There have been several posts recently comparing associations to newspapers. Maddie Grant reprinted a listserve comment and got a lot of comments on her post and at other blogs. The general gist of the original post is that newspapers are an industry in gut-wrenching turmoil, and so are associations. Somehow the whole thing turned into a discussion of “micropricing” — continued here on the Acronym blog.
First of all — not all associations are in gut-wrenching turmoil.
Second of all — I think micropricing as it was defined in the original listserve comment and most of the subsequent posts/comments (taking stuff you already do and give away, and start charging for it) is not necessarily a good strategy for an association. Most associations have markets too small to make such a strategy worth the effort.
Far, far better to create valuable things (products, programs, services) and charge a hell of a lot for them. Your most valuable asset is your tight market and your knowledge of what it needs; you should not be “micro” pricing anything.
Third of all — there is a real lesson I think associations should derive from newspapers.
Newspapers are failing because they think they are in the newspaper business. They built big infrastructure (printing presses and global personnel) and are being drowned by it. They are desperately trying to prop up their core business through things like, yes, micropricing; witness the NYT and others announcing that they are implementing paywalls.
Will this save newspapers? Does anyone really think it will?
I’ve talked ad nauseam, in too many posts to link to, that associations should never fall into the trap of thinking that they are in the business of doing whatever it is they happen to do now — but we do it anyway. We publish a magazine, so we build up an infrastructure to publish a magazine; we put on a tradeshow, so we build up an infrastructure to put on trade shows; we are a “community” so we build up an infrastructure to support and grow community; we offer certification, so we build up an infrastructure to certify people; etc., etc.
If you want to continually succeed, you should start assuming that everything you are doing right now is going to go away. Instead associations create infrastructure to support whatever it is they’re doing right now, infrastructure that must be fed and sustained, and then they complain about “silos” and watch economic dips and technological changes blow holes in their budgets while they try to cover those holes with Band-Aids and hope.
No, micropricing what you do is not the right lesson to learn from newspapers.
The lesson that newspapers have to teach us is happening right here in the association mecca of Washington, DC. It goes like this:
The poor Washington Post can’t catch a break. As a “national newspaper” it’s failed; it just can’t compete with the NYT or WSJ. As a source of exclusive political coverage, it’s been permanently scooped by the more nimble Politico, which is also getting ready to introduce a sister site for local news coverage. The Post has been the subject of scrutiny, criticism and derision for a while now.
One of the jokes you often hear about the Post is, “The Washington Post is a testing company that happens to own a newspaper.”
But it’s not a joke; it’s true. The Post’s acquisition of Kaplan way back in the ’80s turned out to be the smartest thing it ever did. Today Kaplan is the Post’s fastest growing division and its largest producer of revenue. In fact, more than half of the Post Company’s revenue comes from Kaplan.
So while the Washington Post newspaper fights against lagging market share and declining revenues, its Kaplan arm is going strong.
This doesn’t sound like a joke to me.
I’m not saying it’s going to happen, but if the Washington Post decided to stop publishing media and embrace a future as a testing and educational services company … would you consider it to be a failure?
Because I wouldn’t.
If you would, then maybe you have a similar difficulty divorcing your association from the things that it does. And that mindset is what’s leading some associations into gut-wrenching turmoil.
To sum up:
Newspapers are not in the newspaper business, and neither are you.
You are also not in the association business, because frankly, there isn’t any such thing.
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I’m on much firmer footing talking about the newspaper world than the association world, but I feel like I can comfortably say a few things from my perspective.
It’s true that the changes effecting newspapers and associations are similiar—in both cases the explosion of free information on the internet has made it easier for people to make end-runs around organizations that were once the sole repositories of relevant material. But the similarities pretty much stop there. I mean, newspaper owners would sell firstborns to have what many (most?) associations have—distinct, passionate, and identifiable audiences whose concerns and interests are largely knowable. Newspapers don’t have that close understanding—even if they emphasize reporting nobody else has, there’s no guarantee that people will care about it, because the readership’s interests are so broad and diffuse. (Consider the Post’s ambitious but ultimately failed “Loudoun Extra” online effort.) So to a certain extent newspapers either have to be passive about revenue (”We need advertising to pick up”) or it needs to coax its readers into a brand-new mindset that has a bit of passive-aggressiveness built into it. (”If you like our content so damn much, maybe you could kick a few pennies our way every so often?”)
But the association model has enough revenue streams in it that (most) don’t have to wring their hands about revenue (though I’m sure everybody hopes sponsorships pick up), and association content and services are niche-focused enough that there needn’t be a timidity about charging for it—unlike the New York Times, you can correctly argue that you’re the only source for important and relevant information and experiences that improve your success in your chosen field.
I understand that every organization has to do a bit of jiujitsu to change the culture of members—that they need to be coaxed to some degree to understand the value of what you provide. Giving away some of your work for free plays a very important role in that understanding. But sometimes things are valuable because they have a substantive dollar value to them—or as you put it, you charge “a hell of a lot” for them. Every association will have to figure out what costs its members can bear. But newspapers have to go from free to some kind of paid model, which is a different cultural shift than the one assocations are considering. Nickel-and-diming members runs the risk of making people think you’ve now diminished yourself into a purveyor of five-and-dime products.
