium pricing

(8)

Value- added

benefits (16)

Discounted pricing and

value-added

benefits (9)

Discounted pricing, no

value-added

benefits (10)

Premium pricing

and value-added

benefits (7)

Average 48% -26% 0% 246% 93% -25% -27% 246%

Median -4% -15% 0% 112% -4% -4% -24% 112%

Minimum -92% -92% 0% 35% -92% -92% -53% 35%

Maximum 770% -4% 0% 770% 770% -4% -5% 770%

We believe the most important finding of our research is that associations that include

value-added benefits in their packages can charge significantly more for the individual

memberships included. On the surface, this may not be apparent: Both for all packages and for

those packages with value-added benefits, the median discount is 4%. But consider the following:

Looking at all the discounted membership packages, the median package discount is 15% of

regular member dues. For just the discounted packages with value-added benefits, the

median discount drops to 4%, an 11 percentage point increase in package pricing.

The premium packages can charge a premium because they offer value-added benefits. The

package for the association for which we performed this analysis is the only one that

charges a premium without offering value-added benefits - a tactic that has not attracted

company members. Excluding that case, the median premium charged in value-added

packages is a stunning 112% over regular dues for the individual memberships included!

In sum, whether in a discounted or a premium package, including benefits enables higher pricing.

NATURE AND COST OF CORPORATE BENEFITS

Obvious questions are: 1) What benefits are likely to attract corporate members? 2) What will the

cost be to offer these benefits?

This study does not address what benefits will attract companies. This partly depends on the field

the association serves and the type of companies within its scope. Yet, the 29 packages do show

some commonality in benefits offered and offer many options to consider when constructing value-

added packages.

While the costs of benefits included certainly vary widely, the packages include a host

of benefits that presumably have value to companies and yet can be provided at little

or no added cost to the association. Here is a list of presumably no-cost or low-cost benefits:


Benefits presumed to be of low or no cost to the association

Recognition / Marketing

Premium status (first or more prominent in list) in any

recognition of members

Exclusive sponsorship opportunity

Press release upon joining Opportunity to sponsor webinar

Recognition in newsletter Ability to submit relevant posts for blog

Member spotlight in newsletter Listing in annual conference publicity

Recognition on website Listing in annual conference program

Member spotlight on website Recognition from podium at annual conference

Corporate member names and logos appear on

association literature and on home page

Recognition on annual conference signage

Logo on website banner ad Priority consideration for sponsorship at conferences

Featured in online list of member organizations Priority consideration for exhibit space at conferences

Searchable directory profile as corporate member with

link to organization’s website and contact email address

Opportunity to welcome annual conference attendees

Optional listing in online vendor guide Featured listing in speakers bureau

Free posting for relevant company events such as

webinars on industry events calendar

Priority for speaking opportunities at seminars,

conferences and other events

Ability to post content on website Can serve as webinar faculty

Opportunity to submit articles for newsletter May use appropriate member logo on website and print

collateral to indicate membership

Opportunity to publish white papers or business case

studies to the members-only section of the website

Professional support

Participation in on-line Communities of Interest Right to initiate member interest groups or projects

Access to the member support network

Information

Research library access

Access

Can join boards and committees Access to certification program

Eligible to participate in roundtables and forums Can contribute to speakers' bureau

Eligible to join special interest groups Can chair chapter

Access to members-only discussion list Membership on advisory council

Staffing/jobs

Free job postings on job board Free résumé posting on website

Job postings on the "featured jobs" section of website

Other

Discount on meeting room rentals Discounted conference call rates

Discount at bookstores


Other benefits can cost the association, either because of the time, effort or expense of providing

them or because by giving them free or at a discount to corporate members the association

foregoes revenue it otherwise could generate by selling these offerings to the same companies or

their employees as non-members. Yet, if these benefits are truly significant to companies,

they potentially enable a premium dues structure for corporate membership that will

more than make up for the cost or foregone non-dues revenue. These benefits from the

corporate packages analyzed may require undertaking new activities or foregoing other revenue:

Benefits that may require undertaking

new activities or foregoing other revenue

Recognition / Marketing

Web banner ads Free or discounted conference exhibitor registration

Ad in conference program Booth discount at conference

Sponsor credit for events / publications Complimentary exhibit space

Discount on sponsorships

Professional support

Knowledge exchange access Complimentary surveys

Access to research and benchmarking studies Research support on projects

Exclusive research hotline access Quarterly thought-leader roundtables

Free "Ask the Experts" consultations Free access to "corporate members only" session and

reception at conference

Participation in research and benchmarking studies

Information

Unlimited access to members-only web content Free books

Newsletter and updates on selected areas of interest Subscription to full reports and raw data

Subscriptions to members-only digital publications Subscription to specialty area monitoring tool

Subscriptions to members-only publications Peer reviewed articles from industry journals

Access to white papers Discounts on various industry related publications

Free "corporate members-only" webinars

Access

Events registration discounts Access to webcast

Free or discounted participation in events and training Discount for on-site and web-based training

Invitations to members-only meetings and receptions Free or discounted fee for certification fee exams

Discounted registration at conferences Discounted certification exam retake fee

Passes to annual conference Free entries into the annual awards

Savings on last minute seating offers of popular seminars Free membership in local chapters

Preferred pricing on seminars Discounts on various industry related events

Discounted registration fee for conference workshops


TO TIER OR NOT TO TIER?

