Five reasons why membership is killing association business models: Part I

by Jeff De Cagna on July 17, 2012

Membership is perhaps the most sacred tenet in all of association orthodoxy. Indeed, for many organizations, the membership imperative defines the very existence of the association: membership is who they are and what they do. In a time of relentless societal transformation, however, the impact of forces beyond our control makes it necessary for us to question all of our most deep-seated beliefs, including our beliefs about membership. In this three-part series, I will share five critical reasons why the continued emphasis on membership is “killing” association business models. Please share your ideas and insights in the comments below.

Reason #1: Membership-centric business models organize all value around the membership relationship.

The typical association business model depends on member relationships that are becoming harder to maintain given today’s sky-high stakeholder expectations for value. Even when dues payments are not a major revenue stream, the membership mindset still shapes the internal logic of the typical association business model. As a result, most associations tend to offer only “pay-to-play” membership relationships, even though current and future stakeholders often have free or low-cost access to a variety of “good enough” and superior alternatives for building networks, retrieving information and pursuing learning.

NEW DESIGN APPROACH: 21st century association business models must focus on creating radical new value instead of on membership. By prioritizing value creation and placing less emphasis on membership, associations will have the opportunity to establish open and, hopefully, collaborative relationships with stakeholders for whom membership is not an option. Instead of a one-size-fits-all membership value proposition, associations will be able to enter into rich and mutually-beneficial value conversations with these stakeholders, and gain better access to (and perhaps greater influence with) their distributed networks.

Reason #2:  Membership-centric business models tend to focus on association outputs instead of stakeholder outcomes.

Today’s stakeholders live in a complex, competitive and dynamic world that demands they be very focused on achieving their most important personal and professional outcomes. To create new value for these stakeholders, associations need a more intimate and empathic understanding of both their intentions, and the constraints they face. The typical membership-centric business model, however, still produces a defined bundle of standardized outputs that is delivered to all stakeholders, through the association’s preferred channels, on “association time,” as determined by internal operating, planning and governing calendars.

NEW DESIGN APPROACH: In designing 21st century business models, association leaders must pay much closer attention to the kind of people their current and future stakeholders wish to become, and the things they wish to achieve in their lives. Far beyond solving immediate problems or servicing short-term needs, association business models must be designed to provide meaningful support to their stakeholders as they pursue their deepest aspirations, on their terms and on their time. Going forward, stakeholder intimacy and empathy, not industry or professional tradition and orthodoxy, must guide the work of business model innovation.

Part II with reasons #3 and #4 will be published next week. In the meantime, sign up today for P.I.’s new Serious Questions electronic newsletter!

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