How to Get the Price Right for Your Association
“Come on down!” Everyone knows that show: The Price is Right. Contestants try to guess how much something really costs, and whoever gets the closest wins fabulous prizes. That’s it. That’s the whole game. We’ve been watching the same thing for fifty years now. Why is that? Because we relate to it. Prices matter but they are hard to figure out. If you get them right, you could win big.
Your association pricing probably feels like guesswork, too. How do you price your offerings? Some things may have always just been priced that way. You may honestly not know who decided or why. If you are like most, you used your best judgment and have not thought very hard about it since.
If you get it right, you get a prize. The secret is there is more to price than money. Associations do not have a bottom line. They have a “Triple Bottom Line”: Money, Member Value, and Mission.
Let’s look at each one of them:
Monetary value is how much money they make for you. That is, your price minus your cost to produce it. Your first question should be: does our association pricing charge enough for our offerings? Is there room to charge more? Look at your competitors and other organizations like you. What are they charging? Ask your members in your member research how much they are willing to pay. You may be surprised to learn that members often expect to pay more than they do.
The next question is how much you are spending to produce your offerings. Do you really know? If you are like a lot of associations, not really. You might know what it costs to produce an event. But what is the real cost of training, of content, or even membership? It is not always easy to figure that out, but it is important that you do. Most organizations that do an honest cost analysis realize they are losing money on things they did not think they were.
As a non-profit, money does not matter most. Your members do. You want all of your programs and offerings to make membership more valuable. Member value is not subjective. You can measure it. One excellent way to do that is to look at your renewals.
Members who renew engage with some of your offerings much more than others. And some of your offerings have no impact on renewal at all. Looking hard at the correlation with renewal will give you a good sense of what members find valuable.
There are probably some things you offer not to serve your members, but rather to serve your mission. For example, if public awareness is part of your mission, you probably give most of your content away for free. You can measure mission impact objectively too, by looking at alignment with your strategy, ability to effect change, and other factors. Suffice it to say that some things are literally mission-critical, and you want to value them that way.
The goal for your association pricing is to price the things you do to maximize at least one of the three bottom lines. It is okay if a product loses money, as long as you know that and choose to do it on purpose. For example, a database with huge member value but that your members could not otherwise afford. It is not okay to lose money by accident or on things that serve neither your members nor your mission.
What is the right association pricing for you? Take a look at your triple bottom line and come on down!