WASHINGTON, DC, JUNE 13, 2014AssociationTransformation.com © 2014, Association Transformation
17 BIG IDEASA SUMMARY REPORT FROM OUR WORKSHOP ON
Private Sector Membership Models: What’s New and What It Means to Us
June 13, 2014WORKSHOP LOCATION
American Association ofUniversity Women National Office
1111 16th Street, NWWashington, DC 20036
17 BIG IDEAS | PRIVATE SECTOR MEMBERSHIP MODELS: WHAT’S NEW AND WHAT IT MEANS TO US
A Meeting of Minds for Association CEOs on the Challenges of Membership
Association Transformation is a community of visionary leaders who are tackling the toughest challenges facing organizations. Together we are enhancing our associations’ value to members and establishing new ways for them to share their insight and expertise with the world. To build this community, I lead working sessions of CEOs in a candid exploration of opportunities to improve business, governance and operational models.
On June 13, 19 CEOs and 7 thought leaders met for a working session focused on how to adapt and apply successful strategies of private sector membership models. Our guest speaker was Robbie Kellman Baxter, a Silicon Valley consultant and expert in private sector memberships, who is the author of the forthcoming book, “The Membership Economy.”
Participants received a detailed report on this day-long event. However, our exchange was so lively and thought-provoking; I also wanted to share an overview with leaders who did not attend. I hope by giving you a glimpse into our agenda and findings, those of you who are seeking provocative, high-level conversation and collaboration will recognize kindred spirits and common cause and choose to join us.
My partner Ron Nicodemus, an expert in creating thought leader events, and I co-founded Association Transformation to challenge current paradigms within the association sector, many of which are facing serious disruption, and help define new solutions that will guide future leadership.
This can be a time of great reinvention, in the membership space in particular. I hope the ideas we share from this meeting of minds will inspire you to learn more about Association Transformation and enrich our community through your participation.
Seth Kahan Founder, Association Transformation
WASHINGTON, DC, JUNE 13, 2014AssociationTransformation.com
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© 2014, Association Transformation
17 BIG IDEAS | PRIVATE SECTOR MEMBERSHIP MODELS: WHAT’S NEW AND WHAT IT MEANS TO US
Workshop Participants
Association CEOs Tony Cancelosi Columbia Lighthouse for the Blind Julie Coons Electronic Retailing Association Linda Darr American Moving and Storage Association Michael Fraser Pennsylvania Medical Society David Gammell Entomological Society of America Linda Hallman American Association of University Women Julia Hamm Solar Electric Power Association Ellie Hollander Meals on Wheels Association of America Clare Kelly Iowa Medical Society Doug Kleine Professional Association Services Christine McEntee American Geophysical Union Brent Mulgrew The Ohio State Medical Association Ralph Nappi The Association for Suppliers of Printing,
Publishing and Converting Technologies Peter O’Neill American Industrial Hygiene Association Elisa Pratt AGC of America Catherine Rydell American Academy of Neurology Kerry Stackpole Printing & Graphics Association Mid-Atlantic Dawn Sweeney National Restaurant Association Scott Wiley The Ohio Society of CPAs
Guest Speaker Robbie Kellman Baxter Peninsula Strategies
Thought Leaders Bennie Johnson 304 York Susan Sarfati High Performance Strategies
Association Transformation Business Braintrust Loretta M. DeLuca DelCor Technology Solutions Jeff Glassie Whiteford, Taylor & Preston Debbie King DSK Solutions
Association Transformation Leadership Seth Kahan Ron Nicodemus
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© 2014, Association Transformation
17 BIG IDEAS | PRIVATE SECTOR MEMBERSHIP MODELS: WHAT’S NEW AND WHAT IT MEANS TO US
Our Agenda
• A fireside chat between Seth and Robbie defined membership issues.
• Small groups of CEOs shared concerns.
• Robbie responded to CEO priorities with private sector insights.
• Small groups of CEOs connected the dots between private sector models and aspirations for their associations.
• CEOs crowd sourced a wordle on their most critical membership issues.
• Small groups of CEOs refined their ideas and reported to all participants.
• CEOs shared bold experiments under consideration, such as reinvention of governance, community-based research, the creation of knowledge communities and the redefinition of potential membership.
