How to Determine Your Association’s Membership Pricing Model

Three questions are on the minds of many association professionals right now:

  • Should our association raise its dues?
  • Can I make a convincing case for a dues increase?
  • Should we change our membership pricing model?

When determining the price of membership, set aside any hunches. Don’t rely solely on the opinions of board or committee members, or compare your association with others.

Your association’s membership pricing model should reflect the value of membership benefits to members. When you get it right, you’re more likely to attract and keep members in your fold.

Why getting your membership pricing model right is so crucial

The success of your association’s recruitment and retention efforts depends on having the right membership pricing model. But that’s not all: your association’s financial health and ability to fulfill its mission also ride on it.

Pricing consultant Dr. Michael Tatonetti, CAE, CPP, makes an important point: pricing is not about greed, it’s about financial sustainability.

He says the price you charge must equip your association with financial sustainability. Only then can you execute on the value you’ve promised members and create more value by delivering updated or new products that continue to help them.

When to change your membership pricing model

It’s time to evaluate membership value and pricing if your member recruitment and retention rates are in decline, or if your revenue model isn’t sustainable.

With the recession holding off and the pandemic fading in memory, it’s tempting to raise dues or change your membership model. But first, you must be confident your association is delivering enough value to merit a price increase.

The only value perception that matters is your members’. Understand how they define membership value and how they value the different benefits you offer. Before considering any changes, you have research to do.

When planning a membership pricing model project, build in time to review and revise bylaws. Julia O’Connor, director of membership at the International Association of Movers (IAM), said, “Since association bylaws are the rules and foundational principles governing your association, management must ensure that the changes to the membership structure do not conflict with the current bylaws.” IAM spent three months on their bylaw review and revisions.

What’s involved in membership pricing model research

Research prevents you from making membership pricing decisions in a vacuum. It also arms you with the data you need to make your case to volunteer leaders. Their opinions are worth hearing, of course, but they forget they’re not typical members.  

Anecdotal information, such as stories from member recruiters about objections to joining, can tell you where to dig deeper in your research. But these stories are not the complete picture. Data tells you the best stories.

  • Membership dues trends as a percentage of revenue
  • Non-dues revenue trends
  • Membership acquisition and retention trends in aggregate and by member segments
  • Average lifetime value of a member
  • Cost to deliver membership and each member benefit
  • Use of different member benefits in aggregate and by member segments

Instead of overhauling your pricing model, you may find you can strengthen your balance sheet by tweaking specific benefits. For example, you may decide to charge for the print edition of your magazine instead of eliminating it altogether.

Also consider developments in your association’s industry that may be affecting membership growth.

The next step is surveying members (active and inactive) and non-members who represent all market segments. Tatonetti suggests these questions:

  • What three benefits of membership do you value most?
  • What membership value would you like the association to amplify?
  • What membership value is missing?
  • What membership benefit(s) do you think the association could sunset?

These questions help you identify “value levers.” The open-ended responses also provide language you can use in membership marketing.

After gathering data in surveys, dig deeper into questions about value and pricing in individual and group conversations. Watch for areas where the behavioral data you gathered about specific benefits conflicts with what people tell you. For example, some members may tell you they value the career center, but visits to that page are extremely low. Do they value the idea of it but don’t actually go there? Or are they outliers who use it regularly?

This part of the project is a lot to take on, which is why working with a membership or pricing consultant can help.

Types of membership pricing models

There are hundreds of ways to price membership, but most are based on four models.

#1

Traditional model

In the traditional approach, every member type gets the same or nearly the same benefits for the same price. Per the 2022 Membership Marketing Benchmarking Report from Marketing General Inc. (MGI), fixed pricing is used by 22% of associations.

Some benefits might only be available for certain membership types. For example, only core and supplier members vote, or only core members qualify for officer roles.

#2

Sliding scale model

In the most common model, used by 54% of associations, dues are based on attributes that affect a member’s ability to pay. For individual membership, dues are tied to the member’s career level, employment status, or business type.

