The Need to Provide Greater Value
By Ken Monroe

In an earlier issue of Solutions, I introduced the idea that there are a few overarching issues that we must pay attention to in our planning activities if we are going to steer our associations successfully into the future. Key among these is the need to provide adequate resources to support association activities that meet members’ needs.

While experienced association professionals are already addressing this issue, its growing importance warrants a review of the topic. This review will also benefit new association executives and board members who are not as familiar with the issue.

PRESSURE ON RESOURCES
The adequacy of resources intensified as a concern over the last couple of years due to changes that have occurred in the economic environment. Associations are competing for fewer available dollars in general, while ready access to information (e.g., the Internet) has raised the question among some members whether they need associations at all.

The bottom line for associations is that member needs and revenue sources are changing and are putting pressure on associations to:

• Identify new resources that can help offset the current pressure on dues revenue;
• Be better stewards of existing resources (i.e., get more ‘bang for the buck’).

Programs and services can be aligned to be more responsive to changing member needs, thus demonstrating more value. In a time of tight resources, this often means focusing on fewer, high impact activities and foregoing (or handling differently) other activities that are less cost effective.

FOCUS ON WHAT’S MOST IMPORTANT
An approach often overlooked when focusing existing resources on clients’ priorities is to outsource non-essential activities or functions. Every department, function, service and product of the organization should be open to scrutiny as a candidate for possible outsourcing. Outsourcing offers an association three important benefits. It allows you to:

1. Focus staff and financial resources on areas that provide the greatest competitive advantage to the association and value to your members. These are typically the association’s core competencies and strategic business goals.
2. Gain access to technology, knowledge and skills that your association might not be able to attract or afford on its own.
3. Reduce costs and risks associated with keeping up with the latest concepts and technological advances.

The idea of outsourcing can be confusing or frightening if you have no prior experience with it. There are horror stories that go around, some for good reason, about outsourcing that has gone awry. However, if it is done properly, it can be a real boon. A good discussion on this important topic is presented in a related article, “Keys to Developing a Successful IT Outsourcing Relationship” (Solutions, Issue Two).

In short, if an activity or function doesn’t directly add value to members’ dues investment, then consider outsourcing it. You will likely save money and, at the same time, enhance impact.

CONSIDER NON-DUES REVENUE SOURCES
Most associations have found that it is essential to pursue non-dues revenue as a way of increasing resources. Most also try to do this in a way that the non-dues revenue generating efforts also meet member needs. Much of the association management literature in recent years devotes considerable attention to this subject, including descriptions of creative new ways to approach new revenue sources.

Most of us are very familiar with the traditional sources of non-dues revenue: advertising, sponsorships, meeting registrations, exhibit fees, auctions, placement services, selling mailing lists and data bases, certification/accreditation, classified ads, etc. And some new, creative ideas have surfaced recently, including such things as conducting an on-line auction, sponsoring “high-end travel tours,” (a new approach to the old travel discount affinity programs), and holding issue-specific support appeals for advocacy campaigns—directed both to members and other constituencies with an interest in the issue.

However, it is important to not fall into the trap of jumping into a new venture that sounds good without doing the proper homework. What was a great idea for someone else might not be at all appropriate for an organization in your circumstances. If assessing potential revenue generating ideas and market testing a re not among your association’s core competencies, you should consider seeking outside expertise.

When considering a new non-dues revenue product/service, a business plan should be developed, and market testing should be conducted to make sure the new product/service will yield successful results—both in generating expected revenues and in enhancing members’ perception of value.

Laying the appropriate groundwork and developing a sound business plan sounds like drudgery, and it often is, but it is also the best way to minimize risk and maximize the likelihood of success.

SUMMARY
The challenging economic environment of recent years has put pressure on associations to find new ways of providing resources to meet member needs. Freeing-up resources (staff time and dollars) and re-focusing them on core competencies that add value to members is one method. Outsourcing is being used on an increasing basis to help achieve this re-focusing of resources. Creating new non-dues revenue sources is another method being used to create additional resources and demonstrate that the association is responsive to today’s changing member needs.

Ken Monroe is Chairman and Chief Executive Officer of Bostrom Corp.