How to choose an association management company — 6 Tips to save time and money
Association management companies ("AMC"s) provide operational support for membership organizations– typically
with an all volunteer board, no office and no fulltime staff. These firms manage the day-to-day operations
of the organization on behalf of the board.
When it’s done well, it’s a seamless service. Members call or email the organization and
they have no idea they’re speaking to a third party. The AMC’s staff know the organization
and its members and build a personal bond with them. The events get organized,
the revenue gets collected and the bills get paid. The board can focus on governing and
can delegate the back office activities with confidence that everything is running smoothly.
When hiring an AMC, organizations often make the mistake of assuming they are buying
a commodity. This can be a costly and painful mistake. You’re not buying a yard of
gravel. You are hiring a key employee.
What would you consider in making a hiring decision? You’d look at skills, experience, personality,
knowledge and salary expectations. If you’ve only got the budget for an administrator, you would not post
the position asking for the attributes of a senior manager. You would put all of the relevant information
in the job posting– including the salary range, so you get the right applicants.
You would certainly ask for a C.V. from all your applicants to create a short list but you
would not make your decision based on the C.V. alone. You’d interview at least the
three top candidates to assess their attributes, knowledge and judgement and to get an
idea of how well their personality would fit with your team.
Here are a few common hiring mistakes and how to avoid them.
- COMMON MISTAKE: Ask for a proposal from every AMC on the planet and don’t follow up.
Many AMCs will not respond to an unsolicited request for proposal ("RFP") from an organization
they don’t know. Why? Proposal requests are often a “tire-kicking” exercise
with no real intent to award an engagement. It’s time-consuming and expensive
for an AMC to prepare a proposal so they want to know that you’re serious.
SOLUTION: If you want a proposal from a reputable firm then make a personal
connection. Phone them, introduce your organization and tell them why you would like them to respond.
- COMMON MISTAKE: Keep your budget a secret. Ask for your entire wish list into
and see what comes back.
What if you were hiring an employee? Would you keep the salary range a secret
and ask for the attributes of an executive when you have the budget for an office
manager? The result would be a host of applicants that you can’t afford. If you’re
asking for proposals, be upfront about your budget and solicit ideas for the best
package for that budget.
SOLUTION: If you have a tight budget, some AMCs will opt out and that’s OK. It
saves you time because you only have to focus on the firms who are genuinely interested
in serving you at the price you can afford.
Prioritize your needs so that respondents can give one price for your “must-haves”
and a second price for your "nice-to-haves".
- COMMON MISTAKE: Ask for separate pricing for every item.
Some organizations do this because they want to compare each AMC’s pricing on
an item by item basis. Trust me– even if an AMC gives you this information it’s
worthless. Every job, including that of an AMC is a holistic undertaking. The greater
the number of tasks an AMC does for you, the less expensive it is for them to
take on an additional task because parts of that task are probably already included
in another activity.
Like an employee, every AMC does some tasks faster and more effectively than
others. What you really need to know is how well each AMC’s areas of strength coincide
with your “must-haves”. Line-by-line pricing doesn’t answer this question
and it will reduce the willingness of many AMCs to provide a proposal.
SOLUTION: If you’re not sure what you can afford, then prioritize your
needs in the RFP so that respondents can give one price for your "must-haves", a second price for your
"must-haves" and a third price for your "nice-to-haves".
- COMMON MISTAKE: Don't be specific. Use ambiguous phrases like "assist with"
and "support as required".
If your needs are ambiguous then the proposal pricing will be useless.
SOLUTION: Make the effort to be specific. If you’re not sure, then include these
needs in a separate section and leave them out of the pricing. Ask the AMC what
services they suggest to meet these needs. This is a good way to assess the ability
of the AMC to anticipate your needs and provide solutions.
- COMMON MISTAKE: Create your own RFP from scratch.
This is a waste of your valuable time. There are many things you can overlook
that are critical to the hiring process and let’s face it – it’s really time–consuming
to create an RFP from scratch.
SOLUTION: Start with a template.
- COMMON MISTAKE: Take the lowest bid.
Would you hire an employee simply because they have the lowest salary expectations?
The relationship with your AMC is going to last at least 2 years and hopefully
longer. They will be the first point of contact with your members and they will
be a deciding factor in your sustainability.
SOLUTION: Choose the best AMC you can afford.