Most professional and industry associations want to serve their entire profession or industry, even though only a portion of this constituency actual contribute financially to them. By distinguishing between those constituents who contribute financially (customers), and those who don’t (beneficiaries), your association is better able to understand its potential growth strategy.
The importance of making this distinction is not unique to professional and industry associations. The Hawthorn Football Club provides a good example of this. Despite being one of the most successful teams in the previous 25 years, it was in major financial trouble at the turn of the century. It recognised that its paying members (customers) where only a fraction of the number of people who identified themselves as Hawthorn supporters (beneficiaries). Identifying these supporters as potential customers, the club looked at ways of making membership more appealing to them. In response, they created a suite of membership options with different combinations of benefits and prices. The result has been a decade of year-on-year membership growth which underpinned the clubs sponsorship and financial growth and helped to fund its core purpose – winning games of AFL football.
Understanding Your Customers
One of the key distinctions between an association and a commercial business is the relationship an association has with its customers (membership). Association members are far more willing to share information about themselves than are the clients of commercial organisations. The irony is that while commercial organisations invest heavily in trying to find out more about their customers, many associations do very little with the data they already have. There are of course exceptions to this.
The Catholic Primary Principals Association is one example. Independent academic research revealed that primary school principals, and remote Catholic primary school principals in particular – have a lower life expectancy and a higher rate of violence in the workplace (from parents), than almost any other sector. The association proactively sought to better understand the health and well-being of its members so that it could identify ways to assist them. More than half its members completed what was, given the nature of the topic, a very personal survey. The results were collated and analysed and the findings and recommendations shared with the membership. The association then proposed increased fees to enable it to undertake the work identified in the research, and has subsequently grown both its revenue per member and its overall member numbers.
Understanding Your Potential Customers
The first step in attracting new customers (members), is to understand how they are getting by without you. There are three clear subsets of this:
- They need what you have to offer, but don’t know that it is an option for them
- They want what you have to offer, but don’t think it is worth the cost (money and time)
- They don’t value what you have to offer them
The first subset relates to a lack of awareness, either the individual does not know that your association exists, or is unaware that they are eligible to join. To attract this subset, you will need to raise awareness and understanding.
The second subset has lots of nuances, and the Hawthorn Football Club is a good illustration of this. Your potential customers like what you do, but not the way you have packaged and priced it for them. For some professional and industry associations, it could be that the association benefits are flowing through to the entire profession or industry so effectively that the non-members see no benefit in paying the fees. To attract this subset, you need to review your range of benefits and associated price points.
The third subset could be a problem of perception or a point of principle. The key difference between this and the second subset is that even if your current offering was free – they would not want it. To attract this subset, you will need to change what you do.
In nearly all cases there will be potential customers within each of these subsets. By establishing the size of each of these subsets, and putting together a plan to engage them with a more suitable offering, you can have a plan to grow your organisation.
Conclusion
Associations that understand both their customers and their potential customers are more likely to reach their potential capability and be better able to deliver on their core purpose. With the right tools and methodology this is well within reach of all associations. Growth is not only financially prudent, it also recognition that the association and its work are valued.