August 8, 2008

How to Grow in a (Shrinking?) Economy

Posted by Kevin | Print This Article

I’ll leave it up to the so-called “experts” on what the economy is really doing at the macro level, but it’s only stating the obvious to point out that the last year has been a hard one for certain industries. So the question is, How can an association achieve revenue growth in a year when its members are facing economic challenges?

With the recent closing of our most recent fiscal year, I finally feel comfortable addressing this question with a few tips and thoughts based on our own experience doing so.

Create new products for your core market that meet a real need. Our core products are the standards and technical manuals that lay out how our industry is supposed to do its work. One of the things we hear most often from members and non-members is that the standards are very difficult to understand and require outside training. In late 2007 I worked with an industry trainer and launched a new series of computer-based training sessions that take the concepts and explain them in plain English in bite-sized, self-directed segments. The first three packages in this series produced a brand new six-figure revenue stream. My tips:

Make sure you are listening to members and exploit what they are telling you about your products, and about potential new products.

Look at your bestselling products and create ancillary products around them. For example, if you sell books, create training programs that explain them or demonstrate how to use them, or create audio versions if they lend themselves to that sort of treatment. The key is to look at what’s working and build on it.

Now is not the time to cut back on marketing. In addition to our usual product catalog and email marketing, we upped the ante with new monthly product mailings and an even more aggressive but targeted series of promotional emails. We experimented with landing pages, fax broadcasts, telemarketing, and even Google advertising. By being smart about how we spent our money, we were able to do “more” marketing (with significantly better results) at less expense. My tips:

It’s very possible to reduce printing and mailing expenses significantly while still producing high quality product through such things as paper choice, printing technologies, layout and “fold” (for example, take advantage of the new postal regulations and avoid flats).

You must have a way to easily segment and target emails. If you send emails to everyone, or even if you send emails to certain broad channels (”newsletters” or “product specials”), then you are not getting the most out of email marketing. You must have a way to send emails, for example, to everyone who opted into receiving product specials, *AND* who also purchased a particular product, registered for an event, etc. (and just as importantly, who *DIDN’T* purchase, register, etc.)

Do not rely on one marketing channel! Hit your markets in multiple ways.

Repeat, repeat, repeat! I think it’s a waste of time, for example, to mail a promotional flyer once. It’s more effective if you mail it twice, or three times, to the same audience. I also have decided it’s a waste of time to send “building” campaigns (for example, a series of postcards that “build” on a particular theme), unless the campaign is REALLY clever. Send the same thing, repeated.

Retention is always important, but especially so when an industry is facing economic turmoil. Many associations think the key to improving retention is to remind members of the value that membership offers. However, we have found that the key to improving retention is to remind members that they owe money. With members expiring throughout the year, we begin our dues renewal process (both paper and email) five months out from expiration. Our retention rate held at around 90% this year. My tips:

The number one reason given for not renewing is “I didn’t realize I had expired.” Take away this excuse! Don’t be afraid to be persistent, almost annoying. Do not wait until the last minute to begin the renewal invoicing process.

Reach deeper into your core marketplace to find new audiences. I’ve talked ad nauseam about my belief that successful associations focus their efforts on expanding products and services for their core market, rather than take what they’re already doing and seek new markets. Part of exploiting the core market, though, is finding new decision makers within that marketplace. For example, we are launching a little two-day conference this October aimed specifically at a common lower-level management position among our members (as opposed to the owner or top-level position who is our usual audience). By early July we’d already surpassed our budgeted attendance expectations for this new conference, and added an overflow hotel; now we expect the event to completely sell out. My tips:

Look at your membership base (particularly if you are a trade association) and find new audiences within that base who may be interested in new educational or product offerings. First, you have to know what (and who) they are. This means being very familiar with typical member operations and being aggressive about collecting names and email addresses. (For example, our member “primary contacts” can login through our website at any time and add other employees to their account, giving us access to these valuable contacts and their job titles.)

Add niche events and mini-conferences to your schedule. Some associations try to bring in new people from their market by constantly adding new “tracks” to their annual meeting or coming up with alternate marketing approaches. I’ve found this to have mixed results. People in specific operational or professional segments will be drawn more to a an event that is specifically for them than they will by a new workshop series at a bigger event. And the niche event can bring in new sponsorship and exhibitor dollars at a higher price since the audience is so targeted.

Don’t stop experimenting, and take risks. Not everything will work; for example, we tried a regional one-day marketing seminar this year that was not successful enough to try again. This doesn’t stop us from innovating and experimenting. This fall we will be launching some new subscription-based online applications quite different from anything we’ve tried before. And we are building on the series of CDs mentioned above, with four new packages slated to be released in September and October. Another niche event will be launched next spring. My tips:

Stop thinking that you are in the business of doing whatever it is you happen to do now. Move in new directions.

Embrace a “guerilla” approach to media and technology for producing these new products and programs. None of the things we did this year that brought in high revenue cost us very much at all.

As you can tell by now, I believe strongly in product, product, product. Products are key to growing an association and making it possible for it to continually enhance services and advocacy for the industry it represents, no matter what the economy is doing (and none of the things we did this year were done specifically in response to the economy).

If the only things you sell are membership and meetings, then you’ve focused your model around two things that are most likely to be scrutinized, and possibly abandoned, by companies and people whose confidence in the economy is shaken.

Comments

Leave a comment

Name (required)

E-mail (required)

URI

Your Comments

Notify me of followup comments via e-mail