• Two CEOs volunteered to take the Hot Seat -- a special process Seth led to explore their pressing issue and draw from the collective intelligence of their peers.
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17 BIG IDEAS | PRIVATE SECTOR MEMBERSHIP MODELS: WHAT’S NEW AND WHAT IT MEANS TO US
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© 2014, Association Transformation
17 Big IdeasThe 17 big ideas we share here flowed from presentations, conversations in small work groups and a Q&A between association CEOs, thought leaders, Seth Kahan and Robbie Kellman Baxter.
Each idea was explored in detail throughout the day. We are just providing a brief overview to give you some insight into our conversation here.
At the core of growth in private sector membership models is recurring revenue. It’s the Holy Grail of business because recurring revenue is predictable and smooth.
1. Technology can now deliver a sophisticated online member experience. Technology now enables companies to build member experiences online, which
incorporate features that include the creation of and access to shared content, social networking, community development and subscription payment.
2. Le�ing go of the old is the new modus operandi. Think about a newspaper, with its heavy investment in presses and journalists,
versus Huffington Post, with its online distribution and contributors. If you invested in the old delivery methods to create value, it is time to bite the bullet and say: We may not need that even though we own it and it’s expensive.
3. Technology now extends trust, which in turn unlocks stored value. People are embracing the sharing economy via organizations such as AirBnB and
RelayRide. Customers lend others the use of their property, which otherwise sits idle. This is what unlocking stored value means. “Stored value” for your association may include knowledge, expertise and resources, such as specialized equipment.
4. Size will not save you, nor will a captured market. Netflix was once a small company wondering how to compete with Blockbuster,
with its stores on every corner. By not innovating aggressively, Blockbuster lost out. Netflix claimed enough market share to dominate in short order.
5. Develop your Superusers. A Superuser is a member who contributes at a much higher rate, often
altruistically supporting and enabling participation by others.
6. Onboarding is critical and high-value. Member onboarding has a significant ROI. Notice what your existing Superusers
do and use what you learn to identify potential new Superusers and provide them with the tools and instruction they need to succeed. Get them up and running at full tilt in the first 90 days.
7. Your loyal member may not be your best member. Long-standing members may not always add value to growth, expansion,
knowledge and innovation. They may also be aging out of the association. Focus on your “new” best member, such as emerging high-potential leaders. Do not overestimate the value of high retention rates. They may be a sign of inertia, not value.
8. Segment and serve your best members. Your best members deserve priority attention. Study your data and create
segmentation that allows you to step up service to this high-value group. You don’t need to customize for every variety of member but segmentation does provide continuous learning on how to serve your most important members.
9. Solid technology is a fundamental enabler. Good technology enables segmentation. Make sure your technology platform
provides the information you need to identify trends, analyze behavior and capture relevant data. There is useful, affordable, friendly technology, such as data visualization and analytics tools,that provide great value to your members and your internal team.
10. Freemium means forever. Do not confuse a free trial with a freemium membership. A trial allows access to
some or all member resources for a limited time. A freemium offers a free membership that provides value for eternity as well as the option to upgrade to a premium (paid) level of membership. Even if the member never upgrades (never pays!), they continue to get value for as long as they choose to stay with the organization.
11. Mind your metrics (and gut feelings). Rethink your metrics to align with your mission. Make sure you measure what
matters most. Which of your benefits are attracting and keeping members? You will not know which programs are working if you do not measure them.
12. Continuous tinkering beats The Big Reveal. The Big Reveal is a publicized splash. (“New! Improved! Check it out!”) The
plain truth is that these changes are painful for many members. Major adjustments can drive people away. In contrast, tinkering is incremental and allows you to fine-tune without breaking relationships.
13. If your buyer is not your member, you must serve both. For some associations, the person signing the check is a business or state chapter
rather than an individual member. In these cases, you must offer value to both levels. What new features will each recognize as desirable? Metrics that demonstrate the value delivered to members within the chapter can help.
14. Loyalty is created with a magnet, not an electric fence. T-Mobile revolutionized the telecom business by getting rid of contracts.
