On average, membership subscriptions and events make up approximately 30-45% total revenue for membership organisations. However, the time to diversify revenue streams has come. Due in part to an industry-wide recognition that overreliance on fee-based models means more vulnerability.
In fact, the MemberWise Influence 100 membership bodies costs are only half covered by subscription fees. The professional association & network highly recommend a portfolio approach to de-risking income.
In this article, we’ll explore ways that membership organisations can generate sustainable income beyond traditional models.
The Risk of Relying Solely on Membership Fees
Membership associations overly reliant on fee-based models expose themselves to the mercies of economic uncertainty. Last year, 25% of all associations suffered a direct hit to their dues income after losing members. This highlights a growing concern. Without diversified revenue streams associations are particularly vulnerable to even the slightest economic downturns.
Similarly, fee-based models tie growth to membership size. If the number of memberships drops, budgets shrink and the potential for growth diminishes. A recent report suggested that membership fees for the average organisation would need to rise by about 7% just to balance the books. As a result, growth is capped further and the delivery of value-adds becomes nigh impossible – let alone unsustainable.
Smarter Revenue Streams to Explore
All that said, there’s a number of ways membership organisations can diversify their revenue streams. The first method involves partnering with external brands to offer exclusive perks and discounts. Co-created reward offers increase customer retention, engagement and conversions, especially when the partnered brand complements the association.
With the right loyalty programme provider, associations can access a ready made network of potential partner brands that are closely aligned with the association. For example, the Independent Society of Musicians (ISM) offer savings at local music shops, recording studios, and courses. It’s a great way to cross and upsell additional services.
Similarly, additional fees could be generated by affiliate partners who want to place their own offers on the association’s platform.
Strategic Sponsorship and Advertising Opportunities
Corporate sponsorships and advertising are another bolster to revenue. These typically include event sponsorships, advertisements in newsletters or journals, and even entire packages of digital sponsorships.
Organisations could step it up even further by implementing tiered packages. Advertisers could pay an additional fee to access benefits in higher ranks. Perks like ‘presenting sponsor’ levels for events or offering access to highly visible ad spots would incentivise potential industry partners.
Paid Premium Content or Micro-Subscriptions
Most associations sit on a wealth of knowledge. Your experts’ insights, industry experience and field of knowledge can all be packaged into premium, paid content. It’s no wonder over 70% of membership organisations have expanded into virtual professional development offerings.
Your own strategy could include offering learning resources, reports and masterclasses for an additional fee. Bundling these into a tiered rewards structure would also work in generating extra revenue through tier-related add-ons.
Practical Tips for Getting Started
There’s four areas to focus on to get your diversification of revenue streams off the ground. Begin with an audit of where money comes from today and where the risks lie. Identify if you’re overly reliant on one source (e.g. 80% from dues or an annual event)
Secondly, ask members what they value most. Surveys and feedback sessions remove any guesswork as to what members deem valuable. Such insights allow you to pinpoint where members recognise value, and where you should promote new offerings that could enhance that.
Remember to start small. Pilot one idea at one time. Around 50% of associations say limited resources are a major barrier to increasing non-dues revenue. By starting out small you can iron out the kinks, measure impact and gather feedback.
Finally, as you begin to expand, look for partners or sponsors that align with your members’ demographics and professional interests. Closely aligned partners bring relevant offers, and relevant offers lead to higher engagement. When partners see this strong engagement, naturally they’ll want to deepen the relationship. Potentially, they may invest more and sponsor more events.
Propello offers a range of tools to help drive new member acquisition, increase brand loyalty, boost member retention and improve the experience for your members.
Contact us to learn more.
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