Looking at the Big Picture
Members are the heart of any association. But now more than ever, member dues aren’t enough to support the work of an association. “On average, membership dues are the single largest revenue stream for associations, but over the years the current has slowed,” writes the American Society of Association Executives (ASAE) in an article covering the release of their foundation’s Association Operating Ratio Report.
The ASAE first conducted this report in 1953. At that time, on average, 95.7% of an association’s revenue came from membership dues. The most recent edition, published in 2016, found that just 45.4% of trade association revenue flows from membership dues and professional associations came in even lower with an average of 30% of revenue from membership dues.
An Association That Runs Like a Business
The American Academy of Periodontology relies on membership dues for about 40% of their revenue. According to Bryn Reese, AAP director of professional relations, that’s a good thing. With 94% market share and retention rates hovering around 96%, the AAP relies on non-dues revenue to grow the organization.
“Our membership team has incredible expertise,” says Reese of her colleagues. “The way to keep that market share and retention rate so strong is to focus on member value.”
Member value is at the center of everything Reese does. Her role was brand new when she joined the AAP four and a half years ago. She describes herself as a liaison to the industry and its her job to look at revenue opportunities on a global scale. Reese says that she’s been impressed by the AAP and how it runs like a business. This mindset is exactly why they hired someone to oversee professional relations. Reese’s job is much more than selling an ad here and influencing an exhibit booth there—she looks at every facet of the organization and plans opportunities for generating revenue.
“I’m on everyone’s team,” Reese says of the AAP’s department structure. She listens closely to her membership department, education, meetings and everyone in between. “I look at every line item in the budget and I listen to the priorities of my colleagues,” Reese says. Then she uses these line items to look for opportunities for corporate support, even if it wasn’t previously planned. “If it’s not budgeted,” Reese adds, “it’s called upside.”
Building on Current Partners
While Reese mines her association’s budget for revenue opportunities, she also takes a closer look at the sponsors who have been supporting the AAP all along. Because Reese’s position is meant to look at the bigger picture, and this type of work is completely in her wheelhouse, she was able to strengthen relationships with current partners.
For instance, an insurance company had been supporting the AAP as a royalty partner and reception sponsor for more than 15 years. Since their annual commitment was steady, they’d been asked to renew each year without much more to the conversation. When Reese looked at the numbers, this partner had given more than $1.8 million to the organization over their years of support. She immediately set out to acknowledge them for their dedication to the profession and she started granting them top-level perks, which the AAP calls “signature diamond” level. In addition to this recognition, Reese sat down with them and asked them about their goals. “We talked about their long-term vision for being associated with the AAP,” Reese said. Now, they’ve added another sponsorship opportunity to their annual commitment and they’re more than happy to do so. While the additional revenue isn’t enormous, it signifies steady growth, which is something Reese champions. She stresses that associations need to play the long game when building revenue streams and plan ahead for steady gains for years to come.
While the successful relationship-building is a nod to Reese’s work history, including generating revenue for organizations like The Girl Scouts of America and Easter Seals, Reese credits the leadership at AAP for creating her position. “If you don’t have that designated person, you’re not thinking about it,” Reese says. “It” being revenue opportunities at every turn.
Getting Creative with your Affinity Program
Another area Reese helped revamp at the AAP was the group’s affinity program. Previously, the program was focused on practice management resources. Reese describes it as providing good value to members, but no one had looked at what members might need and want in areas unrelated to practice management.
In 2018, AAP rebranded its affinity program, naming it “Perio Perks.” Working closely with the membership staff, Reese and the team segmented their membership and tried to look at what might interest each group. From retired members to members with young families, they found that periodontists prioritized travel. So, they introduced a hotel booking affinity partner in their “lifestyle” offerings. Other categories include finance and insurance, practice management, practice marketing and professional development.
During the planning stage, the membership team created a framework for the program and populated each category with three potential partners. She then interviewed all the companies on the list to see if they were even open to affinity programs. The companies that made the cut went to a membership oversight committee which gave feedback and ultimately approved the plan.
One area that was important to the AAP was to partner with companies that would truly add value to their members. They wanted to provide the best possible discounts to their members.
“Yes, we want to make money,” Reese says, “but most importantly we want to offer value to our members.”
Furthermore, Reese met with staff at the American Dental Association (ADA) to mitigate overlap in their offerings. She acknowledged that most AAP members are also ADA members, so they didn’t want to compete with an association that also supports AAP members.
Find the Sponsorship Dollars
“There are multiple pots of money within a company: royalty, educational partnerships, sponsorship,” Reese explains. She goes on to say that educational grants often come from a separate part of a company’s budget, and sponsorships are about building brand awareness. This gives associations the opportunity to move partners between these different areas and tap into the same relationship for various opportunities.
Like many groups, the AAP has a menu of options to offer annual meeting sponsors. But Reese has structured sponsorship packages to look beyond the meeting menu and some even run for multiple years. This long-term look at a sponsor’s goals has helped her build a more successful sponsorship program for the organization.
Your organization may be larger or smaller than the AAP, but there are still plenty of tips you can take away from Reese’s years of experience in the field. Here are a few quick bites to consider for your non-dues revenue strategy:
- View your sponsorships as more than transactional. Rather than focus on selling the lanyard sponsorship or keycard logo, look at a long-term approach to building relationships with your sponsors. The extra time you invest in these conversations could pay off tenfold down the road.
- Look to your current partners for more revenue. Even if you increase a partner’s commitment by $5,000, year-over-year, that’s growth your organization can count on. New relationships are great, but it’s just as important to have those conversations with your current supporters.
- Read press releases. Reese reads press releases on the companies they partner with to better understand their businesses. Go above and beyond to get to know your partners and especially what motivates them.
- Consider multi-year partnerships. According to Reese, there’s no clock on non-dues revenue. Ask if a company is willing to commit to 24 months instead of 12. This can save you the worry of renewing a partner’s agreement and also saves you time preparing the paperwork.
- Stay organized and be transparent. Reese keeps a master workbook that details all the business she sells and she shares that information with her colleagues. She also keeps extensive worksheets that detail the fulfillment process for each opportunity so that her team can keep up.
- Align with your foundation. Reese didn’t want to be in direct competition with the AAP’s foundation, so they created the Combined Investment Partnership Program. This program allows a partner to give to both the AAP and their foundation and splits the investment. This gives partners the option of investing in the profession as a whole. It has also led to conversations with new partners who had previously only been engaged with the foundation.
Under Reese’s direction, the AAP’s non-dues revenue program is seeing steady and healthy gains. When asked what had changed since she started, she replied with a piece of advice for any association. “The revenue structure is the same, but how we view it has changed.”