Through outreach to customers, they became a magnet that drew customer loyalty. Legacy organizations sometimes hold members hostage by disallowing features and benefits they want unless they buy something else. Or they point to contractual engagements and hold them over their heads. This “electric fence” strategy is not sustainable.
15. If you experience governance as a drag, you may really be facing bad habits. Many association CEOs blame governance or the current set of volunteer leaders
for their lack of freedom to innovate. Governance is the set of bylaws you must adhere to. Habits are things people THINK they must adhere to.
16. A community is different from a social network. A social network maps and tracks your existing relationships. A community is a
connection between people who may not know each other personally, but who come together to support each other to achieve a common goal or interest.
17. Noble purpose drives engagement. Raise awareness and increase participation by setting a big, inspirational, shared
goal for your association. A noble purpose will create new opportunities for partnerships that deepen alliances and provide significant benefit to multiple parties. A big goal makes people outside your organization care about your success; sometimes they care so much they are willing to be venture philanthropists.
“Is your association Netflix or Blockbuster? Where do we want to be? What are we doing differently to get there?”
-Michael Fraser, PhD
#CEOSparks Tweets
1. Technology can now deliver a sophisticated online member experience. Technology now enables companies to build member experiences online, which
incorporate features that include the creation of and access to shared content, social networking, community development and subscription payment.
2. Le�ing go of the old is the new modus operandi. Think about a newspaper, with its heavy investment in presses and journalists,
versus Huffington Post, with its online distribution and contributors. If you invested in the old delivery methods to create value, it is time to bite the bullet and say: We may not need that even though we own it and it’s expensive.
3. Technology now extends trust, which in turn unlocks stored value. People are embracing the sharing economy via organizations such as AirBnB and
RelayRide. Customers lend others the use of their property, which otherwise sits idle. This is what unlocking stored value means. “Stored value” for your association may include knowledge, expertise and resources, such as specialized equipment.
4. Size will not save you, nor will a captured market. Netflix was once a small company wondering how to compete with Blockbuster,
with its stores on every corner. By not innovating aggressively, Blockbuster lost out. Netflix claimed enough market share to dominate in short order.
5. Develop your Superusers. A Superuser is a member who contributes at a much higher rate, often
altruistically supporting and enabling participation by others.
17 BIG IDEAS | PRIVATE SECTOR MEMBERSHIP MODELS: WHAT’S NEW AND WHAT IT MEANS TO US
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© 2014, Association Transformation
6. Onboarding is critical and high-value. Member onboarding has a significant ROI. Notice what your existing Superusers
do and use what you learn to identify potential new Superusers and provide them with the tools and instruction they need to succeed. Get them up and running at full tilt in the first 90 days.
7. Your loyal member may not be your best member. Long-standing members may not always add value to growth, expansion,
knowledge and innovation. They may also be aging out of the association. Focus on your “new” best member, such as emerging high-potential leaders. Do not overestimate the value of high retention rates. They may be a sign of inertia, not value.
8. Segment and serve your best members. Your best members deserve priority attention. Study your data and create
segmentation that allows you to step up service to this high-value group. You don’t need to customize for every variety of member but segmentation does provide continuous learning on how to serve your most important members.
9. Solid technology is a fundamental enabler. Good technology enables segmentation. Make sure your technology platform
provides the information you need to identify trends, analyze behavior and capture relevant data. There is useful, affordable, friendly technology, such as data visualization and analytics tools,that provide great value to your members and your internal team.
10. Freemium means forever. Do not confuse a free trial with a freemium membership. A trial allows access to
some or all member resources for a limited time. A freemium offers a free membership that provides value for eternity as well as the option to upgrade to a premium (paid) level of membership. Even if the member never upgrades (never pays!), they continue to get value for as long as they choose to stay with the organization.
11. Mind your metrics (and gut feelings). Rethink your metrics to align with your mission. Make sure you measure what
matters most. Which of your benefits are attracting and keeping members? You will not know which programs are working if you do not measure them.
12. Continuous tinkering beats The Big Reveal. The Big Reveal is a publicized splash. (“New! Improved! Check it out!”) The
plain truth is that these changes are painful for many members. Major adjustments can drive people away. In contrast, tinkering is incremental and allows you to fine-tune without breaking relationships.