  • Student, resident, or fellow
  • Recent graduate or early-career professional
  • Professional in transition (unemployed)
  • Retired
  • Global members from struggling economies
  • Small, medium, or large practice

Organizational membership dues are based on the company’s number of employees, locations, revenue, permits pulled, or other indicators of business health. Dues might also be based on the number of employees who plan to participate in association or component activities. At the American Society of Interior Designers, a firm’s membership level and dues are based on the number of employees with chapter memberships.     

Many associations, like ASAE, offer both individual and organizational memberships. The College Sports Communicators offers an All-In Membership that provides benefits for as many employees as the organization wishes.

Sliding-scale memberships are fairer for individuals and organizations with limited resources. But both the traditional and sliding scale models force members to pay for benefits they might not use or value.

#3

Value based tier model

The value based pricing model is familiar to members because of its similarity to consumer and B2B subscriptions. Members choose the benefit package or tier that best meets their needs and interests. 

MGI reports that 16% of associations use a tiered membership model, but the number—and conversations about it—is growing. The Aerospace Medical Association offers a five-tier membership structure to corporate members who select the level offering the “best bang for their buck.”

Members like the tiered model because of its flexibility. They pay only for what they value. As their needs and interests change, they can renew at a different level. This model also provides flexibility for associations. You can customize a stronger value proposition for different market segments.

#4

Hybrid model

In the hybrid approach, associations offer the traditional or sliding scale model with the option for members to upgrade to premium tiers offering specialty benefits.

Tiered pricing model

Three is the magic number for tiered membership pricing models, for example, a basic (discount), standard (plus), and premium tier. People perceive the middle tier as the best value, but many will pay extra for the benefits they value most.

If your research reveals a strong member desire for education, consider adding a membership tier for professional development that includes unlimited online learning programs.

Other specialized tiers options are:

  • Publications
  • Policy leaders (advocacy)
  • Startups
  • Corporate VIP partners

Subscription Model

In an appeal to younger members with limited budgets, some associations opt for a monthly or annual subscription pricing model. The Substack subscription model offers tiered pricing, each tier with additional benefits or access to resources. You can choose the free level, the middle level with a monthly fee, the middle level with a discounted annual payment, or the premium level.

Subscription based pricing has its advantages.

  • They appeal to professionals (and their employers) who aren’t interested in (or won’t pay for) traditional membership.
  • They’re easier for early-career professionals and small businesses to budget.
  • They provide recurring revenue for associations.

Your research should reveal whether a subscription pricing strategy will “cannibalize” your membership offerings. Consider whether you want to give subscribers discounts on large-ticket events like conferences. If you do, build in rules to prevent someone subscribing for a few months to get that discount.

Membership Pricing Strategy

For pricing decisions, many associations use Van Westendorp’s Price Sensitivity Meter, a data-driven pricing model that considers customers’ perceptions. It involves four questions that indirectly measure a person’s willingness to pay for a product or service.

  • At what price would you begin to think the product is too expensive to consider?
  • At what price would you begin to think the product is so inexpensive that you would question the quality?
  • At what price would you begin to think the product is getting expensive, but you might still consider it?
  • At what price would you think the product is a bargain?

With this tool, you can determine the perceived value of membership and an acceptable range of prices for it. But you must also consider other variables, such as the cost of providing membership, and do a competitor analysis.

Maximize Impexium’s Impact with Managed Services

How your AMS can help or hinder your membership pricing model project

During the research phase of a membership pricing model project, AMS data can help you understand how different member segments engage with different membership benefits.

Make sure your AMS can deliver the membership model, subscription, pricing, or payment options you’re considering. For example, does it allow you to offer one-, two-, and three-year memberships like the Regulatory Affairs Professionals Society or monthly installments like the American Society of Interior Designers?

Avoid customizing your AMS to handle a different membership model or payment plan. Customization takes you off the upgrade path and makes it more difficult to integrate your AMS with other systems.

Select an AMS that allows you to set up (configure) unlimited user and member roles in combination with the membership model you choose. This functionality allows you to get the data you need to spot patterns and trends at different membership levels. As your members and industry change, your association will have the flexibility to make changes to your membership offerings.

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