I was chatting with one of my favourite CEOs the other day and he asked me this question. “How do you quantify the value of membership? What fee should we be charging for membership?” Great question.
If you’re running a trade, industry or professional organization how should you price your membership? What matters most? The services that you provide? The fees that other associations charge in your industry? Is there a standard that tells you how much to charge your members?
Like any other product or service, the value of the membership is no more or less than the value that the individual member attributes to it. How much does he or she “need” the membership, what money will it put in their pocket, what emotional value does membership provide (or substitute Maslow’s Hierarchy here) and how much can they afford to pay?
Ultimately you value your membership just like any business would value a product or service.
Answer these questions.
1. Who are you selling to?
2. What is the member value proposition to that type of member?
3. Can the member value proposition be quantified? For example what is the member discount on events and how many are there?
4. What are the competing opportunities for membership services. Are there other associations who compete with you for members? If so, what do they provide and what do they charge for membership?
5. How much can a prospective member afford to pay? If your membership is worth $1,000 per annum but members can’t afford it, you must lower your price point.
Here are some things to consider:
1. Your member value proposition is not a laundry list of what the organization does. It is a succinct, compelling description of the value of the membership to the member. The value proposition of your organization is what makes your existing members renew each year and brings new members in the door. Many organizations have only a fuzzy idea of their value proposition to their members.
2. What is the credibility and visibility of your organization? If it is an old, trusted and highly credible institution it’s worth more than membership in an organization that no one has heard of. That’s why you pay more for a degree from Harvard than for one from the University of West Quackenbush.
3. What is the visibility of your member services? If your organization does a great job of marketing the value of the membership then it’s “worth” more.
4. What is the quantifiable value of the services provided by membership? Do members receive a significant discount on events and other services? Do you provide professional education or certification? If so, what is the value of the education?·
- Can you demonstrate that the member will actually make more money with this education? If so, how much? If the average salary for your members is $150k then education has a higher perceived value than if the average salary is $30k.·
- Is there a quantifiable downside to the member not having the education? For example if the education helps an employer or the individual to mitigate against costly risks then the education is worth more than if this is not the case.
Remember it all starts with your member value proposition. This is the bedrock of the sustainability of your organization and many organization cannot articulate it. Last year, our annual survey of membership organizations told us that less than a third of organizations surveyed were highly confident that their board members could clearly state their value proposition to a prospective member