A final feature we looked at in the packages analyzed is if and how the associations tier their corporate

offerings. The table below shows that most of the associations analyzed offer tiered corporate

membership package options whether or not the packages include value-added benefits. However, little

consistency is seen in the number of individual memberships included in each tier. (Nor, as previously

noted, is consistency observed in the premium or discount pricing by tier based on the number of

memberships included).

Tiering of corporate membership packages

offered by 15 associations

Package

type:

Individual

memberships

only or

significant

value-added

benefits

Number

of tiers

(omits

special

segments

e.g. non-

profit)

Basis for tiers: If individual

memberships provided, # of individual

memberships included in each tier; If

company revenue, revenue for which

each tier applies

Premium/discount per

tier based on individual

memberships included, or

breakeven point by

tier for individual

memberships based on

regular dues versus

package price

Value-added 4 Individual memberships: 3 / 4 / 5 / 6 37% / 89% / 229% / 449%

Value-added 3 Individual memberships: 10/20/1940 35% / -4% / -4%

Value-added 3 Individual memberships: 1-6 / 7-15 / 16+ -4% / -4% / varies

Value-added 2 Individual memberships: 1-50 / 50-100 -90% / -92%

Value-added 1 Individual memberships: 5 +770%

Value-added 3 Revenue: <$500 mill / $500 mill-$1 bill /

>$1 bill Breakeven membership: 13 / 26 / 39

Value-added 3 Revenue: <$5 mill / $5 mill-$100 mill / $100 mill+

Breakeven membership: 15 / 30 / 45

Value-added 2 Type of company: small business /

corporation

-13% / -13%

Mixed 2 Individual memberships: Unlimited / 4 -15% / 112%

Memberships 3 Individual memberships: 5-25 / 25-50 / 50+ 0% / 5% / 10%

Memberships 3 Individual memberships: 25 / 50 / 100 -40% / -46% / -53%

Memberships 2 Individual memberships: 4-9 / 10+ -22% / -30%

Memberships 2 Individual memberships: 5-14 / 15+ -18% / -26%

Memberships 1 Individual memberships: 10 -0%

Memberships 1 Individual memberships: 10 156%


VALUE, NOT VALUE-ADD

It's clear that associations can achieve the greatest attraction for companies by offering more than just

less expensive memberships for employees, by also delivering value for the company overall as well as

for involved employees.

In fact, we contend that in most cases the least-compelling reason for a company to join an association is

to get employee membership discounts. We believe benefits that deliver exposure and knowledge are

more compelling than discounted individual memberships in attracting companies to join an association.

Decomposed, we see corporate membership potentially involving three major pieces:

1. Reduced rate individual memberships for company employees - typically a small financial benefit.

2. Recognition and exposure for the company - a potentially larger marketing/image benefit.

3. Industry/specialty tools, insight, peer and thought-leader connections, access to talent and

counsel to help drive the company to greater success - a potentially huge strategic benefit.

To express the full-value of corporate membership, the corporate membership offer should

communicate a message along these lines: "Your company should be an XYZ Association corporate member

to get the best thinking, be exposed to the newest tools and approaches, get connected with thought leaders,

progressive peers and great talent, get expert counsel and be recognized as a leader. We make it easy through

your choice of value-packed packages that give your organization wide and easy access to all that XYZ

Association offers and great exposure to the industry [or specialty]."

The answer to the question, "join or not," whether for an individual or a company, does not start with

price. It start with the value delivered through membership. Only when this value is understood should

the decision point move to price.

When seeking to attract corporate members, start with and build on all the value that

the association can and does deliver to members, individual and corporate.

______________________________________________________________________

We welcome your thoughts on this research.

Since 1988, Forrest Consulting has worked to build to build successful associations and non-profits through

counsel and services focused on:

Strategy, planning and implementation.

Brand, client/member/stakeholder, and revenue development.

High performance and transition.

See our website for more information: www.forrestconsult.com.

For help in building your organization, please contact us for a consultation. We'll listen and explore your

needs and opportunities to see how we can help your organization achieve more.

2012 association corporate membership whitepaper 10-17-2012

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