Does Wal-Mart Announce a Price Increase?

We have all seen the Wal-Mart commercial announcing that prices are falling. But it occurred to me that I never see Wal-Mart or almost anyone else in the consumer world announce that prices are rising.

So last week while I was working on an article about pricing for the March issue of FORUM magazine of the Association Forum of Chicagoland, I dove back into the data from our Dues Increase Survey. I compared associations that said they announced and justified a dues increase to members to those who did not announce it or attempt to justify it.

The survey supports that silence may indeed be golden. It turns out that associations who raised dues but gave members no justification (i.e. to pay for new programs or advocacy) for the dues increase and those that did not make an announcement about the increase where more likely to subsequently see membership grow compared to any other option.

For example, groups that gave no justification were 33% more likely to see membership grow than those who justified the increase to support additional advocacy. And groups who made no announcement of a dues increase were 84% more likely to see membership grow compared to those who announced the increase at their annual convention.

For those of you who never want to hear about the dues increase research again, I promise to move on to other topics. For those who want a copy of the research, send me an email and I will provide it to you.


Vinay said...

There are 2 types of people. Those who shop at bargain basements stores and those who shop at other types. Those who shop for price and those who shop for value.

Who do we want to serve?

We have to decide and then treat them accordingly. In the end, members join for value, not so they can pay low dues.

Imagine for a moment, two guys, Vinay and Tony, in two different professions let's say, meet up at a neighborhood party and the following conversation comes up:

"Vinay: Hey Tony, I pay only $10 as dues for my association, how much do you pay for yours?

Tony: I pay only $8.

Vinay: Darn, your dues are $2 less then mine. I am going to go ahead and drop my association membership and join yours instead?"

OK, you get the point.

Honestly, real value is what members want.

For example, I am a long standing member of ASAE, my wife a member of American Academy of Pediatrics, my dad belonged to NSPE. None of really know what our dues are. We get the notices, we pay them. As long as we continue to get value, dues is just not an issue.

Unfortunately, I think we too often make it an issue, when it's not called for. My suggestion is to instead spend time and energy on identifying members challenges and then coming up with solutions and then conveying all this to the members.

And as in business, if you get a client on price, you will loose them on price. Do we really want such clients? Same applies to members, in my opinion.

Tony Rossell said...

Vinay -- Good point. It appears that the data from our survey would support the idea of not focusing on price. As I noted, those associations who felt that they did NOT need to justify a dues increase to their members were more likely to see membership grow. As you know, I am a big believer in basing marketing decisions on data instead of on my personal perceptions. If we do good research and set up valid market tests, the market will tell us what is most effective. Tony

Kevin said...

Tony, great post and I'm not surprised at your findings. I'm not sure why so many association people feel an instinctive need to justify their costs at all times (both staff and volunteer leaders - yet I've found the volunteer leaders more likely to feel the need to explain, for some reason). Increases are increases - unless you're doubling your dues or something equally outrageous, it's best not to mention it.

I see the same issue with many associations who insist on including letters detailing their successes or benefits with dues billing notices. We stopped including letters with bills years ago and found our response quickened significantly - people were much more likely to pay their dues on the first notice. To me, it makes perfect sense -- letters go in the "to be read" pile (most of which later goes straight into the trash) while bills go to accounting to be paid.

My usual disclaimer - I am a trade association professional, it may be different for professional societies. But I'm a member of a professional society, ASAE, and every year when I get their bill I recognize what it is and don't even open it, I just pass it along with the rest of the bills to be paid (so, if they are including anything with it, it's lost on me).

Ben Martin, CAE said...

Tony, you hit the bullseye again. Nice post. We haven't raised dues at our association in about 10 years. If we decide to raise them this year, I will recommend we say nothing about the increase.

Lindy Dreyer said...

How does saying nothing affect the trust issue we started talking about the other day? Especially if, like in Ben's situation, you haven't raised dues in 10 years...seems like a recipe for bad word of mouth.

Vinay said...

Lindy, very valid thought. I think about such issues as well. Having said that, in my mind, trust issues comes up only if one is doing
something wrong.

I personally don't see this as wrong. After all, costs of doing business increases ever year, e.g. staff salaries need to go up so they can keep up and we continue to retain good staff, and so on. As long as we continue to provide real value and of course keep cost increases to reasonable & justifiable levels (e.g. inflation rate), we are not doing anything wrong.

In fact, I don't see how one can stay up to date and run an
organization without increasing dues. Having said this, if the
question does come up, we should be ready to give an explanation that any reasonable and rational individual will understand. For if
they are benefiting by the organization's existence, I am sure they will support these reasonable increases that help to keep the organization healthy and strong.


Tony Rossell said...

Kevin -- Thanks for the practical feedback from your experience. I agree with your comments. If a member does not have a good sense of the value that you have delivered over the course of the year, then a letter telling them in a renewal notice is too late. It is like a waiter providing poor service until he delivers the bill to your table. Tony

Tony Rossell said...

Vinay -- Your answer to Lindy's question is well stated. Also, don't forget, when that renewal notice arrives the member has no obligation to pay it. If they think that it does not match the value that they have recieved over the previous year then they can decline. As we saw in ASAE's Decision to Join, lack of value is the single biggest reason members do not renew membership.

Thanks everyone for the great discussion. I am finishing up a post today that should also generate some interesting feedback. Tony