The Results from the Association Dues Increase Survey

To help build an understanding of the best practices related to raising membership dues, we did a primary research project this fall of association executives. The results are in and over the next week or two; I wanted to highlight some of the findings from our research and provide some commentary on what we found.

The first portion of the survey that I wanted to take a look at is how often associations raise dues. Here are some of the findings:

  • Two-thirds of association respondents indicate dues are raised as needed.

  • 18% of respondent organizations raise dues annually.

  • 34% of organizations have raised dues this year.

  • Almost 20% last raised dues in 2006 and about 15% last raised dues in 2005.

  • Associations primarily offering organizational memberships are significantly more likely to have raised dues in 2007.
Since the most common answer to when associations raise dues is “as needed”, there does not appear to me to be a pricing strategy employed by most associations. Instead, it looks like dues or price increases are driven by accountants not marketers. If dues are simply raised as needed, then the dues increase serves to back fill program funding needs.

Dues are the “price” that an association charges for membership. And price is one of the 4 p’s of marketing. It is the only one of the 4 p’s that actually generates revenue.

So ideally, dues rates should be part of the marketing equation for an association. They should not be raised simply to fund increase expenses or shortfalls from other programs. Dues should be strategically set to maximize either the number of members (lower prices) or the net revenue to the association (higher prices). This is known as price elasticity. There is an optimum price or dues rate for each association.

Let me know your thoughts on this. Should associations price membership to maximize their strategic goals?

By the way, for those of you who like the statistical backing for the survey, here is the methodology. The survey went to 10,347 association executives and we had 324 responses. The response rate for this project was 3.1%. This sample size of 324 carries with it a margin of error of +/- 5.4 percentage points. That means that if all the recipients were surveyed, we could expect that the results of that survey would not vary more than +/- 5.4 percentage points at a 95 percent confidence level.

2 comments:

Lindy Dreyer said...

I thought your post was very interesting. So often dues increases must be approved by either the board, the entire membership or both. That can be a major obstacle to an efficient, effective pricing strategy (unless your strategy is to lower dues.) The question every association needs to answer...Can the marketing point-of-view applied to dues increases be persuasive enough to convince the membership?

Tony Rossell said...

Lindy -- Thanks for the comment. In the for profit world companies strive for pricing equilibrium -- the point where you maximze revenue without losing customers. Ideally, an association and board should at least consider some of these issues. Tony