13. If your buyer is not your member, you must serve both. For some associations, the person signing the check is a business or state chapter
rather than an individual member. In these cases, you must offer value to both levels. What new features will each recognize as desirable? Metrics that demonstrate the value delivered to members within the chapter can help.
14. Loyalty is created with a magnet, not an electric fence. T-Mobile revolutionized the telecom business by getting rid of contracts.
Through outreach to customers, they became a magnet that drew customer loyalty. Legacy organizations sometimes hold members hostage by disallowing features and benefits they want unless they buy something else. Or they point to contractual engagements and hold them over their heads. This “electric fence” strategy is not sustainable.
15. If you experience governance as a drag, you may really be facing bad habits. Many association CEOs blame governance or the current set of volunteer leaders
for their lack of freedom to innovate. Governance is the set of bylaws you must adhere to. Habits are things people THINK they must adhere to.
16. A community is different from a social network. A social network maps and tracks your existing relationships. A community is a
connection between people who may not know each other personally, but who come together to support each other to achieve a common goal or interest.
17. Noble purpose drives engagement. Raise awareness and increase participation by setting a big, inspirational, shared
goal for your association. A noble purpose will create new opportunities for partnerships that deepen alliances and provide significant benefit to multiple parties. A big goal makes people outside your organization care about your success; sometimes they care so much they are willing to be venture philanthropists.
“Big reveal” is traumatic. Incremental tinkering is where it’s at for value increases.”
-Seth Kahan
#CEOSparks Tweets
“Robbie Baxter: True membership loyalty is a magnet, not an electric fence.”
-AGC Chapter Support
#CEOSparks Tweets
1. Technology can now deliver a sophisticated online member experience. Technology now enables companies to build member experiences online, which
incorporate features that include the creation of and access to shared content, social networking, community development and subscription payment.
2. Le�ing go of the old is the new modus operandi. Think about a newspaper, with its heavy investment in presses and journalists,
versus Huffington Post, with its online distribution and contributors. If you invested in the old delivery methods to create value, it is time to bite the bullet and say: We may not need that even though we own it and it’s expensive.
3. Technology now extends trust, which in turn unlocks stored value. People are embracing the sharing economy via organizations such as AirBnB and
RelayRide. Customers lend others the use of their property, which otherwise sits idle. This is what unlocking stored value means. “Stored value” for your association may include knowledge, expertise and resources, such as specialized equipment.
4. Size will not save you, nor will a captured market. Netflix was once a small company wondering how to compete with Blockbuster,
with its stores on every corner. By not innovating aggressively, Blockbuster lost out. Netflix claimed enough market share to dominate in short order.
5. Develop your Superusers. A Superuser is a member who contributes at a much higher rate, often
altruistically supporting and enabling participation by others.
6. Onboarding is critical and high-value. Member onboarding has a significant ROI. Notice what your existing Superusers
do and use what you learn to identify potential new Superusers and provide them with the tools and instruction they need to succeed. Get them up and running at full tilt in the first 90 days.
7. Your loyal member may not be your best member. Long-standing members may not always add value to growth, expansion,
knowledge and innovation. They may also be aging out of the association. Focus on your “new” best member, such as emerging high-potential leaders. Do not overestimate the value of high retention rates. They may be a sign of inertia, not value.
8. Segment and serve your best members. Your best members deserve priority attention. Study your data and create
segmentation that allows you to step up service to this high-value group. You don’t need to customize for every variety of member but segmentation does provide continuous learning on how to serve your most important members.
9. Solid technology is a fundamental enabler. Good technology enables segmentation. Make sure your technology platform
provides the information you need to identify trends, analyze behavior and capture relevant data. There is useful, affordable, friendly technology, such as data visualization and analytics tools,that provide great value to your members and your internal team.
10. Freemium means forever. Do not confuse a free trial with a freemium membership. A trial allows access to
some or all member resources for a limited time. A freemium offers a free membership that provides value for eternity as well as the option to upgrade to a premium (paid) level of membership. Even if the member never upgrades (never pays!), they continue to get value for as long as they choose to stay with the organization.
11. Mind your metrics (and gut feelings). Rethink your metrics to align with your mission. Make sure you measure what
matters most. Which of your benefits are attracting and keeping members? You will not know which programs are working if you do not measure them.
17 BIG IDEAS | PRIVATE SECTOR MEMBERSHIP MODELS: WHAT’S NEW AND WHAT IT MEANS TO US
WASHINGTON, DC, JUNE 13, 2014AssociationTransformation.com
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© 2014, Association Transformation
12. Continuous tinkering beats The Big Reveal. The Big Reveal is a publicized splash. (“New! Improved! Check it out!”) The
plain truth is that these changes are painful for many members. Major adjustments can drive people away. In contrast, tinkering is incremental and allows you to fine-tune without breaking relationships.
13. If your buyer is not your member, you must serve both. For some associations, the person signing the check is a business or state chapter
rather than an individual member. In these cases, you must offer value to both levels. What new features will each recognize as desirable? Metrics that demonstrate the value delivered to members within the chapter can help.
14. Loyalty is created with a magnet, not an electric fence. T-Mobile revolutionized the telecom business by getting rid of contracts.
Through outreach to customers, they became a magnet that drew customer loyalty. Legacy organizations sometimes hold members hostage by disallowing features and benefits they want unless they buy something else. Or they point to contractual engagements and hold them over their heads. This “electric fence” strategy is not sustainable.
15. If you experience governance as a drag, you may really be facing bad habits. Many association CEOs blame governance or the current set of volunteer leaders
for their lack of freedom to innovate. Governance is the set of bylaws you must adhere to. Habits are things people THINK they must adhere to.
16. A community is different from a social network. A social network maps and tracks your existing relationships. A community is a
connection between people who may not know each other personally, but who come together to support each other to achieve a common goal or interest.
17. Noble purpose drives engagement. Raise awareness and increase participation by setting a big, inspirational, shared
goal for your association. A noble purpose will create new opportunities for partnerships that deepen alliances and provide significant benefit to multiple parties. A big goal makes people outside your organization care about your success; sometimes they care so much they are willing to be venture philanthropists.
“Distinguish between governance & habits. Governance = you must adhere to. Habits = things people THINK you must adhere to.”
-Sco� Wiley
#CEOSparks Tweets
“It’s simple – people expect customization – associations have the data they need to segment –but are they doing it?”
-Lore�a M. DeLuca
#CEOSparks Tweets
Should You Be Part of Our Conversation?If these are the kind of discussions you find stimulating and valuable, I welcome you to join the conversation by:
• Bringing Seth Kahan in as executive advisor. • Bring in Ron as an advisor in creating thought leader events. • Joining a CEO Peer Group led by Seth Kahan. • Sending a subordinate to a COO Peer Group led by Seth Kahan. • Involving your organization in our next Strategic Foresight research project. • Watching free videos and downloading articles from www.associationtransformation.com • Participating in our community forum, CEOcampfire.com
Keep an eye on the Association Transformation website and signup for the Newsletter so I caninform you about resources and coming events.
We would be pleased to answer any questions and address any concerns.
17 BIG IDEAS | PRIVATE SECTOR MEMBERSHIP MODELS: WHAT’S NEW AND WHAT IT MEANS TO US
CEOs ask tough questions. Here are some of the issues our group addressed:
• Could I really lose my membership to LinkedIn?
• With so many options, how does my association compete for share of mind/share of wallet?
• How do you cut through the static to achieve serious bandwidth out there?
• We offer limited resources, so how do we apply the Amazon “recommendation model”?
• Is there such a thing as too much segmentation?
• I have legacy IT... how do I incorporate new technology?
• I want to blow up my governance. Where do I start?
• My association is made up of organizations (or state chapters) versus individuals. Some are not paying their fair share when it comes to initiatives such as lobbying. How do I find a balanced solution?
• Some of the services we have traditionally provided are no longer cost-effective. What is the least disruptive, most palatable way to discontinue them?
• What is the biggest risk I face in securing a successful future for my association?
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© 2014, Association Transformation
Q&A: Tackling the Tough Questions
Ron Nicodemus321-626-6000Ron@AssociationTransformation.comAssociationTransformation.com
Seth Kahan301-229-2221Seth@AssociationTransformation.comAssociationTransformation.com