Eeep! I meant to say that “the association model has enough revenue streams in it that (most) don’t have to wring their hands about *advertising* revenue.”
Ha – Kevin I knew you wouldn’t disappoint. I was waiting for someone to say “hold on a minute” and push back against the comparison. I personally have not weighed in on this debate yet, though in my post I did find some great other blog posts that seemed to reflect some of the same ideas as Bruce’s. I’m still percolating it all. I do think that associations can greatly benefit from “thinking outside the association box” (cliched as that phrase is) and looking to different kinds of businesses/companies/industries to find new ways of doing things better. I also think that the whole concept of the long tail (the “micro”) is crucial to the future of associations, which are crazily niche by definition – but I’m not convinced that selling lots of things for $0.99 is the answer. I think the trend towards “unbundling” is more nuanced than that (or should be) and maybe more to do with “individualizing” the member experience somehow…
@Mark – Excellent comment, thanks for leaving it. Great point that one of the primary differences between newspapers and assns is that newspapers don’t really have an audience — what I mean is, the audience is so broad and non-specific that it may as well as not be an audience. It’s “whoever lives in this city.”
Similarly …
@Maddie: The thing about the “long tail” is that it’s only a “long tail” if it’s actually, well, a “long tail” attached to something else. Associations are “crazily niche” as you say; our audience might be described as part of a “long tail” for something else — say, you represent widget manufacturers, which in Amazon’s universe is a tiny segment of a longer tail of sales. But for the widget association, their audience is not a tiny segment, it’s the entire universe.
Personally, I *love* niche; I even love creating and exploiting even further niches in the little universe I work in. But the notion expressed in some of these posts, that assns are somehow missing the boat by not taking what they’re currently doing and “micropricing” it, is ludicrous to me. It’s missing the whole point of the niche! Which is that niches enable you to dive down deep, create valuable things that Amazon (for example) can’t offer, and charge what those things are really worth, which ain’t “micro.”
I suppose it’s my turn to respond here, as I think I’m partly responsible (at fault?) for getting this micropricing conversation going.
I appreciate Mark’s response here, too, as makes some great points about the newspaper equation vs. that of associations. To be completely honest, I’m pretty skeptical about micropricing or pay walls working for newspapers, at least as designed right now.
And I don’t disagree about charging premium prices for highly valuable association products – an in-depth research report, for example. I think that model works if you want to rely less on the membership model, and you’d need highly priced products to generate sustainable revenue in that case, anyway.
But micropricing, for associations at least, wouldn’t be a replacement for any current model. It would be supplemental. It’d be a way to add some extra revenue to your coffers, reach out to some of your long tail, and possibly bring them closer to your core niche. I only see it working for certain types of products, mainly in the “unbundling” sense that Maddie mentions, the ones that you otherwise reserve, as a whole, for members only.
Let it be said that I’m a journalist by training, not a business expert, so there’s probably a lot I’m missing in my thoughts about this, and I appreciate the challenge, Kevin. It’s helped me toss the idea around in my mind some more. I still think micropricing is worth experimenting with in some cases, though.
I heard a quote years ago (sorry can’t remember who said it!) that an association is not a single business; it is a collection of small businesses operating under one roof.
The unique spin associations put on it is having a consensus-based governance model slapped on top of a small conglomerate with a highly focused market. That brings lots of challenges but also offers tremendous opportunity, as you rightly point out.
Great post and comments! I’ve been watching various discussions of what’s happening in the newspaper business for quite awhile.
I cut my professional writing teeth on the local weekly back (waaayyyyy back!) in high school. The local paper was just that: local. It left national reporting to the big-city papers and regional reporting to the mid-size market papers. Now even the local papers think they need to cover national events.
But every newspaper is local, isn’t it? Even the big-city rags?
Now that we’re travelling full-time, moving from state to state and region to region, I’ve discovered what I believe to be missing from newspapers, and why they likely fail: they forget they’re local.
I want to know what’s going on — beforehand, so I can plan, and afterwards, so I can see if I missed something. I want to know about the upcoming festival, the latest on the local political scene. I want to know about the area I’m in. So I buy the local newspaper. And so far, of the places we’ve been, I’ve found more helpful information there than I ever could on the town’s Web site or via the CVB site or other online feeds.
Where newspapers go wrong is when they shift their focus from what they do best — which is focus on their immediate territory (whether that territory is the city of Temecula, CA, or inside the beltway) — and start to spend newspaper space on stuff others do better.
And that’s the lesson I think associations need to take from what’s happening with newspapers: know your territory. Cover it better than anybody else. Think of the long-term residents who want to see their name in the paper, and give new residents and visitors the information they want.
And as for micro-pricing? Absolutely a good idea. Just as I can buy one day’s newspaper without subscribing for a full year, I should be able to just purchase some of an association’s offerings. I’ve become a virtual member for every association in which I’m a member. Some of these memberships will fall away as I’m finding the dues just to receive their magazines (about the only benefit a remote member gets) just isn’t worth it. Offer me a special rate for that magazine alone and I’ll subscribe. But don’t force me into a membership I don’t want and won’t get anything more out of.
Micro-pricing isn’t about the pricing — it’s about the flexibility someone gets from it. It’s about some revenue versus zero revenue. It’s about keeping people connected in some way to your organization, rather than letting them disconnect and disappear.
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