The Necessity of Non-Dues Revenue

June 2017

Treading water and just trying to survive is a recipe for disaster. If you don’t keep growing, you’ll just wither away and die - or the market will take you out.

Hank Berkowitz is the moderator-in- chief of Association Adviser eNews.

Associations often get bogged down in day-to- day operations and servicing member needs. They don’t always carve out enough time to think and act strategically. NDR opportunities are definitely there, but someone needs to own the NDR initiative.

There’s no such thing as the status quo anymore. Treading water and just trying to survive is a recipe for disaster. If you don’t keep growing, you’ll just wither away and die—or the market will take you out. We as trade associations have to come up with products and services that represent real value to members and which help grow the top line. We may be trade associations, but we’re also running businesses, you HAVE to grow!

NDR is an initiative that needs to be owned. It’s no longer a side project that teams do when they have time. Associations are at a disadvantage because they cannot deliver (or are unwilling to pay for) the kinds of performance/ROI data that advertisers and media buyers are looking for to justify their spend. That needs to change fast.

Fastest growing NDR channels

Events, e-mail marketing and custom content provide the fastest growing opportunities for associations, meetings are going strong. But, vendors and service providers are looking for unique opportunities and associations that offer custom-designed ideas are getting the business. On the publications side, members want their association not only to aggregate, but analyze information and trends. Creative packaging of that analysis and effective, multi-channel delivery of that [insight] is attractive to sponsors.

Executive education is another hot growth area.

Legacy communication channels still have a seat at the table

When it comes to print magazines, directories, newsletters and live events, you wouldn’t label them legacy. They are at the core of demonstrating member value and communicating the association’s messaging. Digital publications are exciting if done really well and incorporate audio, video, polls, gaming, etc. but since robust digital can now cost more to produce than paper-based media, print is enjoying a resurgence. Associations really need a combination of both traditional and legacy media. Digital delivers analytics and real-time response. Print delivers something tangible that is easy and pleasant to absorb. It sits on the member’s desk and reminds them constantly that they are a member of something important.

It’s important to get member feedback about the information, tools and resources they need from your association and to communicate that story to advertisers. For some of our association clients, the print magazine continues to be their most important and highly rated member benefit. That is the story that advertisers need to hear.

Naylor’s annual association communication benchmarking study confirms that an overwhelming 90 percent of survey participants consider conferences and other events “very” or “extremely” valuable. The research also found member eNewsletters and print magazines to be among the most highly rated communication channels (73 and 59 percent, respectively). Even with new forms of communication popping up yearly, traditional channels are still desired.

Should sponsored content be permitted in your member communications?

Readers want to know that the author has “walked the walk.” Sponsored content generated by practitioners and experienced executives provide insight that resonates. Compilations of related articles are being published as e-books to stimulate lead generation and to provide valuable education and training. Seeing the word ‘sponsor’ doesn’t necessarily mean ‘sales pitch’ if done correctly. Many sponsors have a lot of valuable expertise to share with members, and if it is something that is deemed helpful, I see nothing wrong with it especially if it brings in revenue. Only associations that can afford to turn their backs on sponsored content are the ones that dominate their industries and don’t need the revenue. Most associations don’t fall into that bucket anymore.

Associations should position themselves as trusted arbiters of information for their members and the industries. We should harness partnerships with other [providers of expertise] and let the association take the lead by sharing information that can truly benefit members, not the salesy pieces.

We absolutely think there is value in being a repository of intellectual capital. If you’re talking about white papers like the ones we have on our website and digital publications, the operative phrase is ‘white.’ They must be intellectual thought leadership pieces, not sales literature or a commercial for the sponsoring company.

Sponsored content guidelines

Advertisers and sponsors are pretty savvy now. They know that being salesy is a turn-off to readers. They’ve had a lot of practice with social media, which has taught all of us that when we engage, we should be all about the customer and not trying to push our own message or product.

The importance of providing clear guidelines to your advertising partners, using language such as Advertiser agrees that content should focus on information, findings, or case study in an objective way that both benefits and informs the audience and does not solely focus on the direct promotion of a company or product. You should also send advertisers and agencies examples of sponsored content that’s run with you in the past WELL BEFORE they develop a campaign for your media.

All content runs from companies, bloggers and guest authors must be vetted to keep product endorsements to a minimum.

Collaboration between editorial and sales

We strongly suggest that advertising and editorial teams have standing meeting times to discuss upcoming content, new advertisers and opportunities to work together. The only way to maintain harmony is to build an environment with open communication between these teams.

Can NDR go too far?

The term “not for profit” is just a tax status and not a business model. Today’s members understand that associations need revenue to continue serving their needs and that their needs can’t be met with just membership dues. Members only get irritated if they feel they are being sold to all the time and not being given something of value in return.

Conclusion

There’s an “archaic notion” that if a trade association is growing well then there’s something evil about it. As associations, we need capital to invest in new products and new services for our members. That new capital has to come from somewhere. There are startup costs for rolling out new products and services here, just as there are startup costs for everyone from manufacturers to Starbucks. If more association thought in an entrepreneurially and embraced capitalism, their boards wouldn’t be wrestling with so many revenue and sustainability issues.