March 26, 2019
Most associations professionals would agree that meeting member needs is at the heart of every decision made. Yet over the last 40 years, most professional associations have been adopting a product-line business model. In addition to membership, we create and try to sell access to products like newsletters/publications, research, online education, meetings and conventions, certifications, online job banks, and more. We use “membership” as an excuse to sell more stuff at discounted prices to members. This product line approach so dominates our thinking, we build our departments, budgets and even our website navigation around them. Venture to almost any association website and you will see the primary navigation crafted around our departments and product lines, not our members’ biggest needs and challenges.
Forty years ago, we had issues like crooked television antennas, cars with manual windows, the movie Look Who’s Talking, and 2MB floppy disks. Similarly, I see the association business model as problematic (OK, maybe not as bad as the fact they made Look Who’s Talking Too), and suggest association professionals consider:
During the past 20 years when associations were doubling-down on the product line model, the world moved in a very different direction. Organizations like Netflix, Harvard Business Review, and the New York Times made content easy to access and use through personalization and one-click, one-time purchasing. Simplicity of access and ease-of-use became the name of the game, and associations are notoriously challenged with making things simple for their members and customers. It’s no wonder why over half of all associations are experiencing flat or declining membership and revenue growth.
It is this view coupled with the last decade’s digital transformation of industries like transportation (Uber/Lyft), publishing/content/networking (LinkedIn/Facebook/Netflix/HBR), education (MOOCs/online universities), and travel (AirBnB/VRBO), that makes me a firm believer that the association business model needs to experience a massive renovation or even revolution. Our product line model is generally less stable and has grown more complicated than originally intended. It started in the 1980’s when the mantra was about “revenue diversification” – which worked for a while. But in this day and age where consumer expectations are rapidly escalating around brands and experiences that make life simpler, the association model is failing.
The result of diversification has been a plethora of product lines that are difficult to navigate, buy, access and use for the average member. And instead of being organized around holistically solving the challenges of our members, we are more likely to structure our associations around creating more & more products, of which many have such meager consumption we should be questioning their existence.
Featured below is research done by The Standish Group, showing statistics on usage of software features. In general, when you look at how few features are used “always or often,” we’re not all that different than the software industry. We need to be more focused on solving our members’ challenges than growing our product lines. The two are NOT equivalent, and it should be evident which takes priority even if it means sacrificing revenue growth. Yes, I said “sacrifice revenue growth” out loud … shame on me.
The association and non-profit industry are vibrant and have endless potential that the product-line business model may be impeding in many circumstances. Given the above, I challenge us to the following questions:
At The Healthcare Financial Management Association, this simple line of inquiry has led us to a full redesign of our business model. We encourage you to answer these questions for yourselves, and see what direction the answers may lead you in.
If you’re ready to increase your membership organization’s revenue, connect with an entire community of purpose-driven leaders and grow yourself, we’re ready to help you do it.Learn More