When Cutting the Budget is No Longer the Answer

What a difference a year can make. On March 5, 2009 the Dow Jones hit a low of 6,594.44 and gloom abounded. Today the economy is still struggling, but there is light at the end of the tunnel.  

If the number of calls and inquiries that I am getting are any indication, then I think many membership organizations have realized that they have cut all of the expenses that they can. The only option now for fiscal health is to grow revenue.

A recent article in Industry Week by Cory VanBuskirk echoes this perspective.

“Here's the good news:” he writes, “So far, you've been able to survive one of the worst economic downturns in American history. Before you congratulate yourself, you need to face the bad news. The very things that have enabled you to survive will cause your downfall if you don't shift into growth mode now.”1

VanBuskirk goes on to say, “If you're going to make a successful shift back into growth mode, you have to retool the organization for driving revenue vs. saving money. It's time to realign people from efficiency to customer-driven effectiveness. Don't underestimate the differences between these two approaches. Resources, talent and priorities must flow toward revenue drivers.”2

Have you and your organization made the shift from cost cutting to growth? If you are ready to start growing, here are some tips on where to start.

• Do not judge the health of membership by your renewal rates. Renewals are a lagging indicator for membership in this economy. Judge your economic situation based on new member input.

• Get the jump on adding new members. Just like you, prospective members are looking for a resource to leverage their own growth. Almost everyone I speak with is seeing improvement in membership acquisition right now. In fact, acquisition is actually producing comparatively better results than renewals for most membership organizations.

• Reach out to the members who left your organization during the recession and see if they are ready to come back. They need to grow just as much as you do.

• Grab talent now while it is available. Whether this means adding key staff or bringing on consultants, now is a great time to leverage top people resources to get momentum going in the right direction.

Please feel free to add any tips you might have in the comments section.

1. How to Survive Your Survival: The keys to successfully shifting into growth mode, Cory VanBuskirk, CVB Consulting Group, Industry Week March 10, 2010.

2. Ibid.


Ray van Hilst said...

In these tough times associations have looked to improve their efficiency and do more with less.

As a result, we have had a number of new groups come on board because Avectra's association management software helps them do that (Ispoke with one client who says it saves him a day of work each week so he can focus on other things). Our clients have figured out how to process dues quickly, how to put together board reports with fewer staff and have improved their overall efficiency.

Great. That's the first step.

Now as the economy is turning around here's your chance to tap into the other features of your AMS. Send eMails to lapsed members and invite them back. Add products to your eCommerce modules and generate more revenue. Tie into a learning system and help your members prepare for the turnaround.

The good news is that the same technology that helped you survive the downturn can be put to use to help you ramp back up and grow in the turnaround.

Tony Rossell said...

Ray -- Thanks for the insight. You have spoken like a true database and operations guy. As a marketing guy, here is my take. If the economy is really turning around, I would put my budget into getting promotions out and producing more members and new customers right away instead of all the time and effort needed to put in new and better software. Strike while the market is hot and then take the profits and improve infrastructure